All Forum Posts by: Mike Welch

I'm currently renovating a SFR for long term hold as a rental unit. I've noticed that the gas meter has been installed in the driveway where it could easily be damaged by any vehicle pulling in or out of the property. It is clear that the unit has already been hit at least once as it is slightly bent.

How would you recommend I handle this? Should I report it to the gas company and request that they put posts up to protect the unit? Or, is this my responsibility as the property owner?

Thank you in advance for your replies and guidance.

PS - trying to avoid situations as seen here: [http://www.youtube.com/watch?v=hP0ThrQG0Ls]

Hi Kristann,

I went through similar issues with my first rental unit, also a 2/1 SFH that I have been managing since July of last year. After making significant repairs and capital improvements, a number of other issues cropped up after the renter was in place.

The most difficult to contend with was when the plumbing under the slab of the house had developed multiple leaks and needed to be replaced! This turned out to be a relatively painless fix, but it taught me a valuable lesson: Always assume half of your revenues will go to repairs, maintenance, and other expenses. Always have a reserve in place to be able to pay for unexpected repairs as they're sure to surface over time.

Even with the unexpected road bumps, I continue to be a huge believer in real estate as a critical component of investment strategy. I'm about to close on my second property, a 3/2 SFH, and feel much the wiser as to what I'm in for. Real estate investment, for me at least, is a long term strategy. I just try to learn as much as I can and make good decisions better informed by experience I gather along the way.

Good luck to you!

After a seven month search, I've found a fantastic 3 bedroom 1 1/2 bath home which I have under contract. This will be my second home. My strategy is long term hold (I never want to sell my properties). I'm very excited to own this new home as it is really well located, and has a great layout with attractive features and good bones overall.

The house was owned for the last 40 years by a single owner who is selling as she is no longer to take care of the property as her husband has passed away. I'm anticipating at least $20K in rehab fees on the property as many aspects of the house need to be modernized.

I have two questions for the experienced landlords on this forum:

1) Second Shower: Currently, there is only a single full bathroom in the house. The second batch, in the master suite, has only a toilet and sink. Would adding a second shower make an appreciable difference in its appeal as a rental property?

2) Tankless Water Heater: The water heater in this house is the original 1956 (!) issue and needs to be replaced before I bring a tenant in. I could possibly free up space for the second shower by putting in a tankless water heater and repurposing the closet where the 'vintage' unit currently sits. Any landlords with experience with these units? Are they reliable and do they pose additional liability risks or maintenance expense I should consider?

Thank you in advance for your replies!

There has been a tremendous amount of press coverage recently in the NY Times, WSJ, etc., on this very topic. In my markets of focus, I'm hearing of large institutional investors, both U.S.-based as well as foreign, buying up large blocks of pre-MLS properties to put under management as rentals.

This trend will lead to a reduction in the amount of properties available, eventually driving up prices. It will also create downward pressure on the rental rates that will squeeze undercapitalized small investors out of the market.

Another related trend I’m watching closely is the often floated concept of removing the mortgage interest tax deduction after the 2012 election cycle. This deduction, one of the few tax shelters that the middle class is able to take advantage of, has been widely discussed as being in jeopardy of being revoked to reduce the deficit. If this occurs, it would greatly benefit those large institutional investors who have accumulated many investment properties. No doubt, they will be advocating its repeal to further solidify their investment as they consider ways to increase their pool of renters.

Thanks to everyone who offered their thoughts on this matter. I greatly appreciate all of the good counsel this community offers!

Hi Joel,

One detail I did not provide: the tenants described their situation as follows: "none of the lights in the kitchen work. Other lights working properly. Lights in the 'on' switch."

Had this not been the case, I'd be more inclined to your point of view.

A good PM should be able to diagnose a common household problem (and perhaps asked additional qualifying questions) to determine this was a simple circuit breaker reset and not a more widespread electrical issue.

In this instance, I will give the new PM every chance to succeed. She's actually very experienced (in the business since the early 70's, trained the former PM whom I liked very much). In this matter, she's claiming ignorance (i.e., the last PM signed off on this before she left).

I will give benefit of the doubt and let this go, but not before I speak my mind on the matter. I also expect some amount of 'leakage,' but I don't like being blatantly ripped off.

This PM company is the oldest in my market and is generally respected. I don't want to put the tenant through a revolving door PM situation, nor do I wish to continuously build new relationships with PM's.

Property is in Tucson, Az.

Most investors I speak with manage their properties directly. I have several leads to follow up on for PM's, but no strong endorsements.

Are the termination clauses requiring the PM be retained through the life of the lease (or be compensated for their management fees) unique to my market or agreement? If not, how have other investors been able to navigate from PM to PM without this contractual penalty?

Hi Kevin,

Thank you for your observations. I agree it does not seem like a maintenance issue. The tenants are young and perhaps have never experienced a tipped circuit.

How are you able to move from PM to PM so quickly? The ones I interviewed had clauses that required I keep them on (or compensate them) through the life of the lease for the tenants they placed. Does your market have termination for convenience clauses that give you the flexibility to cancel at will?

On my recent property statement, I've noticed a charge I think looks ridiculous. I'm wondering how experienced property owners who work with PM's would handle this matter.

I acquired and rehabbed my first property in July, 2011. I then put the property under a PM as I am an out of state owner. I built a good relationship with the principal PM who was managing my property and kept in regular contact with her. Last month, she informed me she was leaving the PM company due to health issues and that another PM would be taking her place.

On my first invoice under the new PM, I see a charge for $100. They included an invoice from an electrician that states the contractor was dispatched to the property to reset the circuit breaker.

A good electrician in the town where my property is located will provide service for $50-60 / hr. I can't imagine, even with drive time, that the reset of a circuit breaker would take two hours of an electrical contractor's time. I'm also wondering why the PM wouldn't diagnose this as a flipped circuit breaker given the 'symptoms' of the situation. Couldn't a much less expensive handyman been sent out on such a call?

I've sent an email questioning the charge. I'm currently in the market for additional properties (btw, finding the same buying conditions all of you are experiencing with tons of first time home owners and investors competing on every listing), but I'm now questioning if I'd trust this PM with multi-family properties.

How do you handle situations of questionable charges you find in your PM's monthly bill?

Thank you in advance for your responses!