All Forum Posts by: Dana Dunford

@Sam G. - Put together a spreadsheet with all of the important factors. 

Income

• Current savings 
• Rent (assume higher than usual vacancy rates and lower rent than standard to be safe)

Cost:

• Living expenses (be conservative and allocate over what you typically spend)
• Tuition and books
• Property (be conservative and assume higher maintenance costs than typical)

Be more conservative with your assumptions than you typically are --> estimate your monthly outflow based on tuition and living expenses.

With your conservative estimates, subtract cost from income over the duration of school (come up with monthly and quarterly forecasts). You will then be able to see if you can afford it.

As someone who has done a lot of research on whether school is worth it or not (I have 2 masters degrees and 2 undergraduate degrees) ... dropping out has a really bad return on investment --> you've wasted time and money (unless you start the next Facebook, then drop out). SO, do this analysis up front rather than figuring it out as you go along (and potentially dropping out).  It's all or none if you want school to pay off for you.

I hope that helps!

@Keith Jourdan -- Where are these girls currently living? If not at home, then I would contact each of their current landlords and ask "have they caused any noise disturbances in the past?" You want to be as objective as possible in your process, eliminating assumptions to the best of your abilities.

@Al Williamson -- I completely agree on the lease regarding noise disturbances. 

Once this term is written in the lease, highlight it to the girls (most young tenants don't read the fine print in the lease). Let them know that a quiet building is crucial based on the existing tenants' rights to enjoy their living environment. If the girls are big partiers, then they should be smart enough to look elsewhere ... to avoid an eviction.

@Ryan Ahlgrim - It will depend on the location of your property, as some states / counties have regulations where you cannot require a fixed term lease after the initial lease is up for renewal.

If the law allows you to do it:

• Pro: It gives you another year without turnover
• Con: You can only raise rent once (the newly increased amount) and not based on the market conditions throughout the renewal year

@Justin Kroepfl -- 

• Property Mgmt Cost: The industry average is 6 - 10%. You can expect to pay 10% with a SFH. You get discounted pricing based on the number of units and other factors (for example, if the unit is $10,000 a month, then 10% is going to be way too high).
• Lacking Services: The #1 thing to me is transparency. I want a property manager who is not afraid to share everything with me. After all, it is my asset. I want to be able to log into a system and see the receipts from the vendors, the details of which tenants are paying on-time and which tenants are late / what the manager is doing about it, etc.. When a property manager doesn't provide me with transparency, it's a red flag that they're trying to hide something from me.

@Thomas Swindell - First month's rent + security deposit. 

Please note that each state has their own regulations as to how much the security deposit can be. For example, CA limits 2x monthly rent or 3x monthly rent (for furnished rentals).

@Account Closed -- Here is a BP Guide to Evicting a tenant, as it will have links to your state's process. I hope that helps!

@Account Closed on the formal notice. You need to start the eviction process. It may take 3 - 4 months, but that depends on where you're located.

My best guess is that she has done this before and assumes you're an amateur by sending the emails and texts. If she sees a formal notice, then she may reconsider and it will take a much shorter period of time to get her out of there.

 Also, (you have probably realized this) ... make sure to screen your tenants properly. You can mitigate the risk of a bad tenant.

@Darius Johnson -- I use my own software to collect online applications, initiate application fees (request money), and collect online rent. 

Here is the list of solutions BP recommends for online rent collection. Some of them may also collection application fees, so you should check.

@Jarrod Miracle - Congrats on your first property. Here are some recommendations to help you get started:

• Residential Lease Agreement - I recommend RocketLawyer as the UI / online signatures make it a very easy process. It's also very reasonably priced ($5). (I'm glad you're not getting a free one offline ... that always worries me as they tend to be incorrect)
• Tenant Application - Online tools for this are very good. I use my own service, but there are other great ones out there.
• Background Check and Credit Report - BP has tenant screening under the "tools" and it's through MySmartMove (TransUnion credit incl.). I use ApplyConnect (Experian credit incl.) because the tenant automatically receives a copy of the report. I believe TransUnion doesn't offer the tenant a copy, unless they write a snail mail letter or something. However, both services should yield similar results, with the exception of which credit bureau is providing the score.

Screening tenants is the most important step in the process, so make sure that they meet your income-to-rent ratios, credit minimum, etc.

@Emily Minick - I assume you separate your personal expenses from your investment property's expenses, correct? (Either through a business LLC or a different bank account?) Here is my process:

• Quickbooks online: Income and expenses (associated with my business' bank account) import to it automatically. I code everything based on accounts and vendors. Quickbooks provides full income statement reports and other tracking features. 
• Rent collection: I use my own software, because then I have all tenants, late fee notifications, etc. on one platform. I also don't have to give the tenants my routing # and account #, which is what happens with direct deposits. I control how much money they are able to send my way.
• Spreadsheets: forecasting and ad-hoc analysis

I think Quickbooks is by far the best software out there. They specialize in an incredibly user intuitive experience. Hope that helps!