All Forum Posts by: Jeremy Lee

It would be a one year lease. We would be moving to South county. But yea, you're probably right about things not breaking every week - I think the concern is more about the big picture and what will happen with the way other things are handled overall. "Small things" like this seem like they can be indicative of bigger issues. But again, this is for a year - it's not like we're planning to stay forever.   

I don't have all the full details but I'm pretty sure the landlord had to replace the water heater. I don't know how long it was leaking for but I would think that usually you'd know pretty quickly if it were leaking that badly - even before ours was replaced, the pilot light went out and I noticed a small amount of leakage before the point that we decided to replace it. Unless the tenant was living with no hot water for a long time and didn't care to report it, I could see that as gross negligence (in terms of not reporting it). At the same time, when the water heater leaks like that, it seems like there isn't much that could have been done to prevent it other than by getting it checked regularly and just replacing it. So I suppose it's a toss-up but I would think overall this is something the landlord should have just taken care of completely.  

Hey all,

So we are facing a big decision on whether to move into a rental or not. It's in an area we have been wanting to move, there are currently no other rentals that fit our criteria, now is a good time to move (as we intend to move out of the current place and sell it), and the place we are considering renting is nice and well-kept overall but it is slightly smaller than the current place so we have some minor concerns about squeezing everything in.

BUT the bigger concern is with the landlord. During our due diligence process, we actually knocked on the doors of a few neighbors and spoke with them. One happened to be the prior tenant who had lived at the unit we are considering renting. She really liked it and said the landlords were "nice" but that they were actually quite difficult to work with (I think there might be a slight barrier in communications/understanding what the landlords were saying as English is their second language). She then went on to start ranting and complaining about how they were unreasonable and essentially stingy/penny-pinchers... basically that they made her pay for the home warranty service calls on normal wear and tear types of issues (the washing machine didn't work well, the water heater started leaking and needed replacement, etc). She also complained that they took money out of her security deposit for a landscaper they just brought in to clean up broken pottery in the yard which she claims was there from the prior tenants. On top of that, she wanted to have her own landscaper come in to do general maintenance/cleanup (presumably for a lower cost) but they ignored her requests to that and had someone else do it.  

We met them yesterday (including their agent and our realtor/agent) and they were...interesting. Prior to this my realtor raised some of the concerns that we heard about from the prior tenant and the landlords seemed to get quite defensive (understandably so). Anyway, when we met with them nearly the first thing the landlord did was have me come over to look at all his documentation about the water heater and basically trying to justify why he was in the right and why the prior tenant had no business complaining about paying a $75 service fee for a leaking water heater (which it seems to me is normal wear and tear since most people aren't going to damage a water heater) and how he had to pay out of his own pocket to replace the thing outside of whatever the home warranty deductible was. It felt...petty. I almost wanted to tell him that I'm not there to play the judge (because it started feeling like that) but that I just wanted a fair and reasonable relationship when it comes to that stuff. I've read around and my understanding is that some landlords leverage home warranties but some think that in addition to offshoring the headaches of work requests, they can also offshore some of the costs (including being billed the service call charge regardless of whether it was wear and tear or tenant-induced damage). My understanding, from a *reasonable* landlord's perspective, is that landlords *should* just take care of and cover any non-damage/wear-and-tear issues that arise. If something was damaged, of course the tenant should be responsible, however. My point is, and I hope this would never happen, but I don't want to have to pay a $75 service fee every time something starts going wrong not due to damage (e.g. leaky pipe/faucet, leaking water line behind fridge, leak from washing machine, clogged dryer vent, leaking water heater, A/C condenser fan gave out, furnace stopped working because the control board went out, etc etc etc). I don't know what the condition is of *everything* in this unit or how much life is left - we could go in there and have all these things fail on us 5 months in, and then what? 

