ghostguy123
Footballguy
Isn't going that route opening you up for some sort of potential lawsuit due to a malfunction? Or if something goes wrong is he going to warranty parts and labor?
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*** Official Landlord Thread *** (1 Viewer)
- Thread starter Wooderson
- Start date
Hey folks - have spent the last few weeks going through this thread as I'm thinking of jumping in. I consolidated a lot of the key points (well at least what I think are the key points) into categories/bullets...thought it would be helpful for the new guys who jump in. If you're curious, should be able to copy/paste the text into google to find the original post. @Wooderson - in case you wanted to add to the first post of the thread
Finding a Property
· 650-699 Ask for, 2 months security but be open to negotiate
· 600-649 Require 2 months security
· 599- Denied"
Option to Purchase
Maintenance
o 24-hour emergency maintenance service
o Rent collection
o Rent court services
o Eviction services
o Lead paint compliant
o Professional and ethical service
o Monthly and annual financial statements
o Quarterly inspections- interior and exterior
o Move in/ Move out electronic reports
o Electronic financial statements- monthly / annual
o Rental registration
Tenants
· People that ask if I will work with them on the deposit (I only ask for 1st months rent and deposit)
· People that have been at their current place for less than 1 yr
· Multiple families that want to move into a 3 bedroom house together
· People employed by temp agencies
· Not putting their current LL on the app (or putting a false LL/address match)
· Facebook photos portraying behavior I dont want happening at my place
· Facebook posts that are inconsistent with what they put on their app (no pets vs pics/posts about their 4 pit bulls)
· People that show up drunk/high for showings
· People that blame their LL for all their problems (I know who the bad LLs are here).
Finding a Property
- · I use to call the listing agent and talk to them. If they had a clue about investing, I'd have them set up email search for me. I can find the right agent in any market for you in 20 minutes if you are interested.
- · I've always bought things in very good repair. Just my style. Others I'm sure can chime in here.
- · I read about 10 books eleven years ago. I forget which. I just picked out the parts that applies to my style best and went for it. The one thing I always remembered when I started to look for my larger project..... "If the fences are in good repair, the rest of the place is usually in good repair because that one of the last items to repair."
- · Don't plan on making anything on it unless you can bank 20% per month on top of the mortgage payment.
- · My opinion is that if you can't run positive cash flow on a 15yr mtg, it's really hard to turn a profit.
- · When calculating your cash flow, don't forget about the money that is going to your principal loan amount. Probably a couple hundred bucks a month
- · 8-10% return is a good number.
- · 10% or more return
- · 10% after everything! Depreciation Expense eliminates most of my expenses
- · You shouldn't be paying utilities and renters won't balk at that. I recently put a clause in my leases that the tenants are responsible for any repairs under $100 and a $100 deductible for anything else higher. You'd be surprised how much this cuts down on repairs and damage.
- · Get as much of a security deposit as possible. You WILL need it. My neighbor has a trick that he uses to get rent on time. He advertises the place for $100 more than he wants, but he tells them they will get a $100 discount each month that the rent is in by the 1st. He gets all of his tenants to pay on time with this system.
- · First and last plus security deposit. And when the rent doesn't show up you start the eviction process immediately. Also make sure you have a thorough checklist done on move in to protect both you and the tenant. I got screwed in this when I bought an occupied property. They totally trashed it and I got hosed for the bill because I had no evidence that their down destroyed the yard and all screens.
- · Deposits based upon credit score:
· 650-699 Ask for, 2 months security but be open to negotiate
· 600-649 Require 2 months security
· 599- Denied"
- · Rent is due on or before the 1st, a $50 late fee will be charged if balance is not paid by the 5th, and a 3 day notice to vacate will be given if not received by the 10th.
- · 1st, last, 2 month security - Local custom is usually going to dictate what is appropriate. Get a feel for what the market is doing and go from there.
- · Late fees - Your state may set a max on that. I've see a lease listing an illegal late charge amount invalidate the lease. Don't pull this number out of your rear end.
- · Security deposit amount - State law may dictate what's legal based on length of lease. I add $50 to all my security despot amounts to differiate that it's not last month's rent."
- · You get that extension in writing. If so, rent clock stays on until you sell or re-lease.
- · That's what their tenant insurance is for. Hopefully your lease outlines this.
Option to Purchase
- · Not sure about your state, but for an option to be valid here it has to be recorded. If you are going to do an option, they should be paying you for the right to that option. I'd want something along the lines of 2%. If they don't have any skin in the game, they get the benefit of the appreciation or just can walk if the market tanks. How would you feel if they exercised the option that cost them nothing and sold the home immediately to someone else for 10% more than the option price?
- · Personally if it were me, I'd call a property mgmt company and tell the you have a tenant in hand and want to manage the property. Offer them some cash to screen the tenant and write the lease.
