All Forum Posts by: Account Closed

Remember:  Always be close to your investment.  Living IN your investment is taking this to the highest level.  It should be called Max Management. 

Quote from @Kyle Ratzlaff:

I had a tenant move in a couple months back and seemed like a good tenant.  Didn't have an issue supplying the deposit and 1st months rent of 1,700 each.  However, for rent due on the 1st of May they were not only late, but had to go through social services to supply the rent.  Discussed this in the first month and allowed for this while still charging a late fee which they paid.  They mentioned they had unforeseen monetary issues come up.  Now this month, they haven't paid the rent, and I've sent another late fee notice.  They haven't answered the phone when I've called to discuss when they will be able to pay and are very unresponsive to text messages as well.

Are there any other options I have, or do I need to reach out to an eviction attorney and let them handle it from here?

Also, any recommendations for an eviction attorney South East of the Houston area to discuss with?

The first rule is to live there and SHARE the property.  That way they are not tenants and have no rights (at least in my area).  The second things go south they are evicted.  Hopefully you find a replacement before their security deposit has evaporated.  Most places only give you 2 weeks.  When you live with people its a lot harder to avoid you and pretend the didn't get your legal notices.  I used to always learn the skills of the people before they moved in.  That way if they fall behind and can't find work maybe I can hire them for something.  One guy was a month behind (which was very rare for my operation) and he worked it off getting paid 50% cash and 50% going to his debt.  Paid off every penny.  I told so many of his acquaintances/family of his responsibility and my appreciation of his honesty.  Its not about the money, its about the integrity.  Like when people pay you a debt AFTER they left and you don't know where they are.  That's so nice.  

There's going to be an awful lot of earth that needs to be moved out if you're digging down much.  I was thinking about this and how egress doors are usually preferred by tenants (as long as its not a very high crime area).  So I wondered why not dig in through the sides first so there are openings (say 2 to 4 for a medium sized house.  The more openings the easier it would be to get all that earth out.  Surely that's one of the main problems of doing this kind of extensive renovation.  Or is this usually the way its done lowering basement floors?  Or do they just use one then repair the wall later as it was?  I'm surprised at how egress entrances seem to be often ignored by house hackers.  People pay quite a bit more for a private entrance.  If that private entrance has a small kitchen they would then be completely self contained. 

Another issue of space management is deciding if one could do this without any hallways in the basement.  Every room would have its own private egress door instead.  You'd have to have a window as well for fire safety I think.  Hallways and the stairway down to the bottom floor waste a LOT of space in most houses that aren't huge.  I don't know if I've ever seen this done though.  Have any of you?  Another thing to consider is when you have a door that opens to that hallway, you can't have anything in front of that door.  That also wastes a lot of space.  Even if the door is sliding its a problem because you need to walk through so you can't use shelving there.  One option might be to build the shelving with a door like hinge so part of the shelving itself opens up to the hallway.  

Maximization of space:  We've been at this since the Stone Age.  

Quote from @Theresa Harris:

Not that I know of.  CRA will share info with the provinces (or territories) as they get their portion of your income tax, but that is it.  How much your house is worth depends on the assessed value which is often influenced by sales prices and has nothing to do with rental income.

Most cities won't even drive up and down the streets to look for things.  All they do is pull up info on sales prices.

Well if a 3 br house that sold for $200,000 and would typically rent for about $1500/month in an area where land is cheap but rental demand is strong and where small bedrooms in shared accommodation houses rent for $500/month, now has a rental revenue of $4000 a month I would think it would definitely be worth a lot more.  As long as it was done legally of course.  How could it increase so much?  1st by not renting to one family.  Instead it would be rented to only single people.  Then every bit of space in that house that could be converted to a bedroom would be.  As living and dining and rec rooms are typically quite a bit larger than the bedrooms and the master bedroom is as well these rooms could be around $700 each.  So doing the math we have:
$1500:  3 x $500 small bedrooms
$1400:  2 x $700 for the master bedroom or living/dining/rec room conversions.
$1200:  3 x $400 for basement rooms (because people would rather not live in the basement).
$4100 TOTAL
Now the question is would an investor look at something grossing $48k and see it being worth more than $200,000?  I'm betting they would.  And remember its often possible to share utilities in shared accommodation as it encourages conservation.  Or you can charge a little more and include them if the renter prefers that.  

So another way may be to use that huge rental revenue as personal income to qualify for a higher mortgage.  I wonder if many people do that and if its anywhere near as good as simply getting the house valued higher?  And if the house is valued higher by the bank does that info get to the city which might raise annual taxes?  I posted about the federal tax department possibly informing the city of rental revenues from their houses, wondering if that ever happens.  What do you think?  You'd think they would share info but I haven't heard of this before.  

Well obviously this house would be marketed to an investor.  I don't think any sane person would not take $3000 a month for a $250,000 property!  Actually it would be marketed to someone that would live there in one of the rooms so they can take advantage of the fast mortgage payback with the high rental revenue.

