All Forum Posts by: Michele Fischer

You could ask for proof of income to verify they are a government worker.  It may not be a scam, it may be some who is ESL or who is "just the facts"/abrupt.  I imagine he is having a difficult time finding a mid term rental with that sales pitch.

There are three hassle factors here - one that you have no idea when they will leave and won't have much warning and two the very specific invoicing requirements.  I would really understand what is needed and what it would take for you to provide it.  And third, he has a ceiling on what he can pay per his reimbursement allowance.

Given these hassles, there should be a premium, and I don't know how that rate compares to market rent.  For the right price I might keep the conversation going, but if it is low I would move on.

Honestly, even with a longer contract we have no idea how long our tenants will actually stay, so that alone wouldn't scare me off.

It's obvious that you are burned out right now, this might not be the best time to make an important decision.  I would look for small ways that you can lighten your load and be in better head space to evaluate where you want to go next.

We never made the jump to scaling up, but we did get burned out and had to do similar soul searching.

You have lots of options... read up on Brandon Turner or others path to scaling up, outsurce all or part to property managers, sell and be done with properties, or 1031 into a different property class.

Good luck!

I agree with the advice you are getting.

I would tell them they are responsible for rent until you can get it rerented and I would work hard to get it rerented quickly.  If they leave it in good condition you could wait to refund that until it is rerented then prorate a discount.  Follow the local laws on documenting the security deposit timely though.

You are in a better position than them to take the financial loss and the good karma will come back to you.

Personally, I would not keep a rental at an expected deficit, and I would not want a rental without a safety net to be able to cover six months of disasters.  With only one rental, you never know what costs or vacancy will come up.  With more rentals it becomes less likely that a loss will wipe you out.

She may be better off selling the house and getting rental assistance on an apartment or rental house that they can continue to co-habitate in.  In our areas we have a lot of new low income construction that comes with a section 8 housing voucher.  Agree $800 seems overrpriced for a room, especially since it seems like he is acting as a live in nanny, the lawyer seems out of touch.  Disruption for the kids to move, but If they can't make ends meet, they should get to a cheaper situation as soon as they can.

What do you mean by problematic?  Fussy?  Moves often? Criminal history? inconsistent or less idea income sources? Moving from outside the area and clueless? Facebook feed is full of drama? Bad landlord reference?

I use a point system for screening; applicants get positive points for positive aspects, lose points for negative aspects, and I have a point threshold for each property.  They either have the points or dont and I move forward or not.  The more you can make your screening objective than subjective the easier and more successful everything will be.

Congrats on that cash flow.  I try to manage mine at $100/month/door.  I know that the west coast has lower cash flow with the higher prices, but seems like you are in a good spot if you can maintain that average.

My state doesn't have state income taxes, what a blessing! 

Keep receipts for all your expenses for federal taxes, keep the deposits in a seperate bank account.  We like to keep all the rentals income in another account set aside to cover the big maintenance or expensive turnovers.

I don’t have any legal advice, but maybe some helpful perspective.

When we return security deposits, we write the check to all tenants on the lease, such as “Tenant A or Tenant B”. If they did not provide a forwarding address we send it to the unit address, hoping they filed a change of address form. If not you will find it in the mailbox and can keep it until someone contacts you, or not.

If folks change tenants and updated rental agreement are signed, we make it clear that we do not deal with divvying out the security deposit. Our standard language states:

In the event that Tenants decide they no longer want to live together, ___________ will be considered the primary Tenant to make decisions about modifying or terminating tenancy. Deposits will not be returned (full or partial) until all tenants move out.

If Tenant A didn’t come to you to get part of the deposit back they may have gone to tenant B, but they most likely walked away from it and I feel it is between tenant A and B to sort it out.

Personally I would return it to tenant B, the active tenant in the current active contract.

Personally, I would not keep a rental that is not expected to cash flow. Additional costs will creep in and costs seem to go up faster than rents, so I would sell and try to otherwise optimize the VA loan. I would also not have a 5 bedroom rental. In my area these are rare so they are difficult to set market rent, and I imagine get a lot of wear and tear with a lot of occupants living there. That's my two cents, I'm sure there are other views.

Agree it is difficult to assess costs when they vary so much by location.

Keep in mind that some turnovers are sickenly expensive, and that is just the nature of the business.  Evaluate the situation to see if you could have done anything differently to mitigate the loss and implement changes to your processes, but know that this happens and hoepfully just not too close together.  This is the heart of the reason housing isn't mroe affordable, that landlords bear these types of costs every day.

You could probably find cheaper labor, especially to haul away the junk, but not easily as an out of state investor.  As far as the bedbug cost, I would consider how long you are willing to let the place sit empty.  If you can get all the bedbug containing furniture out of the place and it will sit for awhile (or let it sit while the other repairs are done) you may be able to avoid some cost, but if you want to get a paying tenant in sooner rather than later you will want to bite the bullet and get it well done.