- · Depending on how much you make personally you may or may not be able to deduct any losses
- · Put it in an LLC for liability purposes....You can quit claim the title into the LLC's name for reasonable protection against a law suite
- · In my limited research, I ended up just going with an umbrella policy that covers my rentals (once you get more than 4 it gets more expensive) to cover my liability risk.
- · If he goes with a single-member LLC then he doesn't have to file a separate return so there wouldn't be much added expense if he goes that route
- · If you don't put a bunch down, the depreciation plus interest expense likely means a tax loss.3. If you put a bunch down, the depreciation plus interest expense is unlikely to mean a tax loss...and if it does still result in a loss in this case, there are better investments out there.
- · http://www.investopedia.com/terms/r/rentalreal-estate-loss-allowance.asp
Maintenance
- · Plan on spending more than you ever thought was possible for maintance
- · The biggest headaches i see are the minor things, like getting calls for dumb stuff...showing the apt, dealing with tenants directly. If you have someone doing most of the brunt work your basically just financial backing.
- · "We are definitely in a tough spot as the LL. We absolutely need the money to hand over the keys, because we are handing over a $100K (give or take) property for $1500 or so. I'm sure I've lost some respectable prospects because of my pet fee (some people get downright nasty with me about it), but we dont know the responsible pet owners from the ones that treat a bedroom as the dogs bathroom until its too late. Nobody tells us up upfront they're going to let their dog #### all over the house, steal our appliances, leave us with bug infestations, or quit paying rent and attempt to live there for free. If they did, it would be easier for everyone (except the bad tenants).
- · $300 non-refundable here on most of the rentals I manage. - Pets
- · I charge $50 per pet per month
- · Having one rental sucks. Your PM company wont do jack for $65/mo and you are 2 hrs away. Do you have a hvac/plumber/painter/electrician/roofer? You will pay through the nose for these services. It will take up more of your time than you think. On top of all that you're looking to break even best case month to month. I dont think this will end wel
- · Get a good lease. Get a go to guy in each of the different service industries. Scrutinize your tenants, this will make or break it for you
- · "I'm biting the bullet and moving over to a management company after managing my own properties for close to 12 years. It's just not worth it, and with the 8% fee they charge, I'll be coming out ahead since I wasn't receiving 92% of the rent over the term of the lease at the first place I'm transferring.
- · I'll still find the tenants, but the management company does the background check and lease signing. If they found the tenants, it would cost a months rent.
- · I was too lenient with late payments and didn't do a good job of inspecting the property during the lease. They'll do quarterly walk throughs and charge late fees as soon as the due date passes.
- · I generally charge 1/2 month then 10%, but we are a full service company and don't mark up invoices, charge start up or ad fees, or have an in house maintenance staff as a profit center. Several of the 8% competitors end up getting 12%+ when it's all said and done. That 1/2 month is bargain part. Typical house gets shown 10 times. Figure an hour time traveling and showing plus gas expense. Often they no show even when you confirm an hour before. Add in qualifying, writing/signing lease, etc and the bulk of the time is up front."
- · "For 8%:
- o Full leasing services, including tenant screening and tenant credit checks
o 24-hour emergency maintenance service
o Rent collection
o Rent court services
o Eviction services
o Lead paint compliant
o Professional and ethical service
o Monthly and annual financial statements
o Quarterly inspections- interior and exterior
o Move in/ Move out electronic reports
o Electronic financial statements- monthly / annual
o Rental registration
Tenants
- · Go whatever route you like. Luckily you aren't dealing with me because you would be racking up late fees for non-payment of rent and get your credit dinged. You'd probably end up paying for that repair and then some via rent increase if you wanted to renew. One of the things we factor into rent increases is the number of calls we get for minor stuff. If someone can operate a screw driver or spray bugs, then I tend not to increase rents as the owner's balance sheet looks better.
- · choose your renters wisely
- · Have your potential tenant get a credit report. Most will comply without argument.
- · When you place an ad for the rental, you can stipulate that the tenant is responsible for all utilities. It won't shy that many away.
- · You can deduct any expenses associated with the rental property (maintenance, furnace service/repairs, etc). That will offset some of the rental income that you have to claim.
- · Don't just accept the 1st person that wants to rent it out. You can be a little picky if you are not in a rush to get it filled.
- · https://biggerpockets.mysmartmove.com/tenant-credit-check.html
- · 650-699 I try to get 1 st and last. 700+ approved. Under 650 = 31% chance of default. Has to be 1st and last. Under 600 is a no.
- · Personally I dont even look at credit scores anymore. I used to and would either end up with a 3+ month vacancy or get stuck with a bad tenant that still managed to have decent credit. I've had much more luck using job history, rental history, facebook, the auditors website, and criminal history website. I do rent much cheaper houses ($650-$800) than you though.
