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Well, I see your collective points. I still want to do something nice, because when I was a renter those little touches did have an effect, but I'll take it down a notch.
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Nov 19, 2017 00:10
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baquerd posted:Well, I see your collective points. I still want to do something nice, because when I was a renter those little touches did have an effect, but I'll take it down a notch. You’re nuts if you’re talking about anything more than treating them to a coffee and pastry at a coffee shop while you review and sign the lease at the very beginning of the relationship. I can’t understand taking an established tenant out to a meal unless you live next door and have to share common spaces like a backyard, and so have become friendly neighbors. You think treating them and socializing will endear you to them so they pay rent and report issues on a timely basis? It could just as easily lead them to believe you’d be more permissive with damage or late payments. Even if you do live next door, it may be beneficial to represent yourself as just a property manager and/or say you have bosses or partners that you have to check with and answer to when concerns arise. There are better ways of reminding tenants of your attentiveness to your properties and renters. Put together a regular newsletter with events like farmers markets, fairs/bazaars, local cultural events, local sports teams, neighborhood association meetings, etc. List the contact info for utilities, telecoms, municipal emergency and non-emergency services. Toss in reminders like: “A running toilet could cost you hundreds of gallons on your water bill,” “Clogged dryer lint filters a leading cause of house fires,” “Do you know where your fire extinguisher is and how to use it? PASS (acronym),” “Check and replace fire alarm batteries on daylight savings,” “Run your exhaust fans after showering and cooking to prevent dampness and odors,” where the water shut off is if you notice a flood or leak, what to do if you small gas, how to remove hair from a clogged drain trap, etc. Include a blank maintenance request form that lists your contact info, reminding them to notify you immediately of any leaks or damage. Scheduling regular inspections would be pretty intrusive, but would certainly remind them you’re vigilant about maintenance. You could do more irregular inspections with shorter notice, under the guise of things like building winterization, seasonal boiler cleaning or touching up paint/caulking.
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Nov 19, 2017 01:38
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poopinmymouth posted:. That's because the vast majority of rental properties are owned by a relatively small number of slumlords.
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Nov 19, 2017 03:13
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goku chewbacca posted:You’re nuts if you’re talking about anything more than treating them to a coffee and pastry at a coffee shop while you review and sign the lease at the very beginning of the relationship. I agree with most of this post except the bolded part. You don't have to volunteer information, but don't misrepresent yourself if you're directly asked who you are in relationship to the property. In the event things go rotten, you may be able to get rid of your tenants, but your other neighbors have long memories and can sink your future tenant searches really quick.
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Nov 19, 2017 14:00
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I've got a full time maintenance guy. Kind of thinking of letting him go because of reasons. I really don't want to hire and train someone new. Anyone using subcontractors or handyman services for all their maintenance and turning new vacancies around for the next tenant? How's that work out?
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Nov 21, 2017 19:23
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So I have a tenant in my guest house(fully detached 1 bedroom, with laundry etc). Currently rent is 850 with all utilities included. The tenant was on a 4 month contract because she was unsure if her contract was going to be renewed. On 12/1, we dropped it to a month to month contract as she was unsure if she was staying or going. She asked for me to drop it to 700$ a month and go month to month. I told her that I might drop it if she signs a lease for a year, but at that point we left it month to month. Today 12/6 she comes saying she'll sign a 1 year lease for 650$ a month. Frankly asking for a ~25% discount is insane in my book for a longer-term lease. She isn't home a lot, and I'll admit doesn't cause a much higher electric bill, but her stuff is always there, so I don't think that should matter. I'm happy to give her a small break, but not such a hefty one. How should I approach this?
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Dec 7, 2017 00:05
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lord1234 posted:So I have a tenant in my guest house(fully detached 1 bedroom, with laundry etc). Currently rent is 850 with all utilities included. The tenant was on a 4 month contract because she was unsure if her contract was going to be renewed. Is she a good tenant? Does she always pay her rent on time? What does $650 a month do to your numbers? 100% occupancy in the unit for a year is nice, but how is the market? Do you think you'd be able to get another tenant approved and moved in within 2 months? If so, you've already saved yourself the difference. Your mistake was letting her signal 700 as a reasonable number in her month to month renegotiation. Your opportunity was to say you'd be willing to take another year of lease at $800 or $750.