I should have clarified that utilities would be shared to encourage conservation.  I would also give them an option for a flat rate but it would be significantly higher than the perceived split rate.  Some people just love that peace of mind so they'll pay for it.  :)

As for making the numbers do whatever I want....not exactly.  The renters have to pay.  :)  So the prices have to be in normal range.  And no sane person rents to a family instead of individuals in their own rooms and kisses away 30-50% of their revenue (by not renting out the living room, dining room, rec room, library, basement, etc, as bedrooms).  At least you would hope not on this platform which is all about maximizing everything.  The staggering fact is many people that rent out their houses are not even aware of changing rates for rooms in their area so they don't compare what they could get (admittedly with more work).  The upside of living there is you're on top of the problems as soon as they start, a huge factor in real estate management.  Especially if you're in a lousier/cheaper part of town where most of the profit lies.  

If your rental revenue skyrocketed upwards the tax department would obviously know.  Would they tell your city and if they did your appraisal might rise meaning your city taxes might rise.  (Not what you want!)  I was wondering if this ever happens. 

I think most cities just drive up and down the streets noting obvious external changes as they don't seem to have time to spend a minute doing a walk through and recording it and comparing i with the previous walk through the previous year.  Maybe its got something to do with privacy of the homeowner.  

Of course if permits for the renovations were required that could be used to change your appraised value so we're talking about a hypothetical situation where no permits were required.  

A 1 br apartment would rent to 2 people, one in the living room.
A 2 br apartment would rent to 3 people, one in the living room.
A 2 br with den apartment would rent to 4 people.....

In many cities with high rental demand and lots of younger people that aren't home much this could really work and result in about 30% more revenue.  Sometimes 50% depending on the layout.  Unconventional?  Yes.  Lucrative, very much!

Taking this to the extreme would result in a total rebuild and layout alteration where the kitchen and possibly the bathroom are transformed into a rental spaces.  Communal facilities would be provided in the building.  This would especially appeal to people with eating problems as they wouldn't have much food on hand to tempt them when home.  And when they did eat they would be around others - peer pressure can be powerful.  Everything can help get you towards your goals of eating sensibly.

Converting the kitchen/bathroom could hugely affect revenue, especially if the kitchens were a little larger than normal.  Especially wider.  Some are very narrow.  

Your thoughts?

If the layout makes this feasible is anyone considering it?  Surely the property would be worth more this way, especially if there is little yard area around the house.  Also if one had a basement, perhaps egress private entrances could be used so the basement could become a few condos.  If the house was a wreck and needed a complete rebuild, one could alter the layout dramatically, hugely improving things.  Like eliminating hallways and stairwells (put all entrances outside).  This would be aimed at very small units for single people.   There would be a lot of neighbourhood resistance though.   It would have to be done in a very low income area.  The aim for this (besides a big fat profit) would be that this would provide far more living units for that property.  Most people, after all, the vast majority, would far prefer to share their space.  

Another option for low cost apartment type housing is to make very small units without cooking or bathroom facilities (though a chemical toilet for the privacy conscious might work and wouldn't take up nearly as much room as a conventional one does and cost much less without the plumbing and upkeep).  If the bed was mounted on top of the desk like this people could live in a very tiny area. 

Another option is to have the bed on a platform that can be raised and lowered so during the day its right up at the ceiling giving more headroom. This is the smartest way and can be done with low cost pulleys. No mechanization is needed.  If a mattress that isn't very tall is used without a boxspring of course and the supporting platform is just plywood, say 1" or so, a lot of vertical space can be saved.  Otherwise this is awkward working within a 8' ceiling.  If the ceilings are tall then you don't have to worry.  Pulley beds are more used in mobile living situations as space is so limited.  They are almost always used over a desk/computer/work area as you don't need a lot of height when you're sitting.  Here's an image search of many examples of pulley beds.  Clearly a lot of people are working with a tall ceiling.
www.duckduckgo.com/?q=pulley+b... I wondered if shipping containers could be used for a sort of capsule type shelter for the homeless.  The inside is about 8' wide so they would be placed width wise and have about 2' for storage at the end.  There could be a bed of about 30" wide with shelving around it for their stuff.  The space could be not tall at all, just enough to sit up in.  This way units could be stacked in the container, allowing a large number of people to be sheltered in one container. They're about 45' long x 8' wide x 9'? tall.  There could be different heights for different sizes of people.  2 or 3.  And of course you can stack shipping containers maximizing land usage.  For added cost, ventilation could be added so each unit could be sealed from outside noise.  That would take some engineering.  As homeless people can have addiction problems and often have loud outbursts, this might be worthwhile.  The main thing is they would have a place of their own, safe and secure.  This would especially be great for women, the most vulnerable in homeless situations.  It should be built for them to start, then for men later.  And you'd never house men and women together if possible of course.  

Being confident doesn't assure us of anything.  Its a guess.  We shouldn't invest on that.  Fine if it helps us and we're on the fence bu you don't hinge your investment on the presumption things will always increase.  They may stagnate for years and we need to weather the storm during that time.  Many, many financial advisors are pessimistic right now.  Especially as everyone and their dog is looking to buy property now.  As they say, fools rush in. This is probably the worst time to buy something like a condo in several years.  Haven't prices risen suddenly in the last year or two?  What happens usually when there is a sharp rise in prices?  They usually correct themselves and sanity returns.