- · A few things that could be red flags for me:
· People that ask if I will work with them on the deposit (I only ask for 1st months rent and deposit)
· People that have been at their current place for less than 1 yr
· Multiple families that want to move into a 3 bedroom house together
· People employed by temp agencies
· Not putting their current LL on the app (or putting a false LL/address match)
· Facebook photos portraying behavior I dont want happening at my place
· Facebook posts that are inconsistent with what they put on their app (no pets vs pics/posts about their 4 pit bulls)
· People that show up drunk/high for showings
· People that blame their LL for all their problems (I know who the bad LLs are here).
- · Basically for me its more spidey senses than hard numbers. Applicants will tell you a lot if you just let them talk as you're showing them the place."
- · This is why you should ask the LL in the initial phone call what they require upfront. Its as much of an interview for you as it is for us. You can tell some tenants will be a "good match" and some will become a royal pita.
- · So I've learned credit score means something too. Some people only pay their bills when absolutely necessary.
- · I pull credit reports but don't use the scores. A bad score doesn't mean a bad tenant. Bankruptcy and short sales kill a score but I find good tenants there. What I look for is collection accounts. I have my own formula to calculate a score based on how the account is rated. My scale is for a 1 (account paid as agreed, no latex) to a 10 (collection account pd or unpaid). Waive all medicals (also a score killer). This system has also been flawless for me.
- · Your "spidey senses" could land you with a $10,000 fair housing charge. Telling the gov't that you turned down an applicant based on their Facebook pictures isn't going to end well for you
- · "Co-Signers: No difference. Have them sign the same lease. That said, every name you add is going to mean paying for additional charges for the sheriff to serve them.
- · You only want co-signers who own property close enough to you where you can file a court case against them to recover damages."
- · We toss all income regardless of source into the same bucket. 3x needed for good credit, 4x for marginal.
- · Gov't sources of income are reliable. Obviously we don't discriminate based on age. It's been my experience that older tenants are better tenants regardless of income.
- · I struggle with my lower end stuff which is why I just move a personal one to sec 8. Times have really changed. Homes that our parents and grand parents lived in aren't something young people today want to live in. The younger generation seems to tie a lot of importance/status to their home. The definition of a starter home as moved up im"
- · I won't go into full details, but my formula weighs strongly against collections and ignores debt. Low 500s may even pass in some instances. Bankruptcy counts as one ding and wipes out all associated accounts. I'm pretty confident that if I graphed my scoring (or even credit score) vs. cost to fix up after move out you would see a direct correlation
- · "My current property manager just stresses ""good tenants"" as the 1st, 2nd, 3rd, and 4th most important things. We ask for first month, last month, and security deposit along with background checks, and generally just advertise the going rate for comparable rents in the area. If 3x the rent up front isn't not doable, chances are I don't want those tenants any way. I am more than happy to go a month vacant to find a good tenant.
- · As for jacking up the rate at first, good tenants are generally somewhat smart, and would steer clear of inflated rents. I mean, not saying it can't work out, just doesn't seem worth it."
- · "I've used youcheckcredit.com in the past, but $35.00 for comprehensive is slightly better.
- · I did find this site, which may kind of do it all - http://leaserunner.com/"
- · don't think it has the exact features you're looking for, but I've been using TransUnion Smartmove for background checks after receiving a paper application.
- · Section 8 - You don't have to take section 8 and can refuse to show. It's going to require some paperwork and an inspection. The inspection is going to be pretty tough. I just had one yesterday and had a punch list of over 30 items. Some things like potential poison ivy in the front bed, wasp nest, and window screens seem kind of minor but have to be dealt with. The best thing is that a majority of your rent is going to be paid for by the gov't. Likely direct deposit and you won't have to chase it. They screen for felons and drug use which is a benefit. I've had better luck with sec 8 tenants in this property than standard tenants. You can not take money from a tenant for more than the allotted rent amount based on bdrms in your area. That amount can be googled. Often you'll get tenants that will offer to pay more than that amount. The inspector told me that it would not be a good thing to get caught by the gov't doing this. Hit me up with any questions
- · https://www.thebalance.com/how-much-will-section-8-pay-landlords-2124978
- · In our county, section 8 is not that cut and dry. The amount depends on a lot of things. The tenant actually qualifies for X amount. So if you get a sec 8 tenant that only qualifies for 625, that is all you can charge (plus fees). Your house will also be inspected and appraised. Repairs will need to be made. You can go to your sec 8 office and ask for a landlord packet which should detail out what they will inspect/expect. And it should tell you how they arrive at the appraisal. Ours starts at a base price based on sq ft, bedrooms, bathrooms. And adds for stuff like window coverings, garage, condition of each room (paint and flooring).
- · "Our tenants can pay the difference between their personal allowance and the amount of the rent as long as the rent is less than the maximum allowable for a x bdrm house. The last tenant I took evidently was told her share was $39 a month. This was calculated based on her income. Not sure if it was fixed or based on the amount of rent of my home. I noticed the inspector ""scoring"" my home during the inspection for many of the items that you mentioned. Not really sure how that factors in. I this county the inspection comes after the tenant is identified. As you mentioned, each county seems to have flexibility regarding how they administer the program as long as they stay within certain guidelines.
