All Forum Posts by: Chris B.

I definitely can see separating the utilities out of the rent from the marketing perspective.  The "effective" rent can have it included.  I've seen several homes put up for rent with solar and the rent they fetch isn't much more than a similar unit without solar.  I suspect a better approach for a unit with a solar is to advertise rent and then a separate item for solar costs, but as I don't have this type, its just a guess.

I was against pets in my rental units for years.  Seeing just about every applicant has dogs, I have changed my ways and embrace them and charge extra for them.  I have done quite a bit of flooring transformation to accommodate this.  In hindsight, I have discovered poorly behaving families tend to create a lot more property destruction than their pets.

Fantastic!  Thank you.

Interesting insight.  Keep in mind that the proposed utility billback method is not legal everywhere.  In many areas, when utilities can not be discretely divided accurately between different tenants with meters, (think different tenants each with their own lease or contract and not a big happy family under one lease) then the landlord cannot arbitrarily assume a percentage of the total is due.  In the example provided, there is a long term tenant and Airbnb tenants and the proposal is to divide utilities based on percentage of the property.  What if there is 1 person in the LTR and the Airbnb portion has an average of 3, 4, or 5 guests a night?  What if an Airbnb guest left the shower on and all of the lights on for a week?  The LTR tenant isn't going to be pleased.  Of course if the Airbnb is vacant all month, then the landlord won't be pleased (with the vacancy and for footing half of the utilities.) Dividing by percentage of square feet, or number of people, or any other metric that doesn't precisely corelate directly to the percentage of the utilities used may appear unfair and a legal opinion may agree.  

Generally a best practice is to raise monthly rent by an appropriate amount and include utilities in the rent. (as you currently do with the Airbnb side.)  Alternately, install meters as needed, but this can be expensive.

 Thanks for this link.  I think it will be helpful if the state the professional is located in is added along with a link to their website if they have one.  Speaking for myself, I'm not comfortable cold calling a few random CPAs.  I'd prefer to look at their website and also try to find one that is local before I start calling.

Permits must be pulled if the work requires it.  What type of work is being performed?  If you are getting new cabinets and flooring for example, then no, its not needed.  If you are having any electrical, plumbing, or structural work done, then yes, that is almost always a situation where a permit is required.  Permits should be pulled prior to start of work and periodic inspections need to be performed as outlined by the county throughout the construction.  As the county stated, you probably do need permits.  I would tend to trust the advice of a county inspector over a contractor if the ideas conflict.  That's not to say the inspector is always right.  Just think about what you are having done and if it reasonably falls within the bounds of needing a permit.  Even a tiny bit of falling within the bounds still counts.  Permits don't need to be expensive or much of a hinderance for small jobs.

Assuming a permit should be pulled... Can it be done without permits?  Sure, the contractors can go ahead and get their work done, get a paycheck, and move on.  Are they licensed and bonded?  These contractors still sometimes skip permits, but generally are a bit more responsible.  Will not having permits come back to bite you in the future?  Possibly.  Less likely if you will be living there for a long time.  More likely if you ever sell the property or if you have renters and something goes wrong.  In addition, your insurability may be impacted.

As long as you never have a day out of town or some lunch time meeting or similar issue popup, then this sounds great.  Extra cash for your hard work.  Have a backup or two ready for the days you can't make it.  In Yuma, it should be very easy to line someone up as a backup.  You also take on the risk of late departures or needed repairs before the next guest arrives so plan for accommodating that also.

The physical things mentioned such as the car are things I observe and take note of, but are not my primary decision making points. I think viewing the applicant's current residence will be even more valuable.  These things I take note of, but I put more weight into the behavior of the applicants and family.  Of course I have my standard list of requirements which takes top priority.

If someone smokes or vapes at their car before or after a showing, it is a red flag for me as that is a prohibited activity in my listing.  I've rented to families that state they will only smoke outside and this has never happened.

If the family has kids running all over the house slamming doors and screaming during a showing, this is a bad sign.  I've rented to families like this and the wear and tear and negligent damage from these families has been substantially more then well behaved families.

Everyone should present their best during a showing.  Any issues like this will only be worse after move-in.  I look at all behaviors and pay attention to how they talk.  Simple, clear, confident answers to questions with a reply I'm looking for go a long way.  Excuses are considered, but frequently indicate the hiding of something.

As someone who has no experience with owner financing, I'm curious why an owner would accept 3% or 4% when they can flat out sell the property, invest the money and make maybe 10% in the markets?  Why not at least charge close to current mortgage rates if not slightly under at around 7%?  I know 10% isn't guaranteed, but pretty darn likely.  QYLD will give this fairly consistently. (I'm not advocating it as a best fit investment for everyone; just an example)  3 or 4 percent is below inflation.  Do they sell it for an above market price to compensate?

That's a lot of work, hassle, and risk for a up to $300 savings over 10 months.  (but more likely near zero savings)

Work: you will need to pack up and move.  You will need to collect and pay rent on time every month as well as with utilities.

Hassle: you will need to move, and find someone who will be a good tenant, and perform due diligence background checks and screening, and have them sign a good quality sub-lease lease contract with you, and trust them to not screw up with payments or destroy the unit, and you will need the consent of the owner.  To do this properly, and with presumably no prior experience, its not going to realistically happen.

Risk:  Who will you let move in?  Are you certain they will be crime free, pay rent and utilities on time, and take care of the place?  If they were this good of a tenant, they would rent from the owner directly and skip the hassle of a sublease with you.  The only incentive for them is that a) they are are a problem tenant and have a history and cant find housing elsewhere, or b) you are willing to sublease at a rent rate that is significantly cheaper than the current going rent thus incentivizing them to go through you.  

This is rental arbitrage and not worth it.  Your best bet is to stick it out for the next 10 months and then move out to your cheaper option.  I think you are better off if you have a roommate move in with you.  You can split your rent and utilities 50/50 while you still manage everything and probably be a lot better off.