All Forum Posts by: Michele Fischer

If you are indifferent to them leaving you could increase to market.

Normally what we do is always increase to the midpoint between current and market.  That keeps us making progress toward market but also tends to keep them as tenants since they can't find better shopping around.

So I would increase $95, about 15%.  I think it is important to not leave rent flat too long, but it is ultimately up to you how you want to operate your properties.

Generally C areas mean great cash flow but low appreciation.  The cash flow pays down the mortgage and provides the equity growth.

We got lucky and got both, but it is a fairly unicorn situation.  An area that has historically had little appreciation had a big slump.  We bought at the low end and managed for cash flow.  That was a solid move even if we sold for what we bought, but we have also seen incredible appreciation.  With inflation and worse landlord friendly courts costs have increased but increased rent has covered it.

Honestly, I would focus on strong cash flow or highly desirable neighborhoods, manage well, and enjoy the ride.

This is a clause in our lease so that everyone is clear who the primary tenant is, and the strongest applicant is the primary tenant:

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.

I would look to see what other three bedrooms are going for in your neighborhood. Look on Criagslist and other places where landlords in your area advertise. A duplex is worth a bit more than a similar apartment, but a bit less than a similar SFH. I also add or subtract a bit if the square footage, bathroom count, storage, garage, laundry, upgrades are different from what others are offering. I have some complicated comparisons but I am an Excel nerd and like to watch the neighborhood rental offerings closely year round. If a three bedroom is only slightly bigger than a two bedroom, either the 3/1 is cramped or the 2/1 is spacious and either should be adjusted accordingly.

Hi there.

I would start by narrowing down a city you would like to invest in, set up a virtual meeting with property management companies in the area, ask them what neighborhoods they manage in and how much property improvement they are willing to do on your behalf, find a real estate agent, locate a property, buy it, and turn it over to the management company you most liked.

This is probably easier now with docusign and virtual meetings being mainstream, I would check with the real estate agent to see what you need to do to get the closing notarized.  Forums on this site about long distance investing should be helpful and you just have the added wrinkle of being out of country instead of out of state.

In the spirit of keeping things simple, we use TurboTax.

You can make policies about payment menthods and Section 8, bu tthis feels more like a class of neighborhood question.  Cash payments are way more common in the lowest quality neighborhoods.  Section 8 tenants are more common in the next step up, then working class, then middle class, then upper class.  The two lowest levels are underserved, so it is a good place to make money, but it is very exhausting.

I had to tell my husband that I was was not going to swing by to pick up cash rent anymore, that he needed to for safety.  But other than that and needing to somehow see them face to face to collect rent and provide receipt, no issues above and beyond the low income neighborhood drama.

We went the opposite direction. We self-managed for many years then turned the properties over to PM. It was mostly driven by proximity, we moved away, but we were getting tired too.

There are plenty forums here on how to hire a PM.

What I like best is not needing to deal with the urgent issues or multiple move outs at the same time. What I don’t like is giving up control. PM’s rarely do things as quickly, aggressively, or cheaply as you would.

But overall it has been good and I would go that route again.

Even if you have a PM you still have administrative tasks to ensure bills are paid, taxes are calculated, and rent is really coming in.

If you are going to do this, I would figure out what market rent is and that is what the BIL should pay, deposited monthly into some sort of joint account that is only used for the property.  All expenses are paid out of that account.  The amount in the account and the house proceeds get split 50/50 at a future date.  The BIL has to get prior approval for any costs that are not standard (taxes, insurance, mortgage) and they would be reimbursed from the account, with receipt, if both parties agree.  Your BIL will naturally take on more maintenance duties, so your wife could take on the accounting duties.  Keep track of hours spent on the house and see how lopsided they are each year end and make any adjustments as both agree.  If you really want to be arms length, hand the house over to a property manager and treat BIL like a true renter.  You will forgoe the PM fees but it might be better for the relationship.

I don't use either of the programs, so can't weigh in on that, but here is some thoughts on the other questions.

Make sure your state allows non-real estate professionals to operate as property managers.  Be clear with the neighbor on what their roles are, what their benefits will be, and that they need to be up to date on Tenant-Landlord law.  

If it was me I would write into the lease that seasonal access to the backyard will be needed to harvest fruit with 48 hour notice and tell applicants about the frequent maitenance inspections.  That feels excessive to me, even every six months may be more manageable for everyone.