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Dec 7, 2017 00:19
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EAT FASTER!!!!!! posted:Is she a good tenant? Does she always pay her rent on time? What does $650 a month do to your numbers? 100% occupancy in the unit for a year is nice, but how is the market? Do you think you'd be able to get another tenant approved and moved in within 2 months? If so, you've already saved yourself the difference. Your mistake was letting her signal 700 as a reasonable number in her month to month renegotiation. Your opportunity was to say you'd be willing to take another year of lease at $800 or $750. A 2400$ loss wouldn't be great. My numbers are still in pretty good shape, but I wouldn't be happy. I'll counter her at 750...if she leaves, I'm not super upset, but she is a great tenant who always pays her rent on time.
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Dec 7, 2017 00:28
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They would have to be a loving outstanding tenant and come over and bake me cookies for me to entertain a rent negotiation downward after they declined an annual renewal and went month-to-month. I do not allow tenants to remain month-to-month. Is your rent basically fair? Is there anything about your local real state market that would suggest that there is downward pressure on rents?
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Dec 7, 2017 01:13
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lord1234 posted:So I have a tenant in my guest house(fully detached 1 bedroom, with laundry etc). Currently rent is 850 with all utilities included. The tenant was on a 4 month contract because she was unsure if her contract was going to be renewed. Wait...I'm used to seeing month-to-month rent INCREASE to make up for the fact that the person is about to bail. I may be wrong, but it seems like she realized she had a great deal on her hands and looks at renting at all as doing you a favor.
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Dec 7, 2017 01:24
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Coming from the tenant's perspective: goku chewbacca posted:You’re nuts if you’re talking about anything more than treating them to a coffee and pastry at a coffee shop while you review and sign the lease at the very beginning of the relationship. I bolded the part that I think is most relevant. I like this post, though I could see some of those measures coming off a little passive-agressive depending on the relationship and people involved. I know it's unusual in the US, but here in Australia/NZ apartment inspections are a regular fact of life. I am actually friends with my landlord (I knew him well before I started renting from him) so him coming over for beers/dinner kinda serves as that. It was really annoying at my last place though; having to have everything absolutely Parents-Coming-To-Visit-Spotless for the real estate people, coordinate my schedule around them coming to visit, etc. It felt like being a child. Also, seconding balancedbias that if a tenant was going month-to-month, I'd expect an increase in rent to cover potential uncertainty on your part about having the unit vacant if she dips. I mean, as a renter I'd welcome it staying the same, but I understand that it offers no advantage to the landlord unless I was the World's Greatest Tenant (which I mean I am, but still). You're probably negotiating from a position of strength as a landlord unless your place is a turd* or there's a glut of rentals; moving is a huge pain in the arse and probably costs a fair bit; even if you get friends and somebody with a truck/van that costs you social capital, and you're dealing with utility cancellations/transfer, forwarding mail, etc. *That's why I moved; landlords raised the rent by the max they could, but hadn't made any improvements (the place was really dated and previous tenants' pets had completely destroyed the carpets). We got a far nicer place through my friend for the same rent as they wanted for their shitbox.
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Dec 7, 2017 03:36
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lord1234 posted:A 2400$ loss wouldn't be great. My numbers are still in pretty good shape, but I wouldn't be happy. I'll counter her at 750...if she leaves, I'm not super upset, but she is a great tenant who always pays her rent on time. You're generous. I went month to month after 2 years of on time rental payments for the same price (1050$/mo) as my original lease and as a good tenant I considered that a win.
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Dec 13, 2017 00:36
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My parents live in Europe. They invested in some real estate development project in the city they live in about 5 years ago, and it just finished building in November. My dad is anxious to start recouping his investment, and wants to rent out the units right away. Normally I would be all for this, but there are two caveats:
Based on these, the dilemma is whether to rent out the two units now, or wait until next year when they become more valuable after the shopping center and hospital finish construction. Current offers for both units are around $1,000/mo. Renting them out now would "lock in" my parents to that tenant basically, and they would be unable to increase rent in proportion to any value increase in the property. However, waiting until next year would mean lost income, plus all the various bills (e.g. HOA fees) they are currently having to pay. What makes the most sense in this type of situation? Is there a "best practice" approach?
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Dec 14, 2017 17:30
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I assume that when a tenant moves out, you're then able to set the rent however you want, or are you still limited in rent increases? If it resets when you get a new tenant, I'd look at what you expect the rent to be in a year vs how long on average a tenant would lease the unit, and try and figure out an estimate break even date. If you can rent it next year for $1500 and a tenant is likely to stay for 10 years, then it makes sense to wait. If you can rent it out for $1050 in a year and tenants only stay for 2 years then just do it now. (Average length of tenancy) x $1000 vs (Average length of tenancy - 12 months) x expected rent.
