All Forum Posts by: Glen Wiley

To avoid equal housing violations you need to advertise your requirements clearly and apply them consistently to every applicant. If you reject the application for a reason not given to other applicants then you are vulnerable to a suit.

I have found credit score does not correlate with payment behavior so it is not a factor in my decisions. I only use it to see if they will be honest with me about what will appear.

You need to absolutely not care or even think about things like their relationship. That is a good way to risk a discrimination suit via equal housing violations.

In virginia it takes a few months to go through court proceedings to have a non-paying tenant removed. I recommend that you spend a few hours looking at resources, do it by the book. In Virginia it is pretty easy and there is a lot of information that provides guidance for non-lawyers to handle the eviction on their own.

The last eviction I did started in July and tenant was out in November. I lost a month due to a mistake I made by not providing a particular form to the tenant before starting the process.

I work full time as an internet infrastructure engineer and manage 6 long term rentals and 1 STR. You don't need a property manager.

Low end housing has done very well for us in high and low interest rate markets, the things I like about it are:

1. Attracts young families who tend to stay for many years to avoid disrupting their kids schooling and for other reasons. Low turnover = low vacancy = higher returns.

2. Cheaper maintenance, 1 HVAC unit = lower costs, fewer bathrooms = lower maintenance, smaller roof = lower maintenance

3. Cheaper houses have lower expectations on amenities, less likely to need fancy upgrades like solid counter tops. Cheaper to operate over time.

4. Turnover is faster and cheaper, low income tenants often leave the place a little rough, cleaning a 1000sf house is a lot faster than cleaning a 2000sf house.

I use zillow and have been happy with it for background checks. I have also used apartments.com (for some of my SFH), I prefer zillow. e-renter.com does a good job if you just want the background check and none of the other services.

When dealing with tenants and especially low income tenants here are a few thoughts based on 20 years experience and a few evictions:

1. Do NOT get soft with late rent. If they are late more than 5 days, start the eviction process. Many of the low income folks I have rented to are pros at "working the system" and will bleed you dry. It sounds cold, but you are running a business, you provide a service that they agreed to pay for. If they can't pay, remove them.
2. Charge late fees and stick to it. This is a kindness to tenants. Once they know where the boundaries are they are more likely to stay on track.
3. Ignore credit ratings but ask them to explain what you will see during a credit check. If they lie to you, do NOT rent to them.
4. Do a background check, if they have judgements for non-payment of rent, do NOT rent to them. If they burned a landlord before, they will burn one again.

Be kind, be understanding but be firm.

Our long term SFH rentals cash flow $500-1000/month. Your STR should cash flow WAY more than that. We also operate an STR, I wouldn't do it unless it could perform at least 3x our long term properties.

Congrats - you will enjoy the journey. A few things I have learned in 20 years of landlording:

1. Read "Landlording on Autopilot" - best book a new owner can read.
2. Find a CPA that understands real estate income properties - we saved tens of thousands in taxes annually once we found a real expert. Squeezing the most (legally) out of taxes is complex.
3.The LLC that owns the property will probably need to be in the state that the property is in, we have a holding company that covers the local LLCs. Talk to an attorney who is experienced in asset protection.

If the house needs mild rehab then I dont list it until I have the old tenants out and have cleaned it. I usually expect 1-2 months vacancy in those cases. One way I look at it is that if I can get $2000 instead of $1800 because I can make the place really clean then it does a few things for me:

1. Extra $200/month covers an extra month of vacancy in a year

2. People who live clean are unlikely to rent a place that looks trashed - I want to attract tenants who live clean

3. The increased rent pays big time if the tenant renews, in the example above, I can't really raise rent to catch up with market if the first year was discounted (say raising rent $400 instead of $200 the next year) - if i do, the tenants are likely to leave.

We moved all of our mortgages to Virginia Credit Union. Their rates beat the local banks and they don't sell their mortgages. What drove us to them was handling a different mortgage processor for each of the rentals - was driving me crazy.

The CU also is very open to aggregating our mortgages and underwriting each new purchase has been smooth sailing - they understand income properties.

I owned an older home that had this issue, it ended up being the line from the water meter to the home. Due to the digging involved we spent $8,000 to have that line replaced (about 4 years ago in Lynchburg, Va). I recommend that you include a concession from the seller.