*** Official Landlord Thread *** (2 Viewers)

[BassNBrew]

We have to evict someone today. I'm pretty sure the language on the 30-Day Notice to Vacate is pretty standard, but wanted to double-check in here. Anything I need to be sure to include? My husband is going to take it by there today and have her sign while he stands there, so we aren't too concerned with Proof of Delivery or anything like that.

Not standard. Varies in every state. Tens days in my state.

 

[Zegras11]

I have a tenant who is interested in renting, but they have a pet. I have never allowed a pet in the past, but this potential tenant seems pretty responsible.Small dog........maltese.......5 years old.What is a reasonable amount to charge for a pet security deposit? There is no carpeting near the doors where most dogs have their accidents.I live in Illinois, so there is no statutory limit to the amount that can be charged for a security deposit.

I charge $200. Non-refundable.ETA: Never ever allow a pet over 25-30 lbs.

$300 non-refundable here on most of the rentals I manage.

Where would that be? My rents are $775.

 

[BassNBrew]

Don't plan on making anything on it unless you can bank 20% per month on top of the mortgage payment. Plan on spending more than you ever thought was possible for maint.....good luck, depending on how much you make personally you may or may not be able to deduct any losses. Lastly, 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. Good luck.

Any idea what the income limit would be to be able to deduct losses? Using the rental as a tax write off is one of the main reasons I wanted to go that route.

Ask you CPA or tax preparer...once you hit the AMT it is a sliding scale. I make good money (1xx,xxx) and have not had much in the way of deductions for a while. If you set up an LLC you will have to file a seperate tax return that will result in your recieving a K1. This is an added expense but well worth the peace of mind from a liability perspective.

If he goes with a single-member LLC then he doesn't have to file a seperate return so there wouldn't be much added expense if he goes that route.

A couple of thoughts on this subject.In my state you do have to file a separate return and there's a yearly filing fee.It's my personal opinion that the money and time is much better spent on an umbrella policy and strong lease. An LLC won't protect you from from gross negliance or fair housing violations. With an LLC you'll likely need to hire counsel if you are sued. With an umbrella policy the insurance company will be providing you counsel up the policy cap.Lastly, transferring title to an LLC likely violates your mortgage agreement. Odds of getting caught are slim, but it will come out if you ever run for political office.

 

[BassNBrew]

I have a tenant who is interested in renting, but they have a pet. I have never allowed a pet in the past, but this potential tenant seems pretty responsible.Small dog........maltese.......5 years old.What is a reasonable amount to charge for a pet security deposit? There is no carpeting near the doors where most dogs have their accidents.I live in Illinois, so there is no statutory limit to the amount that can be charged for a security deposit.

I charge $200. Non-refundable.ETA: Never ever allow a pet over 25-30 lbs.

$300 non-refundable here on most of the rentals I manage.

Where would that be? My rents are $775.

NC. Most seem to have adopted that in this area, but the do vary from nothing to $500.

 

[Random]

I charge $25/mo.

 

[gmbacm]

 

[Cawbird]

I have a tenant who is interested in renting, but they have a pet. I have never allowed a pet in the past, but this potential tenant seems pretty responsible.Small dog........maltese.......5 years old.What is a reasonable amount to charge for a pet security deposit? There is no carpeting near the doors where most dogs have their accidents.I live in Illinois, so there is no statutory limit to the amount that can be charged for a security deposit.

I charge $200. Non-refundable.ETA: Never ever allow a pet over 25-30 lbs.

$300 non-refundable here on most of the rentals I manage.

Where would that be? My rents are $775.

NC. Most seem to have adopted that in this area, but the do vary from nothing to $500.

Great feedback.........thanks!Would it be better to just add on to the monthly rent (say $50/month), or just get the added security deposit up front. It seems like there is a wide range of what is charged. Great point about friends then bringing their pets to the house.

 

[BassNBrew]

I have a tenant who is interested in renting, but they have a pet. I have never allowed a pet in the past, but this potential tenant seems pretty responsible.Small dog........maltese.......5 years old.What is a reasonable amount to charge for a pet security deposit? There is no carpeting near the doors where most dogs have their accidents.I live in Illinois, so there is no statutory limit to the amount that can be charged for a security deposit.

I charge $200. Non-refundable.ETA: Never ever allow a pet over 25-30 lbs.

$300 non-refundable here on most of the rentals I manage.

Where would that be? My rents are $775.

NC. Most seem to have adopted that in this area, but the do vary from nothing to $500.

Great feedback.........thanks!Would it be better to just add on to the monthly rent (say $50/month), or just get the added security deposit up front. It seems like there is a wide range of what is charged. Great point about friends then bringing their pets to the house.

If I'm dealing with high end wood floors or large/multiple pets then I'll sometimes raise the security deposit. I prefer the non-refundable fee because you will have more cleaning on the exit. Carpet cleaning is considered normal wear and tear in this state the best we can tell.When it comes to pets I generally tell my owners (let's assume a $1000 monthly rent) that your getting $300 upfront, $1050 in security deposit, and likely renting your home one month sooner (70% of the market has a pet) on average. That amounts to $2350 which generally covers the value of most carpeting after depreciation.

