All Forum Posts by: Fran Flanagan

Thanks for the replies guys. Harry, yea that was one of my thoughts as well. Asking landlords to be responsible is one thing, asking them to predict the future is quite another. If someone fails to screen properly, tenant had prior conviction for selling drugs perhaps, then slap him or her with a fine.

My biggest problem is that the absence of a tiered system makes it possible (extremely likely) that this could be applied indiscriminately. I could support such penalties if it was a result of continued problems. Perhaps step 4 or 5 after a warning and two or three rounds of fines.

The local borough where I own my rental property has come up with a real doozy of a new ordinance to go into effect this January. I'm fairly sure that they wanted a new law to deal with a few problem properties, problem landlords and just went entirely too far. I'm curious if any other landlords have encountered anything like this.

Basically, in the new ordinance, if my tenant gets arrested for pot smoking or one of their kids gets cited for underage drinking, I can't be a landlord in town for 3 years? And I can't sell my property to another investor for the same 3 years?

I know that the town prefers to have owners in houses, but the area is popular with 20-somethings who currently have trouble qualifying for loans, or want to live with their friends short term without committment... I'm fairly new still, rather curious if anyone has dealt with anything like this before.

From the ordinance:
Any rental property licensed under this Ordinance that is determined to be a nuisance shall be subject to revocation. A nuisance property shall be any property which is in violation of the Borough property maintenance requirements by being in a substantial state of uncleanliness, disorder or disrepair; any property substantially damaged by fire, flood or other natural disaster; any property determined to be uninhabitable by the Code Enforcement Officer; or any property which is occupied by any tenant who has engaged in any or all of the following conduct:
1. Drug possession, sale, or use.
2. Underage consumption and/or possession of alcohol.
3. Illegal possession or discharge of firearms.
4. Possession or use of fireworks or other incendiary or noisemaking devices.
5. Possession of noxious chemicals or materials
6. Untimely or excessive noise or disruptive conduct, including but not
limited to, noise or disturbance caused by voices, radios, stereos, televisions, tools, machinery, equipment, motorized vehicles or animals.

Any property which has been subject to revocation of a Residential Rental License Permit under this Ordinance shall not be eligible for a new or renewal Residential Rental License Permit for a period not less than three (3) years. Further, any landlord who has been subject to revocation of a Residential Rental License Permit under this Ordinance shall be deemed ineligible to hold (individually or as a member, shareholder, officer, director or partner in any limited liability company, corporation, partnership, limited partnership, limited liability partnership or any other entity) a Residential Rental License Permit for any new or additional rental property for a period not less than three (3) years. Any entity, as herein described, which is associated in any manner with a landlord who has been subject to a revocation under this Ordinance shall be deemed ineligible during any such period of association.

The full ordinance (7 pages) for anyone interested is here: http://morethanthecurve.com/wp-content/uploads/2013/06/residential-rental-ordinance.pdf

I'm considering an offer on a 4-plex, where the two upstairs units are occupied. Understandably, they don't want people tramping through kicking tires.

The downstairs needs work. If we got it we would plan to totally renovate the downstairs to make it into a more modern layout. I wouldn't want to live in the upstairs if it looked like the downstairs, but people live there so maybe it's better? (I'm newer to this, so not as much experience as some of you in what sort of conditions people willingly tolerate.) Obviously if the upstairs needs as much work as down, the price I'm willing to pay adjusts accordingly.

How would you price an offer here? As if upstairs is OK to get contract, then negotiate downward if it's not? What sort of contingencies would I need to allow for this secondary negotiation?

Basically trying to figure out the correct balance between protecting myself and not making my offer so obnoxious / intimidating that it's rejected immediately.

Thanks, Fran

Thanks for sharing this quick calc. If you want to make it easier to do in your head, this same calculation is basically sf * 2.2.

Area * 3.5 / 48 * 30$ = Area * 2.2

Same math, but much easier to simply double sq ft and add 10% in your head for cost.

It may have been too simple to be mentioned earlier, but make sure that you get yourself a good umbrella policy. They are cheap and a good idea even if you successfully get the property in an LLC.

If you google for the biweekly amortization calendar you'll have your answer. With today's rates you'll save very little. At 3.5% interest, you'll pay a 30-year loan off in a little more than 26 years, "saving" 4 years or 48 months.

In that time, you'll make 26 extra payments. So the actual savings is only 22 months of payments, which is less than 2 years.

In my opinion, this advice made a great deal of sense with high interest rates and almost no sense in today's environment. The idea of saving 6-7 years is not even close to true with rates below 5%.

Get a 5/1 ARM.

Rates are basically the same as 15 year, Rate should be < 3%. I wouldn't pay it off any faster than you need to, since there are investments easily earning more than 3% right now.

If you want to pay it off early, you can... If not, you don't have to. Since you want to move in 5 years, this will minimize interest payments while maintaining flexibility.

Does the neighbor have any code violations?

My township has strict laws on height of grass, no cracks on sidewalks, trees need to be trimmed to 10 feet above sidewalks and 14 feet above street. I would file some complaints back.

I like the idea of calling some local minority rights activists. Any family friend lawyers or friend of friend? But them dinner for a letter. It's likely to me that a strongly worded letter from a third party will put an end to this crap.

I rather like your letter. Seems the right length and tone. I would probably sign it with "Respectfully," at the end.

I wouldn't.

I'd also be wary of renting to people who didn't have one month's rent set aside for a deposit on their next house. They're basically one problem away from failing to pay rent. Perhaps this is normal in your market though.