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Dec 14, 2017 20:13
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FISHMANPET posted:I assume that when a tenant moves out, you're then able to set the rent however you want, or are you still limited in rent increases? Yeah, I thought about this. It's a bit tricky because this is a brand new apartment building so we have no data on average length of tenancy. But we'll check if we can find it out for neighboring buildings.
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Dec 14, 2017 20:35
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A tenant might be more likely to stay if the rent is below market once the neighborhood is completed.
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Dec 15, 2017 01:55
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ohgodwhat posted:A tenant might be more likely to stay if the rent is below market once the neighborhood is completed. Yeah, that is the concern.
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Dec 15, 2017 02:07
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enraged_camel posted:Yeah, I thought about this. It's a bit tricky because this is a brand new apartment building so we have no data on average length of tenancy. But we'll check if we can find it out for neighboring buildings. Are there ways to raise rent above inflation by improving the property? Could you store the dishwasher and washer/dryer somewhere else and then 'renovate' the unit by installing them later to increase the rent or trigger a rent increase event in some way like that? The anticipated rent increase is going to be the driver here, if your marginal rent projected out to your expected tenancy is more than your lost rent for keeping it vacant (both discounted at your parents' cost of capital). Average rental tenure could be pretty hard to find, and your small sample size is going to increase volatility. What do sublease rights look like there, could the tenant hold onto the place and sublease it as a sandwich leasehold if rents go really crazy? Other owners in the building may be making similar calculations and could be good people to bounce ideas off of if there is a chance to talk to them.
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Dec 15, 2017 02:44
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crazypeltast52 posted:Are there ways to raise rent above inflation by improving the property? I condensed the last response because these two pieces are absolutely integrated. You will want to find out what other owners are doing, and (if they can) have some sort of consistency in the building. Deals like this can really go sideways if you end up with a couple of underpriced cheapo units in a semi-lux building, or vice versa.
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Dec 17, 2017 01:41
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About to close on my first rental. Guessing I probably have a month or two before all the tenants skip rent, wreck the place, sue me, and invite their family over to slip on the common ground and horribly injure themselves.
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Jan 12, 2018 01:01
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baquerd posted:About to close on my first rental. Guessing I probably have a month or two before all the tenants skip rent, wreck the place, sue me, and invite their family over to slip on the common ground and horribly injure themselves. Know your state eviction and landlord-tenant laws like the back your hand, have an attorney's number on hand if you've never done it before, screen your tenants and verify income, and for the love of god buy umbrella insurance so you don't have to worry about the last one.
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Jan 12, 2018 02:22
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My tenant of two years is breaking lease early to buy a house. Because they are breaking early, they are paying rent until we fill the vacancy and paying the new lease fee to my management company. This person has been an excellent tenant so I’m sad to lose them, but what a fortunate way for their lease to end.
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Jan 13, 2018 04:43
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BEHOLD: MY CAPE posted:Know your state eviction and landlord-tenant laws like the back your hand, have an attorney's number on hand if you've never done it before, screen your tenants and verify income, and for the love of god buy umbrella insurance so you don't have to worry about the last one. 5 million in umbrella coverage, it's going to take some serious negligence to break that I'm hoping.
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Jan 16, 2018 18:27
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Question about capital gains on selling a rental. I moved out of my condo in July 2015. I had a tenant move in, in February 2016. From my google skills, it seems that in order to sell a property and not pay capital gains on the price increase since then, I have to have lived in it 2 of the previous 5 years. Which seems to indicate that, in order to not pay cap gains, I need to sell (I won't be moving back in) by July 2018. Or else pay a buttload of taxes. Does this sound correct?
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Mar 27, 2018 17:05
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Henrik Zetterberg posted:Question about capital gains on selling a rental. No, unless you move back into the house you cannot exclude it from capital gains on a sale. Capital gains exclusion only applies to your principal residence at the time of sale. There is no trick to moving out of a property, renting it, then selling it three years later and excluding capital gains. You can however use something called a 1031 exchange to avoid capital gains tax if you replace it with another rental property. If you take the cash and walk, you will pay capital gains on the sale price, minus your transaction expenses, minus your cost basis.
