All Forum Posts by: John A.

In addition to the great advice you will find on BiggerPockets, go to nolo.com and get the following books: 

Every Landlord's Tax Deduction Guide

And if you are landlording in California:

The California Landlord's Law Book: Rights & Responsibilities

The California Landlord's Law Book: Evictions

I highly recommend you start by reading "Every Landlord's Tax Deduction Guide" from Nolo.org.  This book will explain 99% of what you need to know.

I am retired military and rent to military tenants.  

The Pros to renting, in my mind, are:

1. As @Andy Robison stated, if you have a problem, call their chain of command.  You can require they give you their unit and unit's phone number on the application.  Be sure to call the number and verify the applicant is actually in that unit.

2. You can see how much their housing allowance (BAH) is and adjust rent increases based on BAH increases.

3.  You can register your properties with the post housing office.  The housing office will come out and do a walk through of your vacant properties and certify them as approved by them.

4.  Military tenants almost always know someone who is looking for a place to rent if you have multiple properties.

5.  If a military member runs into financial trouble, there are on-post agencies that can help them pay the bills.  For the Army, they are Army Emergency Relief, the Chaplain's office, and Army Community Service.

6.  Military members can usually get deposits for utilities waived by the utility companies.  That gives them more cash to pay your security deposit.

7.  Military members do not want evictions or court orderts on their records because it may cost them their security clearance, if they have one.

The Cons to renting:

1.  Junior military members may not be familiar with living on their own, away from home, and think your rental is the place to run wild.

2.  Most, if not all, leases require a military clause to let the military member out of the lease if they are deployed, assigned to another post, or moved into on-post housing.

3.  The Servicemembers Civil Relief Act can make it more complicated to evict or collect debt from a military member.  Screening is just as important with military members as with civilians.  Don't assume that because they wear the uniform, they are reliable and have good financial practices.

Your experience may vary.  But I prefer to rent to military, border patrol, and law enforcement.

@Anil Samuel, I wanted to do the same thing in AZ. So I created a management agreement between myself and my LLC for the LLC to manage my rental properties. The leases my tenants sign are with the LLC with me as the property manager.

I'm not a lawyer and cannot provide legal advice.  Nor have I had to evict a tenant under this situation.

Have you considered offering to reduce the purchase price by the amount of the repair cost?  That way, the tenant can go ahead and replace the siding himself, but it'll only cost you what the repair would cost.  

I think you can find a compromise if you're creative.  After all, replacing the siding would increase the value of the house.  I'd also consider offering to pay for the materials and let the tenant supply the labor, but keep the purchase price of the house the same.

@Holden Latimer

You're welcome.

Now that they are up and running, it's definitely worth your time to see how they operate so you can do the small maintenance and repairs that may come up during the summer.  Keep an eye out for water running off the roof.  A little water when the coolers are turned off after running is normal.  But, if it is always leaking water, you could have a stuck float valve.  Where I live, the water is very hard and the minerals build up in the valves.

If you want to save a little money, do the winterizing yourself and let the HVAC guy bring them back to life every summer.  Winterizing is very easy:  Drain the cooler, swap the cookie sheets, and disconnect/drain the supply line.

John

Working on the swamp coolers can be a do-it-yourself project if you don't mind the time it takes.  What I mean by that is - swamp coolers are simple to maintain, but you never know what is broke until you're on the roof and parts break all the time.  

Be prepared to replace the pads every other season.  Save yourself some time by measuring the pads the first time you service them and writing down the measurements.  I hate having to climb up on the roof just to measure the pads before I go to the home supply store.

If you have several swamp coolers, keep spare parts on hand to save you a trip to the home supply store.  Things like float valves, pumps and belts are always breaking.  And you usually won't discover something is broke until you've replaced the pads, turned on the water supply and attempt to turn on the cooler.

My last piece of advice is always drain the water supply line when you winterize the cooler.  If you only turn off the water, the water remaining in the line will freeze and burst the line.  Disconnect the line at the valve and drain the water out.

Oh yeah...don't forget to swap out the cookie sheets.  There are two: one for the cooler and one for the heater.  In the summer, remove the one from the cooler and install the one for the heater.  In the winter, remove the one from the heater and install the one for the cooler.

After spending most of your day on the roof, you'll probably just pay the $300.

Good luck,

John

@Tomas Calvino,  I was in the exact same situation about a year ago.  When the tenant renewed the lease, I told him I included the pet fee in the monthly rent (increased $50) so he wouldn't have to pay another large sum at renewal.  He seemed to appreciate it.  I don't think I'll use a one-time pet fee with any future tenants.  For me, the monthly rent increase is the way to go.

John

I'm not a fan of initial leases longer than one year.  I recommend a 6 month or 1 year lease initially to test your relationship with the tenant.  If things work out, you can renew the lease for another 2 years.  I did this with a tenant and it worked out well.  During the initial lease, I found out the tenant likes to pay the rent at the last minute (literally) and always forgets the web link for payment (even though it's in his lease).  So, at renewal time, I increased the rent to compensate me for the extra hassle.  He's happy.  I'm happy.

Would anyone consider putting a clause in lease that would automatically extend the lease for a second year if there were no late payments during the first 12 months?

John

@Trent Driver

Welcome to Bigger Pockets!  I'm just down the street from you in Sierra Vista.  Hopefully we can exchange some knowledge.

John