- · I really should get a better education on the process, I just don't have enough sec 8 housing to justify the time."
- · You should be able to ask for the "score sheet". I did once, and was told I was the only LL to ever ask to see it
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EYLive
Footballguy
What's a good way to end a lease with a tenant? I have a good relationship with my tenant of 10 months but I think I want to move my parents into that home in May. Are there state specific laws on what the tenant's rights are? Or can I just sent a friendly email telling them I'm no longer going to rent the place at the expiration of the current lease?
Zegras11
Footballguy
Zegras11
Footballguy
@Tiger Fan
Nice post!
Started using management software to start the year. Always had a problem with the cost of software and found something that charges by how many units you have.
https://www.rentecdirect.com/
Does just about everything including credit and criminal checks.
Nice post!
Started using management software to start the year. Always had a problem with the cost of software and found something that charges by how many units you have.
https://www.rentecdirect.com/
Does just about everything including credit and criminal checks.
Random
Footballguy
Did you sign a 1 year lease? In my county you would need to give a 60 day non renewal notification.
Random
Footballguy
@Tiger Fan do you have a few properties picked out? Whats your area? Are you going to buy a vacant beater to fix up or an established property with tenants? Single, Double, or Multi? This is the fun part!!
Sand
Footballguy
Any general advice about management companies? Items to look out for? I have come into possession of a house (I want to sell, rest of the family wants to rent and utilize). This will be a week to week rental place on the beach. They charge 22% and take care of advertising, renters, etc.
The income will be decent, but the 25k of renovations on a timeline to get ready for high rental season is a huge PITA (as is cleaning the place out - it's a mess). Doesn't help it's 5 hours away.
Was going to wait to put together a post with some more concise thoughts...but since you asked...here's what comes off top of mind. Feel free to drive a hole in my assumptions or ask further questions.
Background
- Financially, I'm in a very good place. I'm 38yo, zero debt...have retirement taken care of....and expect to have around $30-$40k in cash each year that I'm looking to do something with. Additionally, I have up access to $400k in a 10year Interest Only (at prime) HELOC if necessary. I say this not as a "Hey look at me!", but b/c it plays into the risk/reward scenario.
- I'm looking to have the ability to retire in 15 years, I'll be 53 at the time...and want the 7 years of income until I start receiving retirement/pension income penalty free.
- My entire retirement accounts right now are stocks/mutual funds (will phase this down over time), but want to diversify my portfolio a little bit
- I live in New Orleans, so ideally would want something within about a 45 minute radius
- I'm a "marathon, not a sprint" guy when it comes to money....if you've seen my posts in the personal finance or gambling thread, you've seen that...so I don't have a "get rich quick" mentality at all
- Also, I'm not a handyman at all, and don't have the appetite for doing that type of work....i'm completely ok with paying a property manager 8-10% to be headache free....I realize that cuts the profitability and makes fewer properties available from a numbers perspective
- What I do have is patience, especially when it comes to finding the right initial property. In a perfect worlds I would want an established property with tenants that the existing owner is looking to sell for whatever reason. I'd have a financial model in my mind around what the right price would be vs. existing rental income to determine if I wanted to pursue. So one of the things I need to do sooner rather than later is find an agent that's willing to do the research to find properties that fit that scenario. I think I have something to bring to the table, b/c if things work out, I have the financial latitude to purchase at least one of these a year.
- I'm willing to start very small...even a condo in a huge complex if the #s work out....just want to test the waters to see how it all goes for me
- Find the right property manager
- Find the right agent
Random
Footballguy
Well, honestly, I'm going to be of very little help here. You're plan is the polar opposite of mine. You've done (are doing) way more research and planning than I did. Actually, I didn't choose LLing, LLing chose me (haha). I was a flipper that got caught in the crash. Kept finding cheaper and cheaper properties. Kept buying. Didn't really care what I got as long as it was local and cheap.
Good luck and keep us updated here.
BassNBrew
Footballguy
Just talk to several people a go with the most professional. Given you're background it will become apparent. Look out for hidden fees that are buried in the mgmt agreement and the opt out penalty.
You've been to my vacation rental. If I had it to do over I would have bought another local long term rental property. Everything else cash flows and isn't upside down. Tell you wife that if you sell you will take her to x, y, and z the next three years. If you don't, her vacation will be to the beach property will be compromised deep cleaning and painting each of the next three years. The reality is that your biggest limitation will be your vacation time. Given that you only have X amount of days off, do you want to devote Y number of those to working on the property? You could farm that out, but that might impact whether this is a passive investment or active investment, hence deductibility. Also if this was acquired at a zero cost base, you may not be able to appreciate which means the income will be taxed hard.
If by family you mean other adults that you don't sleep with, have them buy you out and then tell them stories about your great trips over Thanksgiving dinner while they discuss who's going to to the repairs at the rental property.
