All Forum Posts by: Alan Pederson

I'm not overly concerned about credit scores from applicants. If they had good credit scores they would buy a house instead of renting. The first tenants that moved into my first rental had scores around 500. They have lived in that house for 3 years so far and only paid late once.

I thought about doing that but it makes me to nervous. Condo's don't appreciate in value like a single family home. How is it maintenance free? If you own it, aren't you responsible for maintaining it? If the roof goes bad, who pays for it?

I have a job that pays good (not great) and my wife is a teacher. We saved for 10 years before we bought our first rental. We try to cut expenses anywhere we can, we eat at home probably 6 days a week, I do all the maintenance, manage the properties myself, etc... We live in a modest home (1600 SF) and drive older vehicles. To make extra money I mow yards. I make more money than the people that hire me to mow their yards but they don't know that. I get to earn a few extra bucks and I get paid to workout. My goal this year is to pick up a few more yards to mow. My wife thinks I'm crazy but I see it as a way to pay for my gas and dinner out every week. Every little bit helps me get the next rental that much faster. Like Ryan said, this isn't a get rich quick business. I'm in this for the long haul. I work with so many people that say they can't save money. I guarantee you that every one of them have a cell phone and cable TV. Cutting those out would save you over $2,000 a year. These same people drive nice cars with equally nice car payments. We haven't had a car payment in 9 years. Cut back your spending in other areas and you could probably manage another couple thousand a year. If you do that for several years you will have tens of thousands in the bank that you can use to invest.

@Lynnette E., you are right on the mark with those comments. I was just thinking the same thing this past weekend while I was on my knees tearing out a glue down wood floor at one of my houses. I kept thinking where is the passive in passive investing? It sure feels like hard work to me. I'm sore all over and I only finished half of the floor removal so far. I have 3 rentals that I own and maintain, my own house to maintain, and my niece just bought a house and she thinks I'm her on call handyman. My step daughter is also looking to buy her first house and said, "if we need anything fixed i'm sure you'll take care of it for us". I still work my regular 40 hour a week job on graveyard shift and sleep is always a problem. The added stress of dealing with tenants and repairs is hard to manage some of the time. There is always some project that has to be done or planned for. Passive to me would be sitting in my boat fishing and receiving a check every month. I don't think that day will come for a long time, if ever.

I got into this knowing it would be hard work and that some day it would pay off because I would have more income to retire on. I'm still young (55) and strong enough to lift 80 lb bags of concrete and to spend weekends on my knees doing tile work so i'm thankful for what God has allowed me to do. This is not PASSIVE investing in any sense of the word. 

What part of Arlington was that house in? I've lived in this area for 40 years and I know it well enough to know where not to invest even when the numbers look good.

I like spreading things around. I invest in my employers 401k plan and they match 5%, my wife has a 403B plan for teachers that the school district doesn't match, we max our Roth out each year, and we put all extra money into real estate. I used to put 17% of my pay into my 401k but I realized several years ago that I can make more in real estate. I lowered my contribution to 6% so I would get the full employer match and the rest just goes in the bank until we have enough to buy the next property.

Talk to your landlord. He wouldn't need to give you an entirely new lease (up to him of course), he could simply fill out a form that lets him add to your lease. An addendum. In this case, the new rent amount. The refusal is kind of implied. If he wants to raise your rent, in most instances, he probably can and charge whatever he wants. You can either agree to pay the new amount or not. If not, you need to either find a new place to live or try to negotiate the amount of the rent increase so both of you come to an agreement. He doesn't have to negotiate but it doesn't hurt to try. I'm no lawyer and I don't know the laws where you live. Communication is very important, if you can work things out great. If not, it's time to pack.

He gave you notice of a rent increase which he can do if you're on a month to month. You may have had a one year lease to start with but does it change to a month to month after that first year? If so, then he can increase your rent anytime he wants if he gives you the proper notice. You do not have to agree to the new amount. Your options would be to move or try to negotiate what the rent increase will be. If you refuse, he can evict.

Remember that a fool and his money are soon parted. So be very careful who you partner with.

I agree with what Nathan said. I might also add a line to the lease that states that no modifications are to be made to the property without prior written consent.