All Forum Posts by: Richard F.

Your market may vary, but...

Before you advertise you should already have a good idea of the market, and you can watch ads for a while to see how many weeks they are repeated to get an idea of how long you can expect.

If you price appropriately, you will get response. Now you have to learn how to "read" that response. If you get no calls, no views, you are likely too high or there are other issues. If you are swamped with calls, you priced too low. I would say over the long term, on average, you will talk to 10-12 people in order to actually show to 4 or 5 prospects, and get 1-2 good quality applications; 7-10 days would be an average vacancy period, assuming minimal change of occupancy maintenance.

It really is dependent on your local market, and the specific unit, as I have had MANY same day COO, and MANY six weeks or more, not counting actual repair time. Your writing style for ads can make a difference; your phone and/or in person presentation will have an effect. The time of year and weather matters. Even what part of the month you are in will affect the response.

Typically, if a given unit is "average" and I don't get people inside to view within 2 weeks, I'll drop price a bit. If, OTOH, I get lots of tire kickers, but no bites, I'll hold the price and address any issues that have come to light as objections.

I am of the opinion that a given property has a certain value, and I will not undercut that value just to get a tenant. I realize that investors often feel (and, correctly) that a day of lost rent can never be earned again. I have observed however, that the quality of the tenant is more important than a few days rent, and much more valuable in the long run. I'm willing to wait.

Another factor, I do not show properties while occupied (unless the tenant is breaking their lease, and has authorized me to show), in fact, I rarely will show a unit that is NOT in move-in condition. Most people can not "see through the dirt", so you lose potential good prospects, and waste a lot of time. Besides, it is just not a good idea from a liability standpoint to be in an occupied unit with strangers.

I DO start advertising before it is vacated, and schedule showings for the day after it is scheduled to be vacant. If you have digital pics, you can easily package a simple PowerPoint presentation to email prospects. You can also save yourself a lot of wasted time by "pre-qualifying" EVERY prospect on the phone. This has the added advantage of providing supporting documentation of your administration of the Fair Housing laws.

Such as V2 flats?

Well, too late for the OP, but hopefully someone else may benefit-

Before scraping off the "popcorn", you need to consider that in most areas, housing built as late as 1983 (no, 1978 is not the cutoff) there is a very good chance the "popcorn" contains asbestos.

Handle accordingly.

IF we are speaking about a residential rental...my presumption is long-term holding. There are several factors that influence your actual ROI when discussing improvements. VALUE is more important than some arbitrary "payback" period based on mere dollars. A three year payback is no consolation if you have to replace the item in four or five years. A three year payback on a job that ensures only minimal maintenance or repairs for ten years has VALUE. It has additional value if it is perceived as adding value in the eyes of typical prospective tenants.

While dishwashers and laundry equipment certainly add value, you really need to think these through. A dishwasher is pretty easy to add, and they are relatively trouble free. (Just be sure to inspect periodically to ensure the connection at the fill valve is not dripping and destroying your subflooring)

A washer/dryer combo OTOH, will require either gas or some heavy electrical service routed to the installation point. The bigger concern however, is the potential for damage when the washer malfunctions. They hold a LOT of water, and water runs downhill! All the way down. Could be a problem. I'd opt for a ground floor launderette that will minimize potential problems. Especially true if tenants electric and water are not individually metered. Tenants have a bad habit of buying cheap, heavy, stuff, and leaving it behind, now you have another headache!

Many "improvements" have zero added value, but will reduce operational expenses by eliminating or reducing piecemeal repairs and costly, inefficient, service calls.

I always TRY to offer units that will attract the top 10% of the tenant pool for the price range... you get top rent, fewer headaches, less turnover, and lower overall operating expenses.

As regards commercial property--typically this is NET NET NET and improvements are not an issue, other than negotiated TI's for a new tenant.

Your market may vary, but unless you have at least 12 units and the ability to install in a secure location, I would not buy machines. Maytag or other vendors will lease the equipment to you for no out of pocket. I have had them run gas and water line extensions to connect, and it's usually easy to get a $500-$1000 up front "decorating" incentive from them to organize and spiff up the area you plan to install (by signing a 5 or 10 year contract). They handle all maintenance, at no cost. Some companies let you pull the coins and just charge a flat $25 per month per machine, some will collect and split usually 50/50. They will provide signage (including THEIR phone number for service complaints) They will recommend a price to set, but ultimately it is usually up to you. The more units, and people, the more income. Typically figure 1 1/4 loads per person, per week. I have locations where the neighbors come over and use ours. THANKS! (I put in soda vending machines next to those!) You may need to put the electrical circuits on timers to prevent late night usage and noise complaints. If you want to monitor the exact cost, you can sub-meter the circuit.

