From Conflict Management to Negotiation

My basement unit tenant and I have agreed to a new lease. The terms - $650 plus 40% utilities, 12 month lease, plus the conditions I mentioned in my previous post. Next I'll have to write up the new lease and get all the required signatures (his and mine). The new terms means my net cash flow from this propery will decrease a little.

However, there are a couple of things I can do to compensate for that. The way my mortgage was set up when I purchased the property, the bank is withdrawing an amount for property taxes along with my regular mortgage payments, and supposedly making my property tax payments for me. I figure they're taking out about $50 more per month than what my property tax payments should be. One of my tasks then will be to tell the bank I will make the property tax payments myself.

Another thing I can do to control my costs is to cancel the water softener contract. I originally put this in place several months ago when I had a hot water discolouration problem. At the time I had believed this would solve the problem. Well in retrospect, it didn't solve the problem. Replacing the water tank solved the problem (See Out of the hot water). Therefore, although I'm sure having a water softener can be a good thing, I do not strictly need one. Because I had signed up for a two year rental contract for the softener, I got a deal where I get the first six months for $6/month. The six month period has not ended yet, so I'm not paying the full rental price yet. I'll need to find out whether there will be any cancellation penalties for early cancellation. Before I cancel it, I'll give my main-level tenant the option of taking over the payments if she wants, since she could potentially benefit from it.

This is one of the advantages of investing in real estate, as opposed to say, stocks, or mutual funds - flexibility. Even though my rental income is down, I can make certain business decisions that will have a direct impact on my investment performance.