Sand
Footballguy
Yeah - I don't want to do grunt work on a house 5 hours away. Sadly buying out isn't an option as one of the ones who wants to utilize the place is my wife. So, yeah, there's that.
By the bold you mean depreciate, right? How does a passive vs active investment differ as far as deductibility? We do have a basis in the house (with more going in as we renovate), though I think it's small compared to the total worth. I haven't ever had to figure out taxes on rental properties (man I need an appointment with a tax guy - figuring out the basis is going to be pretty complicated). This is a new thing (I either want 0 properties or 10 - 1 sucks). The good news is the house will easily be cash flow positive next year after all the reno is done and on a gross basis should bring in a goodly chunk of change. I think I need to find a book on rental tax stuff.
Oh, and let me tell you the joys of having two wives chime in on the renovations - "you need to replace that (fully functional) chandelier, it looks awful", "just replace all the fans in the house while you're doing those two", and "that tile will look hideous with the flooring you're putting in, we need to just redo the floors in the entire house". I swear I can literally see the cash leaving my bank and heading south.
Oh, and to answer the question about taking X days off, I hate the beach - even though this house is on one of the nicest beaches in the world. I'd rather not go at all. I'd rather rent a mountain cabin. First world problems.
Maybe something that I should have also added to my short list of "to dos" (and probably the first) is to determine what the right thing for me to do tax wise with respect to the property...especially b/c I don't need the money in the short term.
Zegras11
Footballguy
I was 42 when I started and it took me 15 years of investing in RE to be able to retire off it just by itself. Use the HELOC money if it makes sense.
BassNBrew
Footballguy
Yup, meant depreciate. The passive investments can become non-deductible depending on your income as I understand it. That's why many here have recommended that if you hire a PM, still have enough involvement to claim that it's non-passive.
By cash flow positive, you need to factor in that if it's worth $500,000, that 5% is worth $25,000 a year.
By taking days off, I meant that if you spend 5 days working on the place and just keeping tabs on crap, that's a chunk of your days off.
I getting the impression that various family members may have an interest. If that's the case, I strongly urge you to either buy them out or have them buy you out. While your paths may be in tandem now, life happens and they may not be later.
Sand
Footballguy
Sometimes I just want to scream at the ########s who made up our tax code. More #### to look up. On a 30 second reading I'm not phased out, I don't think. More reasons to just sell, pay the tax man once, and be done with it.
The current "plan" is to rent it out and then see about selling. I want to rent out for just long enough to get to the prime selling season next year (February, which is weird time for real estate to be hot). I have a feeling the "seeing about selling" may turn into a house I have to take care of for a good while (guess who gets to do the bills/taxes?). So I'm with you there but family is family. At least my brother(50/50 with him) is sane, so it could be worse.
Gopher State
Footballguy
My thoughts on rentals:
bigger is better, it costs x dollars to maintain a property, I.e. Roofs, etc, I would not purchase anything smaller then a 4 plex
Make sure your insurance covers damage by renters and has loss of rents
keep in mind when you want to sell most banks will require your buyer to put down about 40 percent, or more so you may have to sell contract for deed.
make sure the property is up to code, my in laws got burned on this
We invested in farm land vs rentals, less work, and great return on investment
bigger is better, it costs x dollars to maintain a property, I.e. Roofs, etc, I would not purchase anything smaller then a 4 plex
Make sure your insurance covers damage by renters and has loss of rents
keep in mind when you want to sell most banks will require your buyer to put down about 40 percent, or more so you may have to sell contract for deed.
make sure the property is up to code, my in laws got burned on this
We invested in farm land vs rentals, less work, and great return on investment
BassNBrew
Footballguy
Well at least when he doesn't report the income and the feds seize the property and freeze everyone's bank account and give your #### the once over, you'll have a good laugh during the holidays.
Sand
Footballguy
I can honestly say that this won't be the issue we run into. They both have good incomes and are solvent. But I'm sure laughing on what Christmas would look like after this happened. The issue is more with intent over the house disposition and attachment issues (been in the family for 25 years). I have one position because I'm the one that will be doing all the heavy lifting, bills, etc. and am the one who hates the beach. Everyone else loves it. They're already grousing at my suggestion they don't use the house during the summer as that is a $3500 decrease to the rental income.
Random
Footballguy
Would love to hear what you find out. Not sure there's any tricks to reduce taxes aside from depreciation (which we get very little of buying properties at basically the value of the land).
Random
Footballguy
All seem a little over-simplistic.
Would you rather pay 250K for a 4plex that brings in 1600/mo or buy 15 sfh's that bring in 10K+/mo?
What kind of policy would you have to cover this? How expensive is it? I carry dwelling fire policies (with loss of rent) and an umbrella for liability.
True if you're selling to an investor (but other investors will have 40% down for a property that has good cashflow), but if you have SFHs you can also sell to owner occupants.
Good advice.