 

[Zegras11]

Bass... what's the vacancy rate in your area? and what's the average time there to fill a vacancy?

 

[Raylove]

 

[BassNBrew]

Bass... what's the vacancy rate in your area? and what's the average time there to fill a vacancy?

Vacancy varies by property type. Single family homes priced correctly without warts are moving within days in most cases. Demand exceeds supply. Anything I've had longer than a couple of weeks is due to condition. We generally show prior to the current tenant moving out, but many keep their home a mess. Townhomes are hanging around a little longer, especially luxury units. Condos are still difficult to rent.A nugget for anyone looking to get into this racket...a fence is the single best investment you can make.

 

[Zegras11]

Bass... what's the vacancy rate in your area? and what's the average time there to fill a vacancy?

Vacancy varies by property type. Single family homes priced correctly without warts are moving within days in most cases. Demand exceeds supply. Anything I've had longer than a couple of weeks is due to condition. We generally show prior to the current tenant moving out, but many keep their home a mess. Townhomes are hanging around a little longer, especially luxury units. Condos are still difficult to rent.A nugget for anyone looking to get into this racket...a fence is the single best investment you can make.

Before I made my big investment, I read about a dozen books from all angles. One thing that stuck with me in my eight month search for the right property was, "if the fences are all in good repair, then expect the project to be in good shape." It makes so much sense when you think about it.

 

[Random]

Bass... what's the vacancy rate in your area? and what's the average time there to fill a vacancy?

Vacancy varies by property type. Single family homes priced correctly without warts are moving within days in most cases. Demand exceeds supply. Anything I've had longer than a couple of weeks is due to condition. We generally show prior to the current tenant moving out, but many keep their home a mess. Townhomes are hanging around a little longer, especially luxury units. Condos are still difficult to rent.A nugget for anyone looking to get into this racket...a fence is the single best investment you can make.

Before I made my big investment, I read about a dozen books from all angles. One thing that stuck with me in my eight month search for the right property was, "if the fences are all in good repair, then expect the project to be in good shape." It makes so much sense when you think about it.

I dont get it. Do you guys charge more for fences? I've had a few tenants put up their own fences, one took it down when they left. Others are still there. I have a few other properties with fences (they were there when we bought the property), and a few others without. Never thought it made a difference.

 

[Zegras11]

Bass... what's the vacancy rate in your area? and what's the average time there to fill a vacancy?

Vacancy varies by property type. Single family homes priced correctly without warts are moving within days in most cases. Demand exceeds supply. Anything I've had longer than a couple of weeks is due to condition. We generally show prior to the current tenant moving out, but many keep their home a mess. Townhomes are hanging around a little longer, especially luxury units. Condos are still difficult to rent.A nugget for anyone looking to get into this racket...a fence is the single best investment you can make.

Before I made my big investment, I read about a dozen books from all angles. One thing that stuck with me in my eight month search for the right property was, "if the fences are all in good repair, then expect the project to be in good shape." It makes so much sense when you think about it.

I dont get it. Do you guys charge more for fences? I've had a few tenants put up their own fences, one took it down when they left. Others are still there. I have a few other properties with fences (they were there when we bought the property), and a few others without. Never thought it made a difference.

I can't speak for SFH's. Never done that. I was referring to a complex of units.

 

[Random]

Bass... what's the vacancy rate in your area? and what's the average time there to fill a vacancy?

Vacancy varies by property type. Single family homes priced correctly without warts are moving within days in most cases. Demand exceeds supply. Anything I've had longer than a couple of weeks is due to condition. We generally show prior to the current tenant moving out, but many keep their home a mess. Townhomes are hanging around a little longer, especially luxury units. Condos are still difficult to rent.A nugget for anyone looking to get into this racket...a fence is the single best investment you can make.

Before I made my big investment, I read about a dozen books from all angles. One thing that stuck with me in my eight month search for the right property was, "if the fences are all in good repair, then expect the project to be in good shape." It makes so much sense when you think about it.

I dont get it. Do you guys charge more for fences? I've had a few tenants put up their own fences, one took it down when they left. Others are still there. I have a few other properties with fences (they were there when we bought the property), and a few others without. Never thought it made a difference.

I can't speak for SFH's. Never done that. I was referring to a complex of units.

Interesting. Most (all?) of the apartment complexes around here don't have fences either.

 

[BassNBrew]

Bass... what's the vacancy rate in your area? and what's the average time there to fill a vacancy?

Vacancy varies by property type. Single family homes priced correctly without warts are moving within days in most cases. Demand exceeds supply. Anything I've had longer than a couple of weeks is due to condition. We generally show prior to the current tenant moving out, but many keep their home a mess. Townhomes are hanging around a little longer, especially luxury units. Condos are still difficult to rent.A nugget for anyone looking to get into this racket...a fence is the single best investment you can make.

Before I made my big investment, I read about a dozen books from all angles. One thing that stuck with me in my eight month search for the right property was, "if the fences are all in good repair, then expect the project to be in good shape." It makes so much sense when you think about it.

