All Forum Posts by: Gregory Schwartz

Quote from @Chris Seveney:

Quote from @Kevin James:

My tenant wants a refund of $175 for a lapse of 4 days without internet for the cost she incurred by using her mobile hotspot. The wifi was scheduled to be set up on the day of her move in but because of a strike at AT&T, they weren't able to come until several days later. The contract states that internet is included in her rent.

Am I actually obligated to cover the full amount? I’d like to help her out with a part of it, but the full $175 seems high. Any advice on handling this? 

Why would you include internet in rent? If your lease includes it, then yeah you probably should cover it but why on this earth would you ever ever include internet in a lease. 

 I agree. 15 years ago including internet in rent was a great way to stand out. Today, not so much. 

Get a job! Seriously. I took a job where I had the opportunity to manage a large portion of my mentor's portfolio. For those 3.5 years, he poured into me, teaching me more than I ever deserved, and he paid me! Your boss can make a great mentor. 

Sounds like she should take this up with AT&T. As a landlord be symethetic to the tenants, and use your available resources to assist when they need it, but do not give into demands for situations outside of your control. 

For example, when the power goes out during a storm and a tenant buys a generator, do you pay for the generator and the gas? NOPE. 

@Neal Daftary help us out here. How many properties will you purchase in the next 1-3 years and generally what will they be worth? I'm a big fan of KISS. Let's keep this as simple as possible....

Ex 1: 3 single-family rentals, value $300-400 each. I'd just put them all in one LLC
Ex 2: 20 units, 2 single-family, 2 fourplexes, and a 10-unit apartment. Now we might want a series LLC

Spend 4 years learning/mastering direct-to-seller marketing. Once you have deal flow you can....
1. Wholesale
2. Flip
3. BRRRRR
4. Get your RE license and sell these on market

You can also use the marketing skills you learn and direct it toward apartments or commercial real estate and jump into that asset class. The point is that the hardest skill to learn is marketing for deals. Focus on the skill not the business. 

Can you consolidate the portfolio (sell a few properties) and decrease your debt? 

Also what are the market rents? what is the potential rent? 80% of professionally managed properties in my area are at market rent but under potential rent. What do I mean by this.... Well the PM companies rarely push rents and dont like to work to get the best rent rates, as a result they create a mediocre average rent rate throughout the market. I can usually get 10-15% over the market rent, I call this our potential rent rate. So what is your potential rent rate?  

I'll probably get pushback on this... but here's my experience. I have 4 units, 2 have formica and 2 have quartz. There has been no noticeable difference between all 4, same income, same 5-star reviews. 

@Steve Tse thanks for the background. I think that all sounds very fair and in keeping with how we raise rents. What is the monthly rent? What would it cost to turn the unit / get it rent-ready for a new tenant?

I don't aggressively increase rents if a tenant's current rent is within the turn cost / 12.

For example, if you need to replace flooring, paint, and fix up a few things... your turn cost might be $5-7k.  $6000 / 12 = $500. In this situation, I would likely only increase rent $50-100. If the tenant pushes back I'd feel comfortable with a $20-40 increase.

Not a perfect system but its how we think about it. 

@Nathan Gesner I agree 100%. You said it much better than I did

A few things to note
- Know the market value of your rental, because I guarantee your tenants do. 
- Your expenses don't mean anything to a tenant. The market dictates the value of your rental. So dont use the "taxes when up" excuse with a tenant
- Raising rent to market rate could prompt a tenant to move to save money. For me, a turnover costs around $2,000. Spread over 12 months, that’s about $160/month. So, if I’m under market by $160, but the tenant will signed the renewal thats a win. I’d rather avoid the turnover and save on out-of-pocket expenses.
- Having a set % and applying that each year is lazy and will result in higher vacancies. See my first point