All Forum Posts by: Edd Sylvester

Thanks for all the feedback! And thanks for the details of your similar situation, William J Anderson, very helpful. This confirms what I was thinking of doing: offering them a bit higher monthly rent if they want to go to M2M or a bit lower if they go for 12M. They've been great, low-maintenance tenants.

My tenants are wanting to switch to month-to-month, for their own flexibility, at the end of the current lease, ending 5/31. Any thoughts? As far as I can tell, this is only an advantage to the tenants. I could end up with an empty rental trying to fill it in December. But maybe I'm missing something. My thought is to offer them the same rent if they sign a 1year lease or some higher amount if they want to go month-to-month, to make it worth the risk on my end. Curious how others have handled this. 

Late reply but appreciate the feedback!

I'm in the middle of tenant turnover, spending a good bit of money and time rehabbing my rental and debating if all this money, stress and time is worth it. Here is some background:

Property 1: I started into the world of rentals when my primary home I'd bought in 2013 ($250K) had increased by 60% by 2016. I took out a HELOC and was able to buy a bit of a beat up SF house that we rehabbed and started renting. It has had a good rental history and it's value has also gone up dramatically, over the last 7 years, ~87% (bought for $255K, current Zestimate ~$480K). I am grinding through tenant turnover currently, busting my tail on projects in the evenings and weekends and putting a bunch of money into it to get it rented again. The difference between the hoped-for rent and the mortgage payment will be ~$1300.

Property 2: In 2020 we sold the first primary and bought another house. Then crazy 2020-2021 happened and the value of this house increase 60% in 18 months. We did a cash-out refi to buy another SFH rental. Similar situation as the first rental. We had to put a lot of money into rehabbing it but now we have it in good shape with a tenant in place and rent minus mortgage is ~$400. It's all been a pretty wild ride.

My wife and I got into this rental thing is a sort of haphazard way. My parents had a rental unit on their property when I was growing up and it always stuck with me as a great way to build wealth, add sweat equity and eventually help pay for college tuitions and retirement with cash flow. So I talked my wife into the first one and she was on board, we had the equity to pull off the first rental with a HELOC. We are a single income house as she stays home with the kids, so our personal cash flow was relatively tight, but we figured it'd be a good long term play to shift the equity in our primary into a breakeven or small cash flowing property that could be bigger down the road. And then values exploded. Then the second explosion in 2021 gave us the equity to replicate what we did the first time.

Having the 2 rentals is great on paper but the last 2 springs, we've had to dump a lot of money into these rehabs, as well as a lot of time and stress. This whole operation has always been more my idea. My wife has increasingly thrown out the idea that we just sell one or both. Too much money, too much time and energy away, too many ignored projects at our own house. I know we'll get burned on taxes if we sell, my accountant is now looking at what that would look like. But at the same time, it feels like I'm spending too much money (we've now piled up a good bit of credit card debt and HELOC debt, as well as our own cash) and time on this. I've got young kids and both last spring when getting rental #2 up and running and currently working on turning over rental #1, I'm gone a lot working on things, running around, setting up meetings etc.

I'm sure if and when I get property 1 rented and it's back to the passive part of rental management, it'll all look and feel a lot better but I'm wondering if I might have gotten ahead of myself, stretching ourselves to acquire properties more than we should have. I'm looking for advice, thoughts, a pep talk, anything!

Thanks

Thanks @Linda S.. That's really helpful.

Thanks, appreciate all the replies. How about if someone is proposing to move in with a roommate to combine income to meet the minimum income requirement? Assume there is no ground for not allowing that? Just have to have both names on the lease, etc? Thanks. 

Thanks @Keith Smith, that's perspective is really helpful

Thanks for the replies and thoughts. I think part of my concern is trying to figure out criteria (still new to this). I want to set a minimum credit score and 3xrent income but what if I don't end up with any applicants that meet that criteria? Or I have one that does but is rude/late/smells like cigarettes vs someone else who is polite/on time but slightly below minimum criteria? I hope it doesn't come to that but I'm new to the screening process and curious how others handle it. I'd love to accept only the perfect tenants but I'm not sure they'll come along before I need to have it rented. Thanks.

I'm just beginning the tenant screening process and was wondering about some guidelines. My sense is that you can collect applications from anyone who fits your minimum criteria and then choose the "best" based on income, credit score, "gut feeling" etc. But the "gut feeling" thing seems like dangerous gray area legally. I've had some prospective tenants contact me who would be moving in with multiple family members, etc. I would view a family of 2 adults and 2 kids as preferred tenants over a couple, an uncle and a friend just from the standpoint of wear and tear from multiple adults, stability, etc. But making sure that isn't some form of discrimination. Any thoughts would be appreciated. Thanks.

Great that's helpful, thanks