I dont get it. Do you guys charge more for fences? I've had a few tenants put up their own fences, one took it down when they left. Others are still there. I have a few other properties with fences (they were there when we bought the property), and a few others without. Never thought it made a difference.

I'd say 50%+ of the sfh tenant pool would like a fence. Roughly 10-15% of my inventory has a fence.I automatically add $50-$100 to the rent when a property has a fence. Let's say a fence costs $3000 and returns $50 a month. The payback period is 5 years. In comparision a $100k house returning $1000 per month would be 8.3 years. Furthermore you don't have to pay taxes, insurance, or hoa dues on a fence and the repair cost percentage are less than a house.

 

[Random]

Bass... what's the vacancy rate in your area? and what's the average time there to fill a vacancy?

Vacancy varies by property type. Single family homes priced correctly without warts are moving within days in most cases. Demand exceeds supply. Anything I've had longer than a couple of weeks is due to condition. We generally show prior to the current tenant moving out, but many keep their home a mess. Townhomes are hanging around a little longer, especially luxury units. Condos are still difficult to rent.A nugget for anyone looking to get into this racket...a fence is the single best investment you can make.

Before I made my big investment, I read about a dozen books from all angles. One thing that stuck with me in my eight month search for the right property was, "if the fences are all in good repair, then expect the project to be in good shape." It makes so much sense when you think about it.

I dont get it. Do you guys charge more for fences? I've had a few tenants put up their own fences, one took it down when they left. Others are still there. I have a few other properties with fences (they were there when we bought the property), and a few others without. Never thought it made a difference.

I'd say 50%+ of the sfh tenant pool would like a fence. Roughly 10-15% of my inventory has a fence.I automatically add $50-$100 to the rent when a property has a fence. Let's say a fence costs $3000 and returns $50 a month. The payback period is 5 years. In comparision a $100k house returning $1000 per month would be 8.3 years. Furthermore you don't have to pay taxes, insurance, or hoa dues on a fence and the repair cost percentage are less than a house.

I can confidently say this would not fly with my demographics. My rents are more in the 600-700 range. My tenants are thrilled with a clean, well kept property and a responsive LL.

 

[Random]

I have a Q for the LL's. I have a small, very small 1bed efficiency sfh. Ok, its a converted detached garage. Nearly everyone that calls about it wants the utilities included in the rent. Why is this? I rarely have this question asked and expected on my 3 or 4 bed sfh's. Any advice?

 

[Judge Smails]

Just got served by the landlord for my daughter's apartment in college. Get to go to small claims court. Good times. What a soap opera this has been.

 

[FatMax]

It's my personal opinion that the money and time is much better spent on an umbrella policy and strong lease. An LLC won't protect you from from gross negliance or fair housing violations. With an LLC you'll likely need to hire counsel if you are sued. With an umbrella policy the insurance company will be providing you counsel up the policy cap.

I have an addition on the home owner's insurance for the rental that is supposed to cover this sort of stuff. It's a relatively cheap option (around $80/year) for the peace of mind.

 

[FatMax]

I have a Q for the LL's. I have a small, very small 1bed efficiency sfh. Ok, its a converted detached garage. Nearly everyone that calls about it wants the utilities included in the rent. Why is this? I rarely have this question asked and expected on my 3 or 4 bed sfh's. Any advice?

Does it have it's own address/meters?

 

[Random]

I have a Q for the LL's. I have a small, very small 1bed efficiency sfh. Ok, its a converted detached garage. Nearly everyone that calls about it wants the utilities included in the rent. Why is this? I rarely have this question asked and expected on my 3 or 4 bed sfh's. Any advice?

Does it have it's own address/meters?

Yes it does.

 

[comfortably numb]

I have a Q for the LL's. I have a small, very small 1bed efficiency sfh. Ok, its a converted detached garage. Nearly everyone that calls about it wants the utilities included in the rent. Why is this? I rarely have this question asked and expected on my 3 or 4 bed sfh's. Any advice?

I'm gonna say that it might have to do with comps.Probably many similar units DO have the utilities included because they typically may NOT have their own meter so a LL will have no choice but to include?

 

[Random]

I have a Q for the LL's. I have a small, very small 1bed efficiency sfh. Ok, its a converted detached garage. Nearly everyone that calls about it wants the utilities included in the rent. Why is this? I rarely have this question asked and expected on my 3 or 4 bed sfh's. Any advice?

I'm gonna say that it might have to do with comps.Probably many similar units DO have the utilities included because they typically may NOT have their own meter so a LL will have no choice but to include?

Very possible.

 

[Random]

Has anyone dealt with asbestos siding? We're looking at a property that has the asbestos/cement siding, and that is really the only downside to this place. Never dealt with it before, only heard the awful rumblings about how expensive it is to remove (hazmat suits, respirators, etc) which I'm sure are horribly exaggerated.

