All Forum Posts by: Jeff Ba

Quote from @Josh Bowser:

Jeff - I don't think I'd worry too much about the looks of the furniture as long as it is fairly inline with today's style. Your tenant profile for a furnished rental is going to be different than if the tenant has to furnish the property. Typically, furnished rentals are for shorter term stays, so the tenant is most likely going to be able to deal with whatever your style is.

Should be able to command much higher rent depending on the area for a furnished rental - minimum of 50% more than LTR.

One option could be to lease the house and sell / lease the furniture in a separate bill of sale / contract. This could be a huge win for someone that is relocating to Atlanta and doesn't have / want to move their furniture with them.

Just my thoughts!

 What would lead you to believe that a 50% premium could be charged over normal long term rental rates, just for a furnished property? The rental rate might be $2,200. I doubt anyone would think $3,300 for a furnished place is a prudent price to pay. This is only for an 1,800 sf. one story ranch, not like it's a furnished 5,000 sq property.

Quote from @Henry T.:

um, not having to move furniture?

 Yes. Instead of "moving" it, you just "leave it there" for the next person. For example a "sofa" and "TV" and "desk", etc. Rather than you "moving your stuff out" and someone then having to "move their stuff in", you just "leave" the furniture there and rent the place as "already furnished".

I have my own single family home in a nice middle America area of north Atlanta. I want to move out and wondered what are the pros and cons of leaving my furniture here and renting it out as a furnished home?

I get it that the furniture might not fit everyone's desires; someone might want a king size bed instead of a queen, and someone won't like the color of the sofa, or quality of the lamps and entertainment center, etc.  

I would have to charge extra for the furniture to be here, knowing that people are going to put dings in it, spill stuff on it, etc. I'm just wondering if homes that are furnished draw in tenants who don't tend to stay that long? How much more can I get for a furnished home vs vacant home? Another 5% to 7% perhaps? 

Renting a home that is furnished would certainly mitigate damage done to the house with move in/move out. No more dings in the walls from people moving in heavy furniture. 

Quote from @Michael Dumler:

@Jeff Ba, have you thought about refinancing the property to pull your capital to purchase the next deal and still hold onto it as a rental? A strategy utilized time and again by experienced investors. Is this an option for you? Most would advocate holding but it depends on your financial position and where you're moving to. You've noted that you have another rental, is that property paid off as well? If you need to verify rental and sold comparables please feel free to reach me via cell or email and we can hop on the MLS together (contact info is listed in my bio).

That is a good thought but my rental home is not paid off and won't be for years. It generates $200/mo. income provided no repairs are needed. Aside from that, my income is basically zero so I think refinancing is out of the question; I don't think a bank would do it. Even if I could refi my own home, the next house I buy would not be the next "deal" per se, but rather a home for me to live in. 

$500 towards principal is a good thing. If I were you I'd hang onto if if it will paid off in 10 years (but I don't know how old you are). Just think, in 10 years a house that is sending you the equivalent of $1,300/mo. is a good thing.

I live in Atlanta and want to move out of state. I have 2 homes here; one is a rental home that I'm keeping. The other is my own home that I'm considering selling or renting. I'm leaning towards renting it. 

I have lived in my own home for 30 years. There are pros and cons to selling it or keeping it as a rental. 

The bad part is that the house was built in the early 70's and was built with swiss cheese (ie, not built well). It's a 3/2/2, only 1800 sf, built on a slab. I've already had a pinhole leak in the copper pipes under the slab but most of the pipes go up into the attic from there and I've had one pinhole leak in the attic, plus a pipe burst with a recent freeze (first time in over 30 years) where water was pouring down from the ceiling. Who knows when the next pinhole leak will happen and if you have one with a renter here, they're not as forgiving or as understanding when you have to cut up some of the slab or take out the entire ceiling of a bathroom. It's also VERY difficult to heat (but not to cool) due to its unique layout, but the winters are pretty short in Atlanta. 

The good part is that I've always liked the unique layout of the house. It's in a good area of town and just 1 mile away from a Walmart and other good big box stores. 

If I sell it....... I'd be right at about the $250,000 profit without having to pay capital gains taxes on it. I could sell the house and not worry anymore about all its quirks or repairs needed. I could simply take the money, buy another home with the money, move, and be done. 

If I rent it.......  A) Though if I sold it I'd have the cash to go buy another house, I wouldn't have any income. The house is paid off and this would rent for about $1,800/mo.   I could buy another house from money in my savings though it wouldn't be as easy without all the additional cash from selling this one.    B) I've done a ton of work on the house over the years and feel if I sell, that I'd be getting nothing for my efforts. At least if I rent it, then I'm getting monthly income from all my past efforts; that it was all worthwhile.   C) If I ever decide to move back to Atlanta, I could come back to this house and pick up where I left off, in an area with friends and businesses that I'm familiar with.   D) if I keep the house as a rental beyond 5 years, I would lose the $250,000 capital gains tax exclusion, since you have to live in the house for 2 of the last 5 years.    E) Even if I kept the house and came back in 10 years and lived here for 2 more years, the price of the house will likely go up over the years and I will exceed the $250,000 exemption. 

What angles haven't I thought of? What else is there to consider?