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Mar 27, 2018 17:35
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I'm seeing conflicting info from various sites, such as: http://homeguides.sfgate.com/figure-capital-gains-tax-real-estate-7332.html https://www.investopedia.com/ask/answers/06/capitalgainhomesale.asp quote:the two-year residency requirement does not need to be fulfilled in consecutive years. For example, suppose that you invest in a new condo. You live in it for the first year, rent the home for the next three years and, when the tenants move out, you move back in for another year. At the end of this five-year period, you will be able to sell your condo without having to pay capital gains tax. Until July of this year, I have satisfied the condition of living in the condo as my primary residence for 2 of the past 5 years, even though it's been ~2.5ish years since I've lived there.
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Mar 27, 2018 19:25
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You are misunderstanding the requirement that the home be your primary residence at the time of the sale. In other words you will have to move back into it and live there (as in the example you have quoted) long enough to pass an IRS smell test, for example receiving your mail and utility bills and commuting to your place of work from that location, in order to satisfy the criteria for capital gains exclusion. The two-year residency requirement does not have to be continuous but does have to include the date of sale.
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Mar 27, 2018 20:42
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Ahhh, I see. That makes sense. Thanks!
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Mar 27, 2018 20:43
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There is no requirement for this to be your principal residence at the time of your sale. Just that you owned the home for 2 years out of the previous 5, and you used the home as your principal residence for 2 years out of the previous 5. https://www.irs.gov/taxtopics/tc701
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Mar 28, 2018 17:47
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lampey posted:There is no requirement for this to be your principal residence at the time of your sale. Just that you owned the home for 2 years out of the previous 5, and you used the home as your principal residence for 2 years out of the previous 5. https://www.irs.gov/taxtopics/tc701 I read up about this and I think you are right. Even though the IRS Publications on the subject go to some lengths to state that the exclusion applies specifically to your main home and the IRS definition of a main home would seem to make it quite difficult for it to function as a rental property, the further materials on the ownership test and use test for the capital gains exclusion seem to provide examples to the contrary. There are some complications to selling a property that has been used as a rental, most importantly depreciation recapture.
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Mar 29, 2018 20:54
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Housing authority is cancelling section 8 on a unit with total rent $300 below market because of a $20 requested increase in rent. Since the tenant signed a lease renewal to trigger the rent review by the HA, does this mean it's eviction time if they can't pay? Seems like a long term win since the unit is so far under market, but wow that tenant is getting hosed hard by the HA.
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Apr 20, 2018 01:20
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Happy I found a tenant who signed a 2year lease. Hope he doesn't ruin the house... What screening do you do beyond felony and credit checks?
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Apr 28, 2018 19:22
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I don't even do credit checks, I've found looking at their court cases and verifying their income, job, and references is good enough and that the credit checks don't add anything. That might just be in my local market, though.
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Apr 28, 2018 19:59
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I have 3 friends renting rooms in my 5 bedroom house. I also live in the house. I would joke about being a slumlord but I'm loving retarded and didn't realize this actually does technically makes me a landlord. (long story short, I suddenly inherited a house I didn't know what to do with and have been doing the best I can with it.) It is definitley a fixer upper. Are the rules and laws going to be different for me since I also live here? How hosed am I that I never did anything, like, official? I just started making receipts with some online template so I have something for tax time. Mortgage will be paid off within the year. I have a lawyer and should probably ask him these questions but I figure I might as well ask the internet first. I'm admittedly an insane person and just kind of pretend I know what the gently caress I'm doing most of the time. I don't understand how it has gotten me this far but it has.
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May 25, 2018 02:03
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The State of Minnesota requires that you provide your tenants with a Certificate of Rent Paid so they can deduct the statutory portion of property taxes from their taxes. Your state may have something similar, so talking to a local lawyer on landlord tenant law is a good idea for the licensing requirements of your city and state. Insurance may be different, so that would be a good thing to verify as well. A tax accountant may be able to help you determine if you can depreciate the house against your taxes and or deduct some maintenance expenses too.
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May 25, 2018 02:16
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lord1234 posted:Happy I found a tenant who signed a 2year lease. Hope he doesn't ruin the house... What screening do you do beyond felony and credit checks? I would get a reference from their previous landlords. And a letter from their work stating their salary
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May 27, 2018 08:06
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Henrik Zetterberg posted:Question about capital gains on selling a rental. We're planning on doing this with my girlfriend's house that was turned into a rental in January 2018. Yes that is right, and it is 24 months out of the past 5 years, so no rounding, and you won't owe any capital gains. You may have some flexibility for later than July depending what you did after you moved out of the condo, considering you didn't rent it until February? Not sure of the exact circumstances if there's any wiggle room there, you'd have to figure that out! I believe it is also correct that you should be depreciating it now that it is a rental, so you will owe money on any of that depreciation when you sell, I believe. A buttload of taxes depends on how much the home has appreciated and how much money you've put into the condo in terms of major updates, etc. Also, on your tax bracket when you sell.