 

[Steve Tasker]

Little question for the landlords here. GF and I are currently on an informal month-to-month lease. We have been here for 30 months. Rent always on time, never had an issue with noise complaints or anything like that; we get along quite well with our landlords (husband/wife, owner-occupied home). As part of our informal agreement, we agreed that both parties would need to give 30 days notice before ending the arrangement, either them kicking us out or us leaving.We have begun looking for a new apartment. We will be applying tomorrow for a new place with an eye toward moving March 1st, though we're in no rush if it falls through and we need to wait until the summer to find a new place. I am thinking about calling him tomorrow to inform him that we're looking and that we've applied for a place...not technically giving him notice, but just out of courtesy because they've been good to us and I don't want to blindside them with "we're leaving".I'm not really worried about losing the security deposit if the landlord wants to be a stickler about it being less than 30 days if we're granted the apartment....it is what it is. Our main worry is that our landlord turns it around and gives us our 30 days with the intent to kick us out, and then we don't land the new apartment and we've got nowhere to live. What would you do as a landlord?

 

[Sabertooth]

Little question for the landlords here. GF and I are currently on an informal month-to-month lease. We have been here for 30 months. Rent always on time, never had an issue with noise complaints or anything like that; we get along quite well with our landlords (husband/wife, owner-occupied home). As part of our informal agreement, we agreed that both parties would need to give 30 days notice before ending the arrangement, either them kicking us out or us leaving.We have begun looking for a new apartment. We will be applying tomorrow for a new place with an eye toward moving March 1st, though we're in no rush if it falls through and we need to wait until the summer to find a new place. I am thinking about calling him tomorrow to inform him that we're looking and that we've applied for a place...not technically giving him notice, but just out of courtesy because they've been good to us and I don't want to blindside them with "we're leaving".I'm not really worried about losing the security deposit if the landlord wants to be a stickler about it being less than 30 days if we're granted the apartment....it is what it is. Our main worry is that our landlord turns it around and gives us our 30 days with the intent to kick us out, and then we don't land the new apartment and we've got nowhere to live. What would you do as a landlord?

I wouldn't let go of the place until you have another place lined up. As a landlord, I wouldn't boot you out.

 

[Pick]

Big fan of property management companies.

 

[Steve Tasker]

I wouldn't let go of the place until you have another place lined up. As a landlord, I wouldn't boot you out.

Yes, we are not going to put in our notice until we have another place lined up. If it's less than 30 days notice and he wants to keep my security, I'm not going to lose sleep over it...I'm a man of my word, and we agreed to 30 days.Thanks for the comments.

 

[humpback]

Little question for the landlords here. GF and I are currently on an informal month-to-month lease. We have been here for 30 months. Rent always on time, never had an issue with noise complaints or anything like that; we get along quite well with our landlords (husband/wife, owner-occupied home). As part of our informal agreement, we agreed that both parties would need to give 30 days notice before ending the arrangement, either them kicking us out or us leaving.We have begun looking for a new apartment. We will be applying tomorrow for a new place with an eye toward moving March 1st, though we're in no rush if it falls through and we need to wait until the summer to find a new place. I am thinking about calling him tomorrow to inform him that we're looking and that we've applied for a place...not technically giving him notice, but just out of courtesy because they've been good to us and I don't want to blindside them with "we're leaving".I'm not really worried about losing the security deposit if the landlord wants to be a stickler about it being less than 30 days if we're granted the apartment....it is what it is. Our main worry is that our landlord turns it around and gives us our 30 days with the intent to kick us out, and then we don't land the new apartment and we've got nowhere to live. What would you do as a landlord?

I'd keep it to myself until you know you're locked into the other place. As soon as you let him know you're looking, he's going to start looking too.

 

[BassNBrew]

Little question for the landlords here. GF and I are currently on an informal month-to-month lease. We have been here for 30 months. Rent always on time, never had an issue with noise complaints or anything like that; we get along quite well with our landlords (husband/wife, owner-occupied home). As part of our informal agreement, we agreed that both parties would need to give 30 days notice before ending the arrangement, either them kicking us out or us leaving.We have begun looking for a new apartment. We will be applying tomorrow for a new place with an eye toward moving March 1st, though we're in no rush if it falls through and we need to wait until the summer to find a new place. I am thinking about calling him tomorrow to inform him that we're looking and that we've applied for a place...not technically giving him notice, but just out of courtesy because they've been good to us and I don't want to blindside them with "we're leaving".I'm not really worried about losing the security deposit if the landlord wants to be a stickler about it being less than 30 days if we're granted the apartment....it is what it is. Our main worry is that our landlord turns it around and gives us our 30 days with the intent to kick us out, and then we don't land the new apartment and we've got nowhere to live. What would you do as a landlord?

August thru March I wouldn't do anything. April to July, I'd be giving you 30 days notice or increasing your rent. This assumes you haven't trashed the place or it's not a dump to begin with...in otherwords it will be a quick re-lease. If you kept quiet I'd probably forget about the situation.Tell anyone that your applying to that you're more than willing for them to do a landlord reference, but that they shouldn't do that until your approved on all their other qualifications. Tell them to call you so you can notify your landlord. Gerneally works out well this way.

