If your router supports personal VPN service at the router level, then this would be the best way to implement a personal VPN, as it allows you to encrypt all traffic entering and leaving your network without the hassle of setting up VPN on your computers. Using the personal VPN service at the router level also takes the encryption process burden off of your client PCs and other devices. If you want to use a personal VPN at the router level, check to see if your router is VPN-capable. Buffalo Technologies has several routers with this capability, as do other router manufacturers.
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If you are using good passwords and using WPA/WPA2 and he still gets in then you likely have WPS enabled. WPS was designed for lazy people who did not want to key in passcodes but the WPS key number is easily cracked and once you have it it can not be changed so it can be used to obtain even the strongest keys.
Lately this feature is disabled by default in routers but you should be sure it is turned off.The WPA/WPA2 keys are almost impossible to crack if you use even one that has numbers and letters and upper and lower case. You put in a special symbol and even a super computer likely can not crack the key itself. I've heard some routers firmware, even with WPS disabled, will still allow the number to be used to gain access.Since the neighbor seems to already have the number it's pretty much useless to try keeping the neighbor out.I believe many wifi manufacturers have updates to their firmware to modify or remove the WPS 'feature'.
So you may check for a firmware update.I use 'aftermarket' firmware that doesn't have WPS so even if someone had cracked my routers in the past their having the 'numbers' wouldn't matter.Updating the firmware is the easy answer, isn't that difficult to do but will brick the router if not done correctly.So there is that.Another thing about security is turning down the routers power.I have a router in the basement LANed 200 feet to the garage, both routers set to low power.