Would like to hear more about farmland and the returns, but around me it is very expensive. Almost looking like bubble territory.
gianmarco
Footballguy
Situation with tenant that is making me nutty and want to run by you guys to see some thoughts:
The house, which is about 10 years old and in pretty good shape, inhabited by husband, wife and 2 year old. The bathroom to the kid's room has a tub/shower. There was a problem with the shower/tub faucet where the hot water couldn't be turned on so I called a plumber to come out and repair after I looked at it and couldn't do it myself. Tenant's mother stays at home during the day with the kid while parents are at work. I go to the house as well and meet with the plumber, show him the problem. The cartridge has to be replaced and he didn't have it with him so he said he'd go get it and replace. Total cost $225. No big deal, needs hot water. I also decide I don't need to hang around at this point and wait an hour as I know what's going on and the mother is there in the house with the kid.
While the plumber and I are there, the mother also states that the diverter to the tub spout doesn't work well and some water comes out below when you pull it up for the shower. Tenant didn't mention this to me when he first called about the problem so I didn't know about this until that moment. Plumber says he'll take a look and can talk to the mother after he replaces the part. This was 2 days ago.
Just now hearing from tenant that the diverter wasn't "fixed" by plumber and that it's inconvenient because the pressure isn't good and they will have guests coming during the holidays. Wtf? If he had told me from the beginning, I would have made sure plumber was addressing both. Mother didn't make it sound like a major issue, just a "hey, while you're there, anything to make this better?" type thing. Plumber showed her a "vinegar fix" but that he wasn't authorized to do any more work (which he technically wasn't) and wasn't going to do an actual repair or replace. If she would have just called me at that point I would have told him to just take care of it while he's there. But that didn't happen, of course.
The fix is pretty simple I'm sure either by repairing the diverter stem ($5 for the repair kit) or just replacing the spout (similar ones at Home Depot for like $20-25). But I'm a bit annoyed that he's complaining that the plumber didn't fix it at the time and now I've gotta call the plumber back again tomorrow to see if they might be able to do it.
Bottomline, is this something that is even my responsibility? I mean, not having working hot water for the tub, sure, I'll get right on that. But a leaky tub faucet that is lowering shower pressure (who knows how much)? When I used to rent, I'd NEVER bother my landlord with that kind of thing. I either lived with it, dealt with it myself, or called someone to fix it and that was that.
I'm not paying for the plumber to come back out at this point when the way this was communicated by the tenant was awful, IMO. Wrong thinking? What's the right way to handle this here?
The house, which is about 10 years old and in pretty good shape, inhabited by husband, wife and 2 year old. The bathroom to the kid's room has a tub/shower. There was a problem with the shower/tub faucet where the hot water couldn't be turned on so I called a plumber to come out and repair after I looked at it and couldn't do it myself. Tenant's mother stays at home during the day with the kid while parents are at work. I go to the house as well and meet with the plumber, show him the problem. The cartridge has to be replaced and he didn't have it with him so he said he'd go get it and replace. Total cost $225. No big deal, needs hot water. I also decide I don't need to hang around at this point and wait an hour as I know what's going on and the mother is there in the house with the kid.
While the plumber and I are there, the mother also states that the diverter to the tub spout doesn't work well and some water comes out below when you pull it up for the shower. Tenant didn't mention this to me when he first called about the problem so I didn't know about this until that moment. Plumber says he'll take a look and can talk to the mother after he replaces the part. This was 2 days ago.
Just now hearing from tenant that the diverter wasn't "fixed" by plumber and that it's inconvenient because the pressure isn't good and they will have guests coming during the holidays. Wtf? If he had told me from the beginning, I would have made sure plumber was addressing both. Mother didn't make it sound like a major issue, just a "hey, while you're there, anything to make this better?" type thing. Plumber showed her a "vinegar fix" but that he wasn't authorized to do any more work (which he technically wasn't) and wasn't going to do an actual repair or replace. If she would have just called me at that point I would have told him to just take care of it while he's there. But that didn't happen, of course.
The fix is pretty simple I'm sure either by repairing the diverter stem ($5 for the repair kit) or just replacing the spout (similar ones at Home Depot for like $20-25). But I'm a bit annoyed that he's complaining that the plumber didn't fix it at the time and now I've gotta call the plumber back again tomorrow to see if they might be able to do it.
Bottomline, is this something that is even my responsibility? I mean, not having working hot water for the tub, sure, I'll get right on that. But a leaky tub faucet that is lowering shower pressure (who knows how much)? When I used to rent, I'd NEVER bother my landlord with that kind of thing. I either lived with it, dealt with it myself, or called someone to fix it and that was that.
I'm not paying for the plumber to come back out at this point when the way this was communicated by the tenant was awful, IMO. Wrong thinking? What's the right way to handle this here?
sbonomo
Footballguy
Sound like you should just fix it. Kind of a PIA but what do you do? You should have made it clear to the plumber that he needed to call you one he diagnosed the problem to discuss if you wanted to have him fix it or if you would be fixing it yourself. One thing i have found is that tenants will do zero maintenance and demand the world. I am reasonable but if they go over the top i tell them to just pound sand.
gianmarco
Footballguy
Spoke with the plumber today. He actually didn't do it because he'd charge $100 to get it done and figured I could and would want to do it on my own for 1/4th of that. I actually appreciate that from the plumber.
