Net Lease, not to be misunderstood with a Triple Net Lease. It's important to review this with landlord. Here are the details...
With the increase of property taxes by 30% and 40% we wanted to figure a better way then increasing rents to the point of no return. A net lease reduces the chances of increasing rents due to inflation and other increasing costs, it lowers the NOI. The most important factor in any rental property is your NOI or Net Operating Income. The lower the NOI the greater the investment and happier the tenant, it reduces rental increases, not completely, there still is a chance of increases due to county assessments, but not severe. So instead of increasing rents to the point of no return, we've decided to do a Net Lease.
There are minor expences that come along that are usually tied to tenant neglect. For example, if you don't change your furnace filter often, it will be followed with a call that the heater stopped working. Regarless of a regular lease or a net lease the filter has to be changed by tenant, at their cost. Most won't, but this is an example. Tenant to provide high quality filter, not a cheap useless filter.
With the Net Lease you would be responsible for, not all but some of the expences. Tenant CAN NOT take it upon themselves to do ANY of the work. A licensed vendor has to be used.
So, the following costs will be paid by the tenant, and you will need to pay for the cost at the time of there vist. If the bill comes to us, there will be an added administrative fee of $49.00, avoid the $49.00 and pay vendor / service person at time of service, the service company will need to be paid up front, time of service call.
Garbage disposals: All related costs except for replacement of disposal. If disposal is damaged from neglect or failure in putting un-wanted things in disposal, tenant pays.
Drainlines within the square footage of the living space. 99% of the time its tenant neglect, plugged lines come as a result tenant neglect.
You can call any licensed plumber, but it's important to know, drain line plumbers have the tools other plumbers don't have. $125 and up
Heating filters every 3 months and vacuming and dusting utility room. Some of the charges tenant responsable for are as follows:
- Furnace not reaching temperature due to dirty filter: Est cost to tenant $115.00 to $135.00
- Clean plugged condensate trap, clean flame sensor, cleaned burners, change dirty filter: Est cost to tenant $185.00 to $210.00.
- Cleaned flame sensor and burners also inducer motor failure from dirty filter, sucking air through air intake on the inducer motor stress failure $383.75 to 425.00 and up
- Intermitant operation, clean flame sensor, clean burners, clean furnace, clean filter. $118.75 to $185.75
- Pressure switch code blockage. $148.75 to $185.75.
- Tenants failure to not put door back in place so causing adjustment on switch, $125 and up.
- Anything having to do with cleaning flame sensor, cleaning burners, cleaning furnace, changing filter, cleaning burners, checking draining tubes etc. anywhere from $100.00 and up.
The furnance costs above can be next to zero if tenant keeps utility room clean and changes out a high quality filter every 3 months. The costs shown above are from billings we have received from heating and air companies. The heating and air companies have stated the charges never would have happened if tenants had maintained the heaters. We noticed this with those who keep furnance rooms clean, we never had service calls. Our non-net-lease requires you, in sub paragraph 8 of the lease to pay for tenant neglect. With a net lease you're required to pay the heating and air company upfront, the bill goes directly to the tenant, not the landlord, you pay at the time of service, with your credit card.
Dishwasher
Dishwasher getting plugged. Please type your model number, ser # and make to YouTube on cleaning filters. It will show you how to clean a filter. If changing filter requires removing screws and housing covers, tenant will not have to pay. Our non-net-lease requires you, in sub paragraph 8 of the lease to pay for tenant neglect. With a net lease you're required to to pay the heating and air company, plumbers, and other service calls upfront, the bill goes directly to the tenant, not the landlord, you pay at the time of service, with your credit card.
Property Taxes
A percentage of property taxes at a prorated rate during your stay. Every October, tenant to pay $200.00 towards property taxes on homes, townhomes and condo's, and $100.00 on 2-plex, 3-plex, 4-plex and up.
If you Est. this, its between $8.33 to $16.67 per month, but the whole amount is due on October first, not on a monthly basis.
What this does
It allows you to have a lower rental rate by taking care of the place you live in.
You'll think twice before pouring bacon grease and other fats down the sink. You'll think twice before flushing hygiene products down the toilet.
You'll think twice before putting coffee grounds which creat a sludgy mess, potato peels which creates viscous liquid with large peels causing trouble, fibrous vegetables like celery, rhubarb, pumpkin innards, chard, kale, asparagus, bar-code stickers on peels. Starchy foods like pasta, rice, oats, and beans expand with water. Sarchy foods may coat the blades causing them to malfunction.
You'll think twice before placing onion skins. You'll think twice before pouring paint down the garbage disposal drain. You'll think twice before placing nuts, pits, seeds, shellfish and bones that turn into a paste on the blades.
You'll think twice before placing napkins, paper towels, wrappers, foil, silverware, wedding rings and broken glass down the disposal.
Over the past 40 years of property management, the above items were found when a plumber service call came in. Again, with a net lease you're required to to pay the heating and air company, the plumber, the dishwasher repair person upfront, the bill goes directly to the tenant, not the landlord, you pay at the time of service.