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May 27, 2018 22:47
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Arkane posted:Looking at buying a vacation rental property in Orlando, Florida that I would personally use for about 2 weeks of the year, and more if necessary (my parents live about 20 minutes from where I am looking). Trip report: closed on this vacation rental unit in Orlando in March of 2017, still own it, and am looking into buying a second unit if I can find a good deal. Started renting it on April 1st 2017 through a management company, and haven't stayed it in a single day myself lol, but that is really because it is renting so well. That will change in time, as me and gf staying upstairs in my parent's house on trips there is not long-term ideal! But for now, why ding the income?! The bolded turned out to be a huge problem, as Citibank got me through the process until the underwriter (with not much time left) red flagged the property as a condo/hotel because the company advertises the property online. In the year+ since, I've found that this is a somewhat debatable ruling because the county classifies them as single-family homes, but many underwriters see them as condos, either way it is definitely true that the management company operates it akin to a hotel...there might be a couple of lenders that I could've worked with if I had known the condo/hotel thing was coming. Lesson learned. Anyway, instead of going to a boutique lender with usurious rates in order to close on time, I put a lot more cash down than I planned and my parents gave me a mortgage for $100k at 4%, which was the market rate. Actually ended up working well for both of us, because they're making money at a nice rate (they probably had it in a money market fund!), and my money is going to a family member instead of a bank. But it was a mini-crisis at the time, and they thankfully helped me out. Purchase price $192,500 for a 3 BR in a guard gated vacation rental community (with some full-time owners) about 3 miles from Disney Cash down: $96,900 (including closing costs), Mortgage: $100k Occupancy: 341 days out of 395 Rental Income: $44,372 ($130 a night on average) 13 months of net income after all fees + mortgage interest: $9489 $1911 is principal repayment, so net cash flow of $7578. For the first 12 months, ended up being about a 9% return including principal repayment, so I can't say that I am unhappy, and that ended up being tax-free in year 1 due to the closing costs/depreciation being narrowly higher than the profit. I'm looking into buying another one if the opportunity presents itself, but I'm gonna be stingy and try to get a great deal. One of the things that is vexing me, and doubly so because I don't live in Orlando, is that there are just SO MANY of these vacation rental units being built, and realtors will give you all different answers for which ones are the "best." There's also an incredible amount of inventory online, which is both a warning that many of these people that buy vacation rental units don't keep them long-term (either because they're underperforming or need the cash), and also the vast inventory makes shopping remote very, very difficult. I also get the feeling if there is a downturn in the economy, the market could just be flooded with these units and pricing going down with it. But, weighing against that is the growth of both Disney and Universal. Seems inevitable that a downturn would only be a blip, and this region will be strong for a very, very long time. So while normally I'd be a bit sensitive to owning two units in the same city, the location really can't be beat for travelers needing accommodation.
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May 27, 2018 23:48
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Arkane posted:Trip report Thanks for posting this! Very informative. I assume these are very short tern rentals being that it's near Disney. Any issues with tenants at all and if so what are your thoughts on how the property management company handled it?
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May 28, 2018 21:58
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Sand Monster posted:Thanks for posting this! Very informative. I assume these are very short tern rentals being that it's near Disney. Any issues with tenants at all and if so what are your thoughts on how the property management company handled it? Yeah, all less than 30 days...management is a UK-facing company, so I imagine quite a few are Brits there for a couple week holiday. 0 problems as yet, just a couple misc things like AC repair. I interviewed a few other management companies earlier this year (I signed on with current guys for 1 year) just to make sure I was maximizing everything, and other companies could significantly lower stuff like cleaning costs and front desk fees, but the trade-off is I'd likely see my absurdly good occupancy numbers fall and likely my nightly rates, and I decided it wasn't worth it, probably woulda been about equal in the end. Biggest worry so far was a plan to build a touristy race track adjacent to the property, which would've been super loud. HOA hired a lawyer and we successfully fought it, now looking like sports fields will be out there, which should wind up benefitting us!
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May 28, 2018 23:19
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