Tenant is going to try and do it himself and if not, I'll take care of it.
Just aggravated he wanted him to come back out and fix it and expect it to be paid when it's been like this for months and didn't even tell me about it and now it's a big problem. Appreciate the feedback, though, and something I'll keep in mind moving forward.
ghostguy123
Footballguy
Just get it fixed. Also tell (probably remind) the tenants to let you know about any and all issues as they arise.
Move on. Doesnt really sound like the tenants did anything "wrong". Sounds more like miscommunication all around rather than "bad" communication.
gianmarco
Footballguy
Ugh, just getting frustrated with this couple. They are actually moving out in one month and luckily I have found a seemingly great replacement for the next 3 years, so that's the bright side.
When we turned the house over to them in October almost 2 years ago, the outside of the house was in great shape as I had our landscaper come and clean everything. The front driveway has two strips of landscaping that had 5 boxwoods on each side and 24 plants planted between them in total (irises and phlox). We bought those for a total of ~$250 a few years ago and they were in great shape and mature.
Over the last 2 years, they've done virtually no upkeep of the area and lots of weeds have grown in the place. I told them it needed to be cleaned up before they left in at least a similar condition as it was left for them or I could have our person do it and would only have them pay half. It was their responsibility for the upkeep of the outside and they didn't do so. It would have ended up costing him like $75 to give me half to get it taken care of. He decided to just do it on his own.
Well, it looks like he just pulled up every single plant that wasn't a boxwood as he couldn't tell what was weed and what was plant, I suppose, so he just took everything out. I'm pretty aggravated with this. I know we're only talking a couple hundred bucks here to get new plants, but wtf? Is it even worth bothering them about? Is that an unreasonable expectation?
When we turned the house over to them in October almost 2 years ago, the outside of the house was in great shape as I had our landscaper come and clean everything. The front driveway has two strips of landscaping that had 5 boxwoods on each side and 24 plants planted between them in total (irises and phlox). We bought those for a total of ~$250 a few years ago and they were in great shape and mature.
Over the last 2 years, they've done virtually no upkeep of the area and lots of weeds have grown in the place. I told them it needed to be cleaned up before they left in at least a similar condition as it was left for them or I could have our person do it and would only have them pay half. It was their responsibility for the upkeep of the outside and they didn't do so. It would have ended up costing him like $75 to give me half to get it taken care of. He decided to just do it on his own.
Well, it looks like he just pulled up every single plant that wasn't a boxwood as he couldn't tell what was weed and what was plant, I suppose, so he just took everything out. I'm pretty aggravated with this. I know we're only talking a couple hundred bucks here to get new plants, but wtf? Is it even worth bothering them about? Is that an unreasonable expectation?
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ghostguy123
Footballguy
No, wasn't worth bothering them about it in the first place. You could have just kept a portion of the security deposit.
ghostguy123
Footballguy
I am also kinda beginning to think this landlord stuff is for the birds, and this is after only having GOOD tenants so far for the past few years. Unfortunately there aren't any livable properties for 10 grand here that rent for 800 like some of you guys in this thread. You can't even buy a 1/8 acre piece of overgrown land for 10 grand here. It simply might not be making me enough money to be worth it. I have said this before, but I either need to just sell the two that I have, or buy like 8 more over the next 5-10 years. Going to put a lot of thought into this over the course of the next 11 months for when both my current tenants will quite possibly be moving out next year.
Someone talk me off the ledge
Someone talk me off the ledge
gianmarco
Footballguy
Is that allowed? I thought you have to give them a chance to address an issue themselves.
I mean, at what point is the cost of something worth addressing? $50, sure not a big deal. But $200-300? If not that, how much?
ETA -- Reading above, I don't know if it matters, but our house we rent out is a nice property (3400 sq.ft and nice finishes in good location) that we charge $2k/month. Any and all issues have been taken care of by us very promptly. I actually try to be pretty lax with stuff, but the above just really aggravated me as there was no reason for it.
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ghostguy123
Footballguy
I would much prefer to keep a portion of the deposit and fix things myself. At least that way you can make sure it's done right, and it's done on their dime.
Does your lease say you need to point things out and give them an opportunity to fix it? Either way, it sounds like they did not fix the issue, and you should keep a portion of the deposit anyway considering they dug out flowers and cost you money doing so.
BassNBrew
Footballguy
I have a letter I send to my tenants when they put in their notice to vacate outlining the expectations with basically a checklist. I have them return the key to me and don't do a walk through with them. It never works out well sending them back to do things as they aren't done right and then you're in a pissing contest when they can say they went back and addressed the issues.