 

[comfortably numb]

I'm looking to get into the landlord business.I have some landlord experience with regards to dealing with tenants and day/day issues taking care of my moms house.I wanted to pick up a house to hold as a rental property with hopes of having a few long term.Some random and dumb questions if anyone has experience to offer.My credit is excellentI have no debtI have some down payment money, but would like to use as little as possible with such low rates-Should I open up a LLC?-If I rent at a discount to someone who is agreeing to maintain the property. Should I have them pay full rent and PAY OUT to them with a check for tax purposes? Or should i just say...your rent will be $200 less because you will do XYZ?-Is there a good basic realistic minimum that I should strive for to cover costs and make monthly profit? Meaning if my monthly costs are 1500. Should my rental income be at least 1800? 2000? 2500? to cover down the road costs etc...-Profits and taxes. Lets say I profit $500/month. How will taxes be paid on that? At the end of the year is I profit 6k. What will taxes on that cost me? In some cases am I better off investing back into the house to avoid paying taxes? Add a fence, paint the house etc...-Any good books/websites to check out?

 

[Steve Tasker]

Little question for the landlords here. GF and I are currently on an informal month-to-month lease. We have been here for 30 months. Rent always on time, never had an issue with noise complaints or anything like that; we get along quite well with our landlords (husband/wife, owner-occupied home). As part of our informal agreement, we agreed that both parties would need to give 30 days notice before ending the arrangement, either them kicking us out or us leaving.We have begun looking for a new apartment. We will be applying tomorrow for a new place with an eye toward moving March 1st, though we're in no rush if it falls through and we need to wait until the summer to find a new place. I am thinking about calling him tomorrow to inform him that we're looking and that we've applied for a place...not technically giving him notice, but just out of courtesy because they've been good to us and I don't want to blindside them with "we're leaving".I'm not really worried about losing the security deposit if the landlord wants to be a stickler about it being less than 30 days if we're granted the apartment....it is what it is. Our main worry is that our landlord turns it around and gives us our 30 days with the intent to kick us out, and then we don't land the new apartment and we've got nowhere to live. What would you do as a landlord?

August thru March I wouldn't do anything. April to July, I'd be giving you 30 days notice or increasing your rent. This assumes you haven't trashed the place or it's not a dump to begin with...in otherwords it will be a quick re-lease. If you kept quiet I'd probably forget about the situation.Tell anyone that your applying to that you're more than willing for them to do a landlord reference, but that they shouldn't do that until your approved on all their other qualifications. Tell them to call you so you can notify your landlord. Gerneally works out well this way.

Thanks for the comments; your final paragraph is how we handled it. We looked at the apartment on 1/30 and applied the next day, telling them they can do the landlord reference but that we wanted to warn him ahead of time. New place decided that they didn't need a reference after they ran our credit. We signed the lease on 2/2 and I called my landlord an hour later. About as painless as possible for us.

 

[Steve Tasker]

-Profits and taxes. Lets say I profit $500/month. How will taxes be paid on that? At the end of the year is I profit 6k. What will taxes on that cost me? In some cases am I better off investing back into the house to avoid paying taxes? Add a fence, paint the house etc...

I won't answer the rest cause I'm not a landlord, but since I'm in the thread....How the rental income is taxed will depend on how you have it structured. If you own it personally or in a single-member LLC, it will be taxed on your personal income tax return at your ordinary income rate - ie you'll be taxed more on it if you're in a higher tax bracket. Keep in mind that depreciation will be a non-cash expense that will decrease your taxable income on the property. Also keep in mind, though, that mortgage principal payments are not deductible, so you'll be paying cash out without a corresponding tax deduction.Hope this helps.

 

[BassNBrew]

I'm looking to get into the landlord business.I have some landlord experience with regards to dealing with tenants and day/day issues taking care of my moms house.I wanted to pick up a house to hold as a rental property with hopes of having a few long term.Some random and dumb questions if anyone has experience to offer.My credit is excellentI have no debtI have some down payment money, but would like to use as little as possible with such low rates-Should I open up a LLC?-If I rent at a discount to someone who is agreeing to maintain the property. Should I have them pay full rent and PAY OUT to them with a check for tax purposes? Or should i just say...your rent will be $200 less because you will do XYZ?-Is there a good basic realistic minimum that I should strive for to cover costs and make monthly profit? Meaning if my monthly costs are 1500. Should my rental income be at least 1800? 2000? 2500? to cover down the road costs etc...-Profits and taxes. Lets say I profit $500/month. How will taxes be paid on that? At the end of the year is I profit 6k. What will taxes on that cost me? In some cases am I better off investing back into the house to avoid paying taxes? Add a fence, paint the house etc...-Any good books/websites to check out?

