All Forum Posts by: Freeman Schultz

In certain situations, landlords will pay the rental commission which is usually one month of rent. How do landlords recoup the cost? Is it by having a 13 month lease instead of a 12 month lease? Do they just write it off?

Has anyone had experience with lease guarantor insurance services? The idea is that tenants pay a third party to act as a guarantor. Apparently it is very useful for overseas tenants who have no credit history. Instead of putting down an extra security deposit, they pay a fee to the service to act as a guarantor. If they default, the services pays the lease term.

It is a helpful start. Thank you.

My understanding of principal is the money borrowed for a mortgage and that is paid off along with the interest with to the lender. 

I just want to clear something up with the performing note, when you mean by the principal and interest you are referring to the payment the borrower makes to the lender?

Now if we switch performing note with investment property and the payments are from the tenants, is what is left over after the mortgage and expenses paid off the principal?

Just like many of you here, eventually I would like to own several properties and eventually be able to live off of them. One of the things that I have been told is to make sure I do not touch my principal. Can someone explain what that means and how do you do that?

Real estate investing is considered to be passive income. But if you are living off the income from a building does that become active income and does that mean you get taxed at a higher rate?

I appreciate any answers.

From my research in property management, one of the things I have noticed that is a good property manager has a list of vendors they can call on for repairs. But I also noticed that appliance companies have services that can be called if there is an appliance needs to be repaired. 

instance, GE has a service where you call them and they arrange for a vendor to check out what is wrong and repair it. For a fee of course. Is it better off doing that or just getting your own people involved.

Thanks everyone for the information. I realize there is no one size fits all way of doing things but as long as you touch the major points like employment, criminal and any evictions then that should be enough.

Along with a credit report, I have read that other documents for a rental application should be included. I was wondering what are the ones that are needed with every application? I have heard from one investor that you either need pay stubs or an employment letter. Both are not needed. Do you agree?

On this list, which ones do you ask for?

Recent bank statements

Employer letter that shows salary, time of employment and posiiton

Two years of tax returns

Pay stubs

Landlord reference letters

Credit report

Since starting my education in real estate investing, I have heard odd stories about types of tenants. One story I have heard about is the tenant who is late with the rent or in some way causes problems for the landlord and then when their lease is up for renewal and then they go further by asking for a reduction in rent. What I have heard is that when that happens, their lease ends up not being renewed? 

Is that what usually happens?

When a building is sold and the security deposits are passed onto the new owner, does whatever interest accrued when the security deposits were in the possession of the seller carry over to the buyer? 

For example, in New Jersey, the security deposits have to be in accounts that accrue interest that needs to be distributed to the tenants at the end of the year. Now when a new owner takes over, are the responsible for distributing the interest that was generated by the previous owner?

Does the security deposit interest carry over after the building is sold? Is the new owner responsible to distribute that interest if the tenant never received it from the previous seller?

@Patrick Liska: Thank you for the response.

In NJ the security deposit is a month and half of the rent. If there is an increase in the rent shouldn't the security deposit also increase?

For instance if the rent has been raised to $1000 so the security deposit should be raised to $1500. 

What do you think?