Random
Footballguy
Should be a simple math problem(s).I am also kinda beginning to think this landlord stuff is for the birds, and this is after only having GOOD tenants so far for the past few years. Unfortunately there aren't any livable properties for 10 grand here that rent for 800 like some of you guys in this thread. You can't even buy a 1/8 acre piece of overgrown land for 10 grand here. It simply might not be making me enough money to be worth it. I have said this before, but I either need to just sell the two that I have, or buy like 8 more over the next 5-10 years. Going to put a lot of thought into this over the course of the next 11 months for when both my current tenants will quite possibly be moving out next year.
Someone talk me off the ledge
What kind of after tax cash flow are you making per unit?
What is your roi?
How much are you making per hour?
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gianmarco
Footballguy
Right. That was my plan and why I said just leave the house in a reasonably clean state and take care of the weeds outside so it looks close to what it did when it was left for you. That's it. And if you don't have the time, I'll even get it taken care of and charge you half (since I expect to have to do some more anyway for new tenant).
Rhythmdoctor
Footballguy
Anyone live in a building with your tenant? I own a 2 flat and out upstairs unit is not currently occupied. The reason is because our building allows sound to leak through very easily. I would like to do some sound proofing/dampening but seems expensive to do it right. Curious if anyone has done any soundproofing and what were the results.
ghostguy123
Footballguy
Not sure the "how much are you making per hour" has such a clear answer. I mean, the answer is probably "a lot", but it sucks to be on call every second of every day.
I probably profit about 5 grand per year for the unit i dont have a mortgage on. My other unit is about the same but i dont have a positive cashflow on thay one due to the 15 year mortgage. I about break even on the cashflow on that one.
I could invest more and pick up a few overtime shifts at my job throughout the year and likely do better long term.
Unless of course i kept buying more units using equity on the others, but at that point i am probably biting off more than I can chew.
BassNBrew
Footballguy
BassNBrew
Footballguy
Luckily I'm on top
I'm looking at this for the door downstairs to reduce some noise in the stairwell https://www.amazon.com/MuteX-Soundproof-Material-Black-sqft/dp/B00YCM1DQW/ref=sr_1_37?s=musical-instruments&ie=UTF8&qid=1531997285&sr=1-37&keywords=sound+proof+padding
From what I've read, insulation is a good for noise reduction. Wish I had blown in insulation in the floor between us. Will likely do that when I'm between tenants. When I was re-doing my flooring I went rubber pad, 3/8" inch OSB secured by at least a screw every square foot, rubber pad, then my engineered wood floor. No more squeaks and cracking when my heavy ### walks anymore.
You may be exempt from federal housing laws if you aren't a real estate agent or use one to assist with your unit. I'm posting the federal info below but you need to look into your state info. I'm not suggesting you use this in the traditional sense that people think of discrimination, but to seek out that "little old lady" that still has good enough hearing that the TV won't be up loud or finding a tenant who works the same shift as you do. Just be aware that you can't use discriminatory advertising such as must be 40 or older.
ghostguy123
Footballguy
And eat into my small profits even more.
At this point i plan to sell in a year unless both my current tenants renew, in which case i will reevaluate in 2020.
Just starting to think its not for me. I had to spend a lot of time in between my last tenant and this new one fixing things. Sucks with a full time job and a 2 year old at home.
Maybe i will change my tune a year from now. Who knows.
BassNBrew
Footballguy
A good pm can often pay a good chunk for themselves. I get better repair pricing than most people can for legit contractors and have a higher priority. With my advertising reach and showing availability and technology I can lease units faster. Two weeks faster means my lease fee is free.
Cant believe that you have small profits in this market based on when you bought.
Random
Footballguy
I guess you should be able to ballpark this. If you spend 10hrs/mo for the 2 units (on average) and make 5K/yr each (either equity or cash) then thats $85/hr (you have 2 units?). Are you really doing better than that working for someone else?ghostguy123 said:
I think I've posted this before, but having <5 units sucks. 1 bad tenant really impacts the bottom line. At 10 or so it just starts to roll off your back. If you want to continue in this, get 10 properties and hire a pm if you dont like the work.
Random
Footballguy
You should seriously consider delegating some of the responsibility. I don't know any successful landlords that do everything on their own. Sounds like you would benefit greatly from a property manager or at least a maintenance guy.ghostguy123 said:
What area do you operate out of?
BassNBrew
Footballguy
I missed that
He’s making 5k a year and could hire someone for 1-2k a year and do nothing but open checks. Well in this age open an email saying his cash is in the bank.
Zegras11
Footballguy
We had two handymen when we first started out. They were great and cheap.
Oh, and I just bought three turnkey VRBO/Airbnb properties that are killing it.
ghostguy123
Footballguy
Making 5k a year or using the 55-60k i would sell for and invest in index funds.I missed that
ghostguy123
Footballguy
If i could schedule those hours it would be a different story. Its always when I absolutely dont want to be hassled.
As for the number of units, yeah, I either want none or ten.
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