All Forum Posts by: John Clark

"as you can tell, I am looking for general and specific advice/guidelines."
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Specifically, I say that you should avoid Chicago in general. Both the new mayor and the new City Council are ignorant of both finance and economics, and will probably introduce rent control in the near future by seeking to have the state-wide ban repealed and then imposing a local ordinance. Then you'll have massive property tax increases to pay for all the pie in the sky spending, and finally a Detroit-style cratering.

Try Texas.

You could, and in my mind should, install the separate meters, and see about designating one unit as being responsible for common area usage.

Have all bills go to you. At lease renewal time you tell the tenants that you will pay for water and sewer up to $X plus tax on that $X, per billing term and they are responsible for all amounts over that $X plus tax per billing term. You pick up the trash tax. If they owe you money, you'll give them a copy of the bill so they can check your figures. At the end of the day, you are continuing the practice of landlord paying for water, but giving them a motive for conserving water. Should you ever decide to convert the place to condominiums, your water infrastructure will be in place. You'll also know your costs per unit better, and can adjust rents accordingly.

"She is on sec 8 and to tell you the truth I just want access to my unit to move on she has no money it would be a waste of time."

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So I assume section 8 paid and you're only out her co-pay?

Has section 8 stopped paying?

Bring an eviction case for prior and current rent. That will force her to clarify her residency tout suite.

"non refundable damage deposits more specifically."

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Your statement makes no sense. You can't have a non-refundable deposit for a future event that might never occur. You can have a damage deposit -- refundable if there is no damage. You can have a cleaning on move-out fee, because there will be a move out and there will be a cleaning. But a non-refundable fee for an event that might never occur? Nope. You run the risk of being tagged for false advertising of what your rent rate truly is.

If you are living in the house you can get the homeowner and senior exemptions IF the prior owner qualified on January 1, 2019 (meaning he lived there on that date). If true, you should be able to get a certificate of error. Dunno if you get his senior freeze deduction, as that is means tested, and I don't know if it depends on his calendar year 2018, or calendar year 2019, income.

@Christopher Liffner "I suppose even if I got the drywall up, you could see the wiring date in the attic. The plumbing might be a little easier to drywall up, but access from under the house really kills that one too. "

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Do --- N-O-T --- put drywall up until everything is inspected. Good inspectors will demand the drywall be removed so a complete inspection can be done -- using sledgehammers if needs be -- and you will have spent more money and time.

BTW -- didn't you get a home inspection and list of things to remediate before you purchased?

Now you know why so many towns demand pre-sale inspections. Just you knowing that you're on the skyline tends to make people pull permits and get inspected, right from the jump.

"When I asked why, the city said that's who they get the most complaints about. My thought, "So why not fine the guys who are getting complaints against them vs. making everyone get a license?" "

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Simple. The guy who gets the complaint whines and stalls and says "Town didn't tell me it was deficient," and is now fighting private litigation. Do an inspection between rentals and you take away the excuses of "I didn't know." It's the difference between being proactive and being reactive.

@Nicole Heasley

"Have any areas removed rent control after realizing it was a stupid idea?"

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Massachusetts

"Often, the road to hell is paved with good intentions."

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Reminds me of an old New Yorker cartoon. A highway is being built in Hell (flames all around, devils overseeing the work crews) and at the side of the road is a sign that reads: "Your good intentions at work."

"I am about to sell my first rental property and I should walk away with about 125k ish after all taxes and fees. . . .

still leaving me a decent chunk of change to grab one or two more properties.. . . Or do I take that 125k and buy four or five properties in the 100k range?"

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The above is what the original poster posted. Note the term "all taxes and fees." Now it's been a while since I did a Starker exchange, but can he get a 1031 deal substituting a package of properties for a single rental property?  I don't know. I recognize tax issues, but I don't have tax answers. How many rental properties can earn an owner 12 percent or so for zero work AND secure one's primary home to boot? Given that the rental property has probably been held for a year or more, the OP is looking at long term capital gains, not short term;  a one-off fifteen percent hit.

So do the math, but we'll all agree it comes down to what you can sleep with at night.

What I stress, however, is that the return on investment for debt pay down is NOT zero. AND -- before anyone mentions depreciation deductions -- remember, there is no such thing as a non-cash deduction (non-cash credits, sure, but no non-cash deductions) on your income taxes. Depreciation is, IN THEORY, a determination of the cash reserves you should be setting aside for the restoration of your asset, and anyone who does not set aside those funds (most of us don't) will soon enough learn the meaning of the term "deferred maintenance." So unless asset appreciation outstrips depreciation (and is reduced on your balance sheet by the rate of depreciation), the depreciation deduction is not a reason to buy, or hold, an asset. I suppose one could argue that the deduction shelters income, but so would a loss on sale.