The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1920-09-25
BETTERLEASESFOR
PROPERTY PLANNED
ReaItor Seeks to Relieve Misun-
derstandings Between Owners
and Tenants of Property.

Much of the dissatisfaction with
rental rates arises from an ignor-
anee on the part of the tenant as to
the real cost OF the thing he Is buy
ing" says Alfred +. Potts. sof In
djanapolis, in the National Real Es-
tate Journal "The popular belief is
that a landlord realizes fabulous
profits on his investment and that
a tenants duty is to get back just
as much of the ill-gotten gain as
possible in the way of repairs. He
has no interest in cooperating with
the landlord in keeping the property
in good condition or saving expense =
any direction. II has always seemed
to me there must be a method OF ar
irving at basis for calculating
rental rates at once fair to the land
lord and acceptable to the tenant.
SEVEN PER CENT RETURN.
after some study / worked out
new form OF lease, based on the
theory OF taking the tenant into my
giving him the facts as to
the cost OF the property or its selling
value and the expense of it's mainte-
nance and saying to him in enect: i
am going to sell you this property at
an agreed price. You don't need TO
use your own money or borrow. III
furnish all the capital. All l ask Is
that you pay me or, as the case may
be, Z per cent on the capital l furnlsh
you. Isn't that fair" And, OF course
he has to admit 1t.
"Well, as I've turned the property
over to you, you will have to pay
the taxes and insurance and keep up
the repairs the same as any other
owner.
This he sees and assents to.
The buildings on the property Will
gradually depreciate so that at the
end of a certain period, thirty-three
years, let us say, they will be prac-
tically so run down or out OF date
as to be worthless and will require
So you must set aside
a depreciation fund to take care OF
this loss. While you pay that sum
to me to cover depreciation, it is not
profit in my hands. 1 cannot spend
it The payments must be allowed
to accumulate to replace the present
when they are out of date.
So you see all that 1 get out of this
property is the or per cent. on
the cost or value of the investment
TENANT PAYS FOR REPAIRS.
"This frank and simple explanation
Of the economics of the situation has
always proved satisfactory in the
many cases where 1 have employed
this basis OF calculation or form of
lease. The unknown quantity is the
amount to be charged to cover re-
pairs. Formerly you have found
tenant anxious to get all he could
out of you in the way OF repairs.
Now he realizes that he Is paying for
the repairs himself just as he would
II he owned the property and he be-
gins at once to see how little he
can get along with, not how much
he can exact.
an fact, the situation is almost
a musingly reversed. You find that
you have to insist on keeping the
property in good repair and that II
cannot be done for less than a certain
sum which must be included in the
payment to you so that you may pre-
serve the property. To his sugges.
ton that he will make his own re-
pairs. look after tho plumbing, paper
the walls, polish the floors. repaint or
revarnish. you must turn a polite but
deaf ear, as he might do so little that
the house would get shabby and un-
desirable.
CONVINCING THE RENTER.
CAS- you agree to expend the re-
pair fund portion OF the rental on re-
pairs largely for the comfort and
pleasure of the tenant, he realizes
that you have no motive in making
the repair fund any larger than
necessary.
Certain work, such as a new roof,
the repainting OF the exterior OF the
house, etc, obviously to some extent
tends TO lonethen the life OF the
building. A clause IL inserted that
such expenditure shall be charged
{, the Srprcriation account aal Hf