All Forum Posts by: Chris Hughes

My idea was to wait until they informed me that they would not be renewing their lease (I’m assuming they won’t be).  And then once they move out return the remainder of their deposit with a letter citing damages and the sections of the lease they violated along with receipts.

Hey all!  Been a while since I posted on here but I did have a quick question...

My tenant has neglected some routine maintenance on the home I rent to them (has not been changing the A/C filter) and this has directly contributed to repair costs on the A/C unit.  Granted the unit is older, but from all accounts it is running fine.  

The tenant has also left cat food outside when it specifically states in the rules not to.  This can lead to problems with rodents and other pests.  So if course they then complained about rodents and we paid to have an exterminator come in.  

What is the best way to tell them that they will not be getting some of the deposit back?  

Worth noting however... I don't see prices going down any time soon in Jacksonville and the surrounding areas.  Big corporations are increasingly moving parts of their operations here and Jacksonville is continuing to grow rapidly.  Inventory is relatively low and many sales happen before a house reaches the market.  It may be a situation where if you want into the market, bite the bullet and pay the price.  If you're looking for something as a pure investment and don't mind waiting a few years to recoup anything you put into it, then look at the areas I mentioned above.  Or perhaps look north to Nassau or south to St Johns county.  There are still opportunities there's but those areas are being developed rapidly as well.  

I see Jacksonville as being on the precipice of a "golden age".  We have the same pieces of the puzzle that Charlotte had 10-15 years ago and Denver had 10 years ago. And look where they are now.  It will be up to our elected officials, city planners, and investor businessmen to make the pieces fit together properly.  

I own some property in the riverside/Avondale area.  That part of the city has absolutely exploded in terms of desirability and prices.  2 years ago was about the last time to purchase down there for anything resembling a reasonable price.  Even fixer-uppers are starting to go for a price that doesn't make them desirable for the average investor/flipper.  The beaches, as everyone has already pointed out, are also at a 10-year high right now and inventory is low.  Properties are commanding a premium.  Taxes and insurance in Jacksonville, Neptune, and Atlantic beach are also considerably higher than the rest of Jacksonville proper so keep that in mind.  

The areas I would look in personally for investment opportunities are Springfield, Murray Hill, and Arlington.  Springfield and Murray Hill is where everyone from Riverside/Avondale have moved to because of the almost doubled rent prices there over the past couple years.  But, it may take you some time to recoup and investment there as it is still 2-3 years out (in my opinion) for those areas to be gentrified to a point that makes them desirable.  The city of Jacksonville has some big revitalization plans for Arlington so I would look around that area too.  Also, now that Khan's downtown plan has official city approval, and funding is being worked out, I would keep my eye on investment opportunities in the downtown area over the next 3-5 years.

Thank you both for the reply.  Very illuminating... Much to think about.

Hello all!  I've been reading on this website for quite some time and it is a treasure trove of useful information.  I am posting this to try and help my mom make an informed decision about whether or not to sell an income property she currently owns and any input is greatly appreciated!

Scenario:

Income property purchased in early 2015 using a 5/30 ARM with about a 4.25% interest rate. Terms of the loan state that after 5 years it can go up as much as 2.5% in a year to a maximum of 5% for the life of the loan. Purchased the house for $215,000 and invested about $25,000 for a new roof and other repairs and now it is valued at around $315,000.

The current mortgage payment is just shy of $1,000 /month including taxes and insurance and it rents for $1,950 /month. Not bad for 2 years time. But in 3 years when the ARM kicks in, the mortgage payment will certainly go up, diminishing the overall monthly profits from the home.

Option A: 

Keep the Home. Refinance the 5/30 ARM into a 15 or 30 year fixed. Invest another $15,000 in HVAC and other repairs. Risk losing value as we face uncertainty with where the real estate market is headed.

Option B: 

Sell the Home.  Face capital gains taxes.  

Questions:

*Assuming a $100,000 profit from selling the home and about $10,000 in depreciation (just a guess), how much capital gains would my mom face on the sale?

*Would all of my mom's income be subject to the rate that she pays the capital gains at?  She is retired in Florida and receives social security income as well as some taxable income from a retirement account.  

*She would use the profit from selling the investment property to pay down some debt and be debt free. She owes $40,000 on a HELOC on her primary residence and about $15,000 on a vehicle. In your opinion would it be better to sell and take the tax hit? Or keep the property and not pay down the debt?

*Will her normal income be taxable at the capital gains rate as well?

Thank you for any advice you may have!!