I'll be in the minority, but an LLC is way down the list when starting. The bank won't let you put it in your LLC name (unless you're putting a lot down). It won't protect you from gross negligence. In states like mine you'll have to file a separate tax return and pay a fee each year. Umbrella insurance offers way more bang for the buck.Doesn't matter to the IRS on the second. Net income is the same. Why would you give the tenant keys to handle your repairs? You'll either be incentivizing them to find stuff that is worng to reduce theri rent or putting them in a position where they don't report repairs (referring to people who tell tenants they are responsible for first x amount of a repair...which can also be illegal). It's also your investment, you should determine the workmanship level.8-10% return is a good number. Don't include depreciation or principal.Taxes get really complicated. Depends if you are passive v. not passive investor, you're income, etc. You'll get to deduct depreciation for 27.5 years so unless you are putting a bunch down, this will be a tax loss. The amount of loss that's deductible v. carried over can depend on your income.Mike Anderson (if he's still around and Jeff Pasquino might be able to point to to good written resources.

 

[Zegras11]

I'm looking to get into the landlord business.I have some landlord experience with regards to dealing with tenants and day/day issues taking care of my moms house.I wanted to pick up a house to hold as a rental property with hopes of having a few long term.Some random and dumb questions if anyone has experience to offer.My credit is excellentI have no debtI have some down payment money, but would like to use as little as possible with such low rates-Should I open up a LLC?-If I rent at a discount to someone who is agreeing to maintain the property. Should I have them pay full rent and PAY OUT to them with a check for tax purposes? Or should i just say...your rent will be $200 less because you will do XYZ?-Is there a good basic realistic minimum that I should strive for to cover costs and make monthly profit? Meaning if my monthly costs are 1500. Should my rental income be at least 1800? 2000? 2500? to cover down the road costs etc...-Profits and taxes. Lets say I profit $500/month. How will taxes be paid on that? At the end of the year is I profit 6k. What will taxes on that cost me? In some cases am I better off investing back into the house to avoid paying taxes? Add a fence, paint the house etc...-Any good books/websites to check out?

I'll be in the minority, but an LLC is way down the list when starting. The bank won't let you put it in your LLC name (unless you're putting a lot down). It won't protect you from gross negligence. In states like mine you'll have to file a separate tax return and pay a fee each year. Umbrella insurance offers way more bang for the buck.Doesn't matter to the IRS on the second. Net income is the same. Why would you give the tenant keys to handle your repairs? You'll either be incentivizing them to find stuff that is worng to reduce theri rent or putting them in a position where they don't report repairs (referring to people who tell tenants they are responsible for first x amount of a repair...which can also be illegal). It's also your investment, you should determine the workmanship level.8-10% return is a good number. Don't include depreciation or principal.Taxes get really complicated. Depends if you are passive v. not passive investor, you're income, etc. You'll get to deduct depreciation for 27.5 years so unless you are putting a bunch down, this will be a tax loss. The amount of loss that's deductible v. carried over can depend on your income.Mike Anderson (if he's still around and Jeff Pasquino might be able to point to to good written resources.

This is all real good info.I would never put a tenant in charge of repairs. Get 2-3 repair guys that you like, and then have them bid against each other when you need something done.

 

[Gopher State]

make sure your insurance covers damages by renters, some policies put a special deductible up to 5000, stay away from those insurance companiesmake sure every renter provides you proof of renters insurance a policy number and name of agentyou can thank me later

 

[Steve Tasker]

Taxes get really complicated. Depends if you are passive v. not passive investor, you're income, etc. You'll get to deduct depreciation for 27.5 years so unless you are putting a bunch down, this will be a tax loss. The amount of loss that's deductible v. carried over can depend on your income.

The amount that you put down on the purchase won't impact your depreciation at all (you seem to be indicating this in your above post). If you buy a building for $200K, you're depreciating the $200K whether you put $10K or $100K down. It'll impact your monthly mortgage, of course, which could impact (1) your deductible interest expense or (2) your cash flow from the property. But it won't impact your depreciation.

 

[BassNBrew]

Taxes get really complicated. Depends if you are passive v. not passive investor, you're income, etc. You'll get to deduct depreciation for 27.5 years so unless you are putting a bunch down, this will be a tax loss. The amount of loss that's deductible v. carried over can depend on your income.

The amount that you put down on the purchase won't impact your depreciation at all (you seem to be indicating this in your above post). If you buy a building for $200K, you're depreciating the $200K whether you put $10K or $100K down. It'll impact your monthly mortgage, of course, which could impact (1) your deductible interest expense or (2) your cash flow from the property. But it won't impact your depreciation.

You worded it better than I did.1. You'll deduct depreciation.2. 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.

 

[comfortably numb]

I'm looking to get into the landlord business.I have some landlord experience with regards to dealing with tenants and day/day issues taking care of my moms house.I wanted to pick up a house to hold as a rental property with hopes of having a few long term.Some random and dumb questions if anyone has experience to offer.My credit is excellentI have no debtI have some down payment money, but would like to use as little as possible with such low rates-Should I open up a LLC?-If I rent at a discount to someone who is agreeing to maintain the property. Should I have them pay full rent and PAY OUT to them with a check for tax purposes? Or should i just say...your rent will be $200 less because you will do XYZ?-Is there a good basic realistic minimum that I should strive for to cover costs and make monthly profit? Meaning if my monthly costs are 1500. Should my rental income be at least 1800? 2000? 2500? to cover down the road costs etc...-Profits and taxes. Lets say I profit $500/month. How will taxes be paid on that? At the end of the year is I profit 6k. What will taxes on that cost me? In some cases am I better off investing back into the house to avoid paying taxes? Add a fence, paint the house etc...-Any good books/websites to check out?

