All Forum Posts by: Austin Irwin

Thanks to everyone who lent some insight to my question above.  I will take it all into consideration.  Thanks again!

Good afternoon BP community!

I'm having a bit of an issue that I am hoping someone can weigh in on (the property is in PA if that helps). I have two tenants in a SFH who are about 4 months from the end of their lease. I will not allow them to re-sign or go month to month based on continued late payment and a police calls to the property. I am just trying to get through the next 4 months without beginning eviction proceedings.

This weekend, apparently their was a domestic dispute that involved one of the tenants pushing his way through a locked bedroom door which, according to the police report, caused damage to the door, jamb, and some drywall.  I will be inspecting the property tomorrow evening to get the full scope of the damages.  Regarding repairs to the home, if I have the damages repaired immediately, am I able to bill the tenants directly for the repairs?  Or do I need to wait until the vacate the property in August and then take it out of their security deposit.

My concern is that if I do not have the ability to make them pay asap, that I will be shortchanged.  Based on the history of these tenants, I believe that when I tell them that the lease will not be renewed, they will cease paying rent.  Their security deposit will not be enough to cover their last month's rent as well as the damages to the property.

Any insights or advice?

Thanks,

Austin

Thank you all for your insights on this topic!

Thanks, David. I appreciate the insights, especially regarding CapEx. Your comments around it made me realize that I should probably do a little more analysis around the life span of certain systems that are installed!

 Thanks for the reply, Taylor!

Hello BP community,

I was hoping for some insight regarding budgeting for maintenance, capex, and vacancy for a SFH in Shippensburg, PA. This is my first rental, so I am a newbie. I have read that a popular rule is 5-5-5% of gross rent or something similar.

To give a little background, this is my former primary residence of five years.  The house rents for $1,300.  The market value is around ~180k but this is due to appreciation, not my purchase price five years ago.  The home is very basic: electric baseboard heat, no a/c, not many bells and whistles that will need to be maintained.  During my residence there, I took care of many capital/improvement related expenses such as new roof, new garage doors, etc.   Even without being able to look in a crystal ball, I can reasonably foresee that my only anticipated expenses in the near term will be wear and tear from tenants, appliance replacements, and a well pump eventually.

So my questions to all of you with much more experience than I are as follows:

1.  Would you see this 5-5-5% of gross monthly rent being adequate for upkeep and vacancy on the property?

2.  Without trying to overcomplicate things, for bookkeeping purposes do you continuously allocate these funds to these three buckets regardless of whether you ever need to tap into these funds?  For example, let's say I can go three years without a vacancy.  Do you still continue to allocate the 5% to the vacancy bucket every month because you know that eventually you will need to tap into it?  I can keep allocating if it would be prudent, but I don't want to tie up capital that I could redeploy elsewhere.

Thanks in advance for any insight!

Thanks Logan.  Appreciate the insight sir!

Hello BP community. I close on a new SFH for my primary residence in less than a month. My current SFH will become a rental. I anticipate it being ready on February 1st. My realtor has another client that will need temporary housing (2-3 months). She has mentioned to me that it may be mutually beneficial to rent to her other client for a few months until winter breaks and more prospective tenants will be moving (I live in PA).

Does anyone have any thoughts on this?  Should I be asking any premium since I will not have the stability of a one year lease?  Thanks everyone!

@Robert Fountain could you recommend any areas of town to target for good cash flow/low equity rentals?  My wife and I toured several homes around Burhans on the west side of town yesterday and were left unimpressed.  Thanks.