All Forum Posts by: Doug S.

Hi Matt,

If I were you I would definitely do some number crunching to help make a decision.

Find out how much multifamily units cost in your area, how much you need for a down payment, and what the expected rent is. Speak with realtors in your area and do research on your own.

The problem with selling real estate is that you are taxed (if you own as owner occupied less than 1 year) and pay the approximately 6% in realtor/listing agent commissions. Have you considered renting out the house you are living in or a portion of it? Maybe it is possible to rent out your current house for a lot more than your PITI (mortgage + taxes + insurance) so you have enough left over to pay rent for any other place you choose to live. If you can do this, then it is essentially the same scenario as selling your home and buying a multifamily unit. You live rent free and own a property, but you're better off keeping the single family home as they tend to appreciate more in value.

Also, not sure if this is what you want to do, but look into getting a home equity line of credit (HELOC) on your primary residence and then doing some remodeling work or building an addition to your home. The numbers may work out well for selling or even renting a portion of your house. If you open a HELOC and use those funds for home improvement, then when you sell you'll have to repay the loan in full, which works to your advantage.

Keep in mind that HELOCs affect your credit score. Even if you aren't borrowing on the line of credit, it may affect your ability to secure a loan for buying real estate.

Hope this helped...

Doug

Hey Brian,

I think I see what you are saying. It definitely makes sense to just look after your best interests. However, if you are on the other end (you, as landlord, receive stellar recommendation for a possible tenant) and end up leasing to difficult tenant that doesn't willingly pay for property damage they caused, then that may matter to you.

You should do what is in your best interest first, and if possible, do what is in the best interest of fellow landlords also. Treat people how you would like to be treated....including other landlords.

Doug

Hi Stephen,

Sounds like a difficult situation. It is in your best interest to wait until your tenant moves out before saying anything to the tenant's new landlord.

Since you have already provided the tenant's future landlord with a 'glowing reference' then I think you should definitely let the landlord know about the recent events (after your tenant has moved out).

The new landlord may be able to avoid the situation you are in now by explaining to the tenant up front what the 'security deposit' may and will be used for, and to explain the cost of labor and material for property neglect such as baseboard repair, broken closet doors, cleaning, etc. It would also help the new landlord if they explained that the security deposit, if it needs to be used, will not go into their pocket - will only be used to repair the property.

Thanks,

Doug

Hi Pontus,

You said there are monthly communal fees between 10-40/month, but I don't see this included in your spreadsheet.

Also, I have no experience with Spain real estate so take my advice for what its worth. I noticed some of your calculations are incorrect. J14 should be the summation of J12+J13, not just J12. Also, the formula for E5 is strange - definitely re-check that formula.

I am curious, why do you calculate the rent after tax? In the US it is more complicated, so you may want to revisit that and see if that makes sense. Maybe you are able to write off your rental property on your tax return so that the government doesn't take 25% of your rental income?

Thanks,

Doug

Update: I spoke with the tenants and they agreed to pay for half of the mold test - this was their suggestion and I accepted their offer.

Unfortunately mold tests do not say whether a space is inhabitable or not....they only reveal what types of mold and their spore count.

However, there is more good news. As long as a room does not have any source of water coming in AND the humidity of the room is less than 50%, then mold cannot grow. This won't help with the mold air quality test, but it does ensure that the room should not have any future mold issues.

Thanks all for your replies. Got some really good advice.

I agree, getting the mold test is the responsible thing to do. I'll swallow my pride this time and order a mold test.

I would be perfectly okay with getting a mold kit but the tenants are completely stubborn about having a mold test done by a certified/licensed mold expert. At this point I don't mind spending the $300/$400 for a mold test, but the tenants attitude is making this so darn difficult. If this ever did go to court I am fairly confident I would win but I have more important things to do than prove some post-college grad brats wrong.

Any landlord/tenant law experts out there in Virginia?

Hi Rob,

That's a good idea. I ran that by my tenants but they rejected my offer and once again demand that I pay for the mold test, regardless of whether it comes back positive or negative. I think your idea is fair but my tenants are being very very stubborn. Their indignation is making me want to fight them even more, but I know that is not the path I want to go.

Thanks

Hi Rob,

Thanks for your advice. I've already told the tenants they can move out without penalty for breaking lease but they don't want to move out. They want to stay. They demand I pay for a mold inspection or else they will sue at a small claims court.

Thanks

Hi Bienes,

Thanks for your comment. I wouldn't mind the tenants breaking the lease and even offered them this option. The tenant would rather stay and threaten to take legal action. The lease is over in July.