I'll be in the minority, but an LLC is way down the list when starting. The bank won't let you put it in your LLC name (unless you're putting a lot down). It won't protect you from gross negligence. In states like mine you'll have to file a separate tax return and pay a fee each year. Umbrella insurance offers way more bang for the buck.Doesn't matter to the IRS on the second. Net income is the same. Why would you give the tenant keys to handle your repairs? You'll either be incentivizing them to find stuff that is worng to reduce theri rent or putting them in a position where they don't report repairs (referring to people who tell tenants they are responsible for first x amount of a repair...which can also be illegal). It's also your investment, you should determine the workmanship level.8-10% return is a good number. Don't include depreciation or principal.Taxes get really complicated. Depends if you are passive v. not passive investor, you're income, etc. You'll get to deduct depreciation for 27.5 years so unless you are putting a bunch down, this will be a tax loss. The amount of loss that's deductible v. carried over can depend on your income.Mike Anderson (if he's still around and Jeff Pasquino might be able to point to to good written resources.

This is all real good info.I would never put a tenant in charge of repairs. Get 2-3 repair guys that you like, and then have them bid against each other when you need something done.

Thanks for the info guys.I will reply back specifically later on.I didn't mean to hire the tenant to make repairs, but rather to pay tenant for lawn/snow removal. Take out trash. those type of things.A few places i have rented I ended up doing this for compensation.

 

[BassNBrew]

Thanks for the info guys.I will reply back specifically later on.I didn't mean to hire the tenant to make repairs, but rather to pay tenant for lawn/snow removal. Take out trash. those type of things.A few places i have rented I ended up doing this for compensation.

We write it into the lease that the tenant is responsible for this stuff on all single family detached (cutting, trim, pick up leaves, weed beds, and pest control). HOAs handle it on townhomes and condos, tenants still responsible for inferior pest control. Why pay for something you can get for free? I do have a couple of duplexes where we provide this to avoid stuff like the FFA thread where one guy shoves and the other guy is lazy.

 

[comfortably numb]

Thanks for the info guys.I will reply back specifically later on.I didn't mean to hire the tenant to make repairs, but rather to pay tenant for lawn/snow removal. Take out trash. those type of things.A few places i have rented I ended up doing this for compensation.

We write it into the lease that the tenant is responsible for this stuff on all single family detached (cutting, trim, pick up leaves, weed beds, and pest control). HOAs handle it on townhomes and condos, tenants still responsible for inferior pest control. Why pay for something you can get for free? I do have a couple of duplexes where we provide this to avoid stuff like the FFA thread where one guy shoves and the other guy is lazy.

That's interesting.I would be doing 2-3 family dwellings, but it would have not dawned on me to just write it into the lease

 

[KGB]

Hey guys. need some help here. Had to turn a house into rental and losing $$$ each month. (I knew it would be a small loss each month) Heres the issue. TAXES!

so lets say I charge $1000 month but pay $1200/ month.

My tax guy says I have to pay on the 12k a year (income) but cant deduct the loss. Im surprised I have to pay taxes on something I lose money on.

Do I need to get this into an LLC or something so I dont need to claim this so called profit anymore?

Im not sure if im asking the right questions, but there has to be a solution to this.

 

[Steve Tasker]

Hey guys. need some help here. Had to turn a house into rental and losing $$$ each month. (I knew it would be a small loss each month) Heres the issue. TAXES!so lets say I charge $1000 month but pay $1200/ month. My tax guy says I have to pay on the 12k a year (income) but cant deduct the loss. Im surprised I have to pay taxes on something I lose money on.Do I need to get this into an LLC or something so I dont need to claim this so called profit anymore?Im not sure if im asking the right questions, but there has to be a solution to this.

You should be able to deduct the expenses to offset the income. To the extent that your expenses exceed your revenue - using your numbers above = $2,400 (12000 - 14400) - assuming this is a run-of-the-mill passive activity for tax purposes - that loss would be subject to PAL rules. It would be able to be used to offset passive income (ie future rental income or other passive income).Again, assuming a normal passive activity, youwould have $0 of taxable income from the rental but would not be able to deduct the loss.So you wouldn't have to pay tax on anything, but you don't get any benefit from losing money in the current year. There are other rules that could affect you based on the particulars of your situation, but that should be the basic gist. I'm guessing something is getting lost in translation.

 

[Pick]

Just got an email from the management company. They went through the whole house we rent and took pictures inside and out. Kind of like a checkup. Really cool.

 

[modogg]

Has anyone dealt with asbestos siding? We're looking at a property that has the asbestos/cement siding, and that is really the only downside to this place. Never dealt with it before, only heard the awful rumblings about how expensive it is to remove (hazmat suits, respirators, etc) which I'm sure are horribly exaggerated.