One poster mentioned used equipment...

Unless you are personally able to fully diagnose and make repairs, or if the building is really low end, NEVER buy a used appliance (two or three service calls and you've spent the cost of new, which will last at least seven years). (There are actually companies that lease coin op machines that are used, under similar terms as above but shorter, even monthly, contracts, which is perfectly ok)

Again, your market may vary, but this IS the 21st century. The tenants I want expect basic conveniences on site.

MikeOH, to a certain extent I agree about the issue being overblown. Mold is nothing new, and many would argue we essentially grew from mold. It is a sad fact however, that the (and I use the term loosley) "Justice System" operates in a fashion that enables frequently unscrupulous folk to take advantage of others. As a result, the prudent investor WILL take steps to mitigate the issue. The trick is learning what is necessary, what offers good value, and then taking reasonable and appropriate action.

You have to take steps to prevent, and if you are aware of a problem as the OP, you do NOT want to just hide it. You also need to be careful, and document properly, once tenants are involved.

To clarify my earlier post, the expenditures were for the water cleanup and quick drying, to PREVENT the growth of mold. The expenditures equaled 2 - 3 months rent for those particular properties.

I actually had another property where the tenant was complaining of "mold" issues. I had an Air Quality test performed, and low and behold-- the most prevalent particulate was canine dander. From the tenant's unauthorized dog.

A question was raised about ozone treatments. Google epa ozone and you will find an article that sheds interesting light (pun intended) on that...

Whenever liability is in question, consider this:
Who has assets to attach- the tenant or the landlord? If one of those kids gets injured, say, playing on a swing outside, who do you think is more likely to get sued?
Playgrounds now have pretty specific requirements for the equipment and playing surface. Even if you are talking infants, what if one crawls off of a stair way, or eats leadbased paint chips? The list goes on...
Add to that zoning issues. Additional traffic delivering and picking up kids might not sit well with neighbors. What if 2-3 kids turns into 8-10?
How many of them will be running rampant with crayons?
(big shudder)

Everything seems normal, but when I click on "submit", it went to the login screen, instead of the normal repost/jump to forum screen. Both times it was after maybe an hour on the compose page.

I didn't even switch between programs...there were no other indicators on this end of a lost connection, several browser tabs appear to be acting normal. No viruses, I'm on Ubuntu Linux. I have not had this problem before either.

If your side doesn't kick out inactive users, then I'll just have to watch a little closer and figure it out. And shorten my posts... :lol:

That's twice I spent too long composing a post and got logged out, losing everything I wrote!

This is not an issue to be taken lightly. There are numerous types of mold, but only a professional can tell you what you have. Some are deadly to some people.

The OP states that it appeared that water sat for some period of time. If that is the case, drywall and most other materials act as a "wick" and pull the moisture up into the material. This means the drywall is wet on the back side also, in the wall cavity, and the mold will run rampant with proper conditions. The only way to remove it is cut out the drywall.

I have experienced two catastrophic (clean water) floods in the past year. The cleanup, dryout, and repair costs were 18K and 24K. A Pro water cleanup crew will have an infra red camera that allows you to actually see where the water travels up the joints and internally...very interesting. Periodic checks clearly show the drying action over days.

Big surprise, the insurance company canceled coverage when renewal came up on one of the policies. (one was due to a burst washer hose, the other a stuck toilet fill valve--another case for systematic, PREVENTATIVE maintenance). At present, in our market, ins cos don't want any liability for potential mold issues, so any water damage claim is a trigger. The agent actually recommends self insuring for those losses rather than making a claim.

The trouble with a parsimonious DIY approach, is that if you don't remove all of the mold, sensitive people will still be affected. If they are a tenant, they will typically go to a doctor for their symptoms. When the Doc says "it's mold", the tenant sees $$$. Now you have a big problem. Now you have to have a lab take air samples and test them, AND still make proper repairs by removing any affected materials, and treating exposed areas. Then you have to test again. Much cheaper, as always, to do it right the first time (while the unit is vacant). You should still get the air quality tested before and after repairs to be sure, and so that you have a record that there is no issue at that point in time. A series runs around $500 here.

OTOH, simple surface mold as found in bathrooms or under eaves can frequently be successfully treated with clorox or tsp and a quality sealcoat with an anti-mold additive.