All Forum Posts by: Jason Koehl

Thanks everyone for your valuable insight and tips. Its great to get advice from local investors and brokers. I don't have a mortgage on the property and if decide to hold long-term I've considered pulling some equity out since interest rates are so low. When I look at the value around 350K the 2K worth of rent isn't great considering my 7k annual expenses of taxes and insurance. My cash on cash return is only about 5%. I could make the COC return more attractive if pulled equity out and put that additional money to work.

I love Ann Arbor as city but also see better value in other areas.  I'm skeptical if the appreciation in Ann Arbor will continue compared to other markets.

I have a single family house in Ann Arbor, MI that I used to live in but renting it out since around 2011. It's been an easy rental with just two families renting it since I moved out. This house was built in 1964 and has had only minor updates as needed like a new bathtub when it was leaking. The kitchen is still original and outdated.
The zillow/trulia value is about $348,000 and homes in my area are selling at about $200 per square foot but depends on finishes. I'm receiving $2050 in rent.  The taxes and insurance cost about 600 per month. My equity is high since I've been paying it off for many years and with appreciation over the years. 

My current tenants are great but they have a few cats and a dog so the house smells like the animals. I've considered approaching my current tenants about possibly buying it but not confident on what appraisal will be with current finishes.The carpet is in bad shape, the wood floors are very worn and the kitchen is out dated.  I believe 35K could give it a new kitchen, new carpet and redo the wood floors.

I'm trying to decide between 3 options.  

1. Keep it and continue renting it

2. Do I need to rehab it in order to maximize the value and get an good appraisal

3. Sell it as is but my concern is the appraisal will come in low

Any advice or insight is appreciated

Thanks

I need a handyman or contractor in South Chicago to finish some items at a rehab. Any recommendations are appreciated. Also possibly a realtor in S. Chicago that works with investors 

Thanks

Jason

Thanks everyone for your insight.  It was interesting to see everyone's opinion and analogies.  It was a learning lesson and I'll handle things differently in the future.  If a future tenant came from a realtor I would definitely try to pay them in stages so I'm not paying a large sum and then having a tenant move out after a couple months.  Of course some realtors may not like that but if they believe their tenant will stay they may be willing or may not have much of a choice if tenant only wants my property.

Thanks for everyone's comments and opinions. The contract in the lease regarding commission only stated "Landlord agrees to pay broker a commission of 1/2 rent for lease"

Originally the tenant's realtor tried to get a full month in addition: "Tenant would receive a 10% credit towards closing costs for each month of rent paid should they decide to purchase the home at market value at any during the lease and have first right of refusal at the commencement of the lease" Also the tenant realtor wanted 6% commission if tenant wants at any time to purchase the property at market value. Of course I didn't agree to this and said I'll give half a month of rent which I thought was standard.

This is a large high end house that was my primary residence and in an area that doesn't have any luxury rentals. Looking at a different industry some employee recruiters will sometimes get paid on a monthly basis or at milestones. I could in future possibly consider including milestone payments in the contract to avoid this risk again. I'm not sure if realtor would agree but sounds fair to me and if there client has no other houses as options I could possibly dictate this.

This was definitely a learning experience for me and appreciate everyone's insight and opinions.

Thanks for everyone's comments and opinions. The contract in the lease regarding commission only stated "Landlord agrees to pay broker a commission of 1/2 rent for lease"

Originally the realtor tried to get a full month in addition: "Tenant would receive a 10% credit towards closing costs for each month of rent paid should they decide to purchase the home at market value at any during the lease and have first right of refusal at the commencement of the lease" Also the tenant realtor wanted 6% commission if tenant wants at any time to purchase the property at market value. Of course I didn't agree to this and said I'll give half a month of rent which I thought was standard.

This is a large high end house that was my primary residence and in an area that doesn't have any luxury rentals. Looking at a different industry some employee recruiters will sometimes get paid on a monthly basis or at milestones. I could possibly consider including milestone payments in the contract to avoid this risk again. I'm not sure if realtor would agree but sounds fair to me and if there client has no other houses as options I could possibly dictate this.

This was definitely a learning experience for me and appreciate everyone's insight and opinions.

My friend who is an agent listed my MI home for rent on the MLS. Another agent brought me a tenant and their tenant signed a lease. This tenant lasted less than 3 months and then eventually moved out after giving an eviction notice due to him not paying. The realtor that brought the tenant still received over 2k commission for a tenant that couldn't afford the rent. When I reviewed the application from the tenant provided by the realtor the information such as his income wasn't accurate.

My main question is do you think I should receive my money back from the realtor since she presented a tenant that couldn't pay and lied on the application?

Should I just request it back or should I involve an attorney right away?

thanks for the advice and any techniques to get some of the money back

Appreciate insight, time and opinion

My friend who is an agent listed my home for rent on the MLS. Another agent brought me a tenant and their tenant signed a lease. This tenant lasted less than 3 months and then eventually moved out after giving an eviction notice due to him not paying. The realtor that brought the tenant still received over 2k commission for a tenant that couldn't afford the rent. When I reviewed the application from the tenant provided by the realtor the information such as his income wasn't accurate.

My main question is do you think I should receive my money back from the realtor since she presented a tenant that couldn't pay and lied on the application?

Should I just request it back or should I involve an attorney right away?

thanks for the advice and any techniques to get some of the money back

Appreciate insight and time