I am sure this is a little past the time you needed the info, but i have a house with asbestos siding. The stuff holds up real well, and what you heard is kind of the only down side with it. But i have had 2 guys out to work on some of my siding that didn't charge me anything extra to work with. I think you call around a bit and you will find some general contractor to work with it for a good price. A few guys i have talked to have said that the asbestos in the shingles is not even close to being as bad for you as the stuff that used to be used in pipes. The guy who did the assessment of my house when i first got it said that you basically had to break off half of the shingles in the house and inhale any byproduct from where you broke it for it to hurt you. But to answer your question, if you are lucky like i have been you can find people to work with it for good prices, and it is a good siding product to have. the killer cost is if you ever decided to get rid of it and pyt something up. Guys i have spoke with said it probably wouldn't be too bad if you just chose to put something like aluminum siding over it, but if you wanted to remove the big costs are unavoidable because the guys removing it need to be certified, transporting it needs specific regulations, and the biggest one is for the contractor to find some place that will let you throw the shingles out there. So if you are planning on doing that, then yes, avoid it

 

[modogg]

So I am getting into renting out my current house. I have about 5-6 different people coming by at the beginning of next week to take a look at the place, what kind of info should i get from them? Do people get references? And do you usually make the potential rentors pay for the credit check or do you handle that? Any other good questions I should ask or information i should acquire? I am in a prime location for rentals, and a lot of it is college kids or kids jsut out of college who have a job now. I am hoping for the latter, and if i get stuck with the college kids i guess i should push for a co-signer for the lease?

thanks in advance for any and all advice

 

[Zegras11]

So I am getting into renting out my current house. I have about 5-6 different people coming by at the beginning of next week to take a look at the place, what kind of info should i get from them? Do people get references? And do you usually make the potential rentors pay for the credit check or do you handle that? Any other good questions I should ask or information i should acquire? I am in a prime location for rentals, and a lot of it is college kids or kids jsut out of college who have a job now. I am hoping for the latter, and if i get stuck with the college kids i guess i should push for a co-signer for the lease?

thanks in advance for any and all advice

GL with this!!

Make sure you see all 5-6 people before you make a decision.

You can google and get a credit app. You need SSN, DL, current job, boss, etc...

I'd make them pay for check.

If all kids, get a parent to sign also. Much more protection for you.

 

[modogg]

So I am getting into renting out my current house. I have about 5-6 different people coming by at the beginning of next week to take a look at the place, what kind of info should i get from them? Do people get references? And do you usually make the potential rentors pay for the credit check or do you handle that? Any other good questions I should ask or information i should acquire? I am in a prime location for rentals, and a lot of it is college kids or kids jsut out of college who have a job now. I am hoping for the latter, and if i get stuck with the college kids i guess i should push for a co-signer for the lease?

thanks in advance for any and all advice

GL with this!!

Make sure you see all 5-6 people before you make a decision.

You can google and get a credit app. You need SSN, DL, current job, boss, etc...

I'd make them pay for check.

If all kids, get a parent to sign also. Much more protection for you.

Thanks bud. So far, all college chicks, so I am going to do my best to avoid fallig into some trap with these young ladies. I am actually not renting it until July 1st, or around that date, so I have time to root through some potential candidates. The area is a hotbed for rentals, but the one con is that many of the lease agreements last only a year or 2. Not too many long term one's. And i would assume i am more lenient then some of the realtors around here, so i won't mind bothering them about getting parents to co-sign, that one does seem very reasonable and the way to go.

Any questions that you guys use that are good one's to throw at these lovely young ladies?

 

[Zegras11]

So I am getting into renting out my current house. I have about 5-6 different people coming by at the beginning of next week to take a look at the place, what kind of info should i get from them? Do people get references? And do you usually make the potential rentors pay for the credit check or do you handle that? Any other good questions I should ask or information i should acquire? I am in a prime location for rentals, and a lot of it is college kids or kids jsut out of college who have a job now. I am hoping for the latter, and if i get stuck with the college kids i guess i should push for a co-signer for the lease?

thanks in advance for any and all advice

GL with this!!

Make sure you see all 5-6 people before you make a decision.

You can google and get a credit app. You need SSN, DL, current job, boss, etc...

I'd make them pay for check.

If all kids, get a parent to sign also. Much more protection for you.

Thanks bud. So far, all college chicks, so I am going to do my best to avoid fallig into some trap with these young ladies. I am actually not renting it until July 1st, or around that date, so I have time to root through some potential candidates. The area is a hotbed for rentals, but the one con is that many of the lease agreements last only a year or 2. Not too many long term one's. And i would assume i am more lenient then some of the realtors around here, so i won't mind bothering them about getting parents to co-sign, that one does seem very reasonable and the way to go.

Any questions that you guys use that are good one's to throw at these lovely young ladies?

I've never seen more than a one year lease in my life. LOL. Do a one year with month to month after that. You will want an out if they are constantly late, etc...

If they don't have any credit, you MUST get a parent to co-sign. Many college kids don't have credit yet.

Ask them about rental history and get ref's