Anyway, both the husband and wife were slightly stand-offish but the husband more so than the wife. It was a little awkward and often hard to understand the points they were trying to make. But they seemed nice and *wanted* us to rent from them. My take, based on the discussion between their agent and my realtor, is that the prior tenant was troublesome (sounded like the feeling was mutual though) and that they are looking for a 'unicorn' of a tenant who won't give them any trouble (or even complain) and who will pay rent on time. Out of all the applicants, it seems we are top of the list (else they wouldn't have wanted us to come meet them and have a long discussion yesterday). My realtor perceives them as wanting to be as passive as possible. I have no problem when it comes to trying to be passive but I think there are certain things where no landlord (at least ones who choose not to use property management) can assume to be fully passive, particularly when it comes to the topic of repairs/maintenance. I'm just trying to prevent headaches here if possible - would really like to just sign the lease agreement but wanted to get some feedback on if this sounds like a "skip it" situation or if we should suck it up and if there are also ways to protect ourselves or 'manage' the landlords so that we can prevent these types of issues from arising. One of the big reasons we want to make the move is to get our kids into the boundary of a certain school to get them enrolled in a language immersion program (guaranteed in if you are inside the neighborhood boundary of the school).

This would be on a 1 year lease, and the intention is that we would be looking for a new permanent home and hope to have bought by the time the lease is up anyway. The option of selling now and buying ASAP has come up but this would put other constraints and stress on us that I think would be just as if not more difficult (stress of prepping, staging and showing WHILE residing here, which means moving all our stuff around for paint work, carpet cleaning, etc. We also have new noisy upstairs neighbors who just moved in so this is partially driving our desire to generally just get out from living under someone. But even after this, we'd have to rent-back for 60 days or so and would still be on the clock to find a place and in the specific neighborhood of the school where we want our kids, and we'd be doing all this during the election timeframe, where there may be low inventory levels based on what we've heard from realtors in general etc - if we can't find anything, we'd have to rent anyway). The 1yr lease option I'm inquiring about gives us the most flexibility but at a higher cost and with potential conflict. 

Thoughts?

I've done some light research on other rentals in our community and it seems that if you run new flooring (I guess vinyl would be the most durable?) throughout and make some other more 'minor' updates, you can command at least a couple hundred dollars more worth of rent. I'm wondering if it's worth it to at least do *some* updates like the flooring, paint, fixtures and perhaps minor bathroom work as a means to get it both rent ready and ultimately sale-ready. Especially if we are intending only to rent for a year, it seems like we'd get a pretty good return at least for the flooring alone. 

As a quick benchmark, there's a place that was rented for $2550 that's an upstairs unit (ours is downstairs) with the same layout and very similarly with carpet running through most of the place. In contrast, another unit that's the exact same floorplan as ours rented for $2900 in December but they have new flooring, recessed lighting, and partial bathroom updates (new vanities and mirrors but same tub and tile). Also nicer closet organizers installed too.

Thoughts on that? Or is it still better just to save all of this for after renting out?

I was also curious if bottom floor units are generally less desirable and will, by default, always command a lower price compared to an identical upstairs floorplan. $45k is a lot to pour into one of these units but I'm wondering how much more we would realistically net compared to not doing any rehab or maybe doing partial rehab. This is the Northwood Villas community btw. My realtor/friend thinks we could probably end up selling as is for anywhere from $600-615k as-is. If a nice rehab was done I'm not sure what we might net - the unit above us, which was rehabbed years ago (5+) and rented out with short-stays ever since, recently sold for $675k. The problem with our unit is the noise levels too - the construction between flooring is shoddy and the contractor who did the work above also didn't do a great job factoring sound insulation in, so we can hear everything and especially heavy foot traffic (not sure how much of a factor this will play into renting our unit out as well btw) 

Thanks @Joe Homs - I've heard too that flooring can be tricky and a potential turn-off as buyers might not like the choice of flooring. But overall, it seems that it's beneficial to do. One contractor was saying based on what he's seen that kitchens and bathrooms typically don't have the best ROI in terms of the money you put in and what you get back - I don't know if that holds true for certain types of properties more (like condos and apartments versus SFHs) or also if it is location dependent. I heard the front door is a huge thing in terms of replacing if you can... I think in our HOA though, unfortunately, they won't allow it - every unit I've observed in our community has the same exact front door.

As far as when to rehab, if we were to do the flooring and painting, is that something we ought to consider doing *after* renting it out? The concern is that once rented, that new flooring/paint and renovation could get damaged etc and be in need of repair and refurb. Thoughts on that? 

Thanks Joe! Good to hear from you. That's a good idea - it might be worth driving and even walking around the community at night some time just to see how it is. That, I hope, would give a better idea. I realize I pulled that review off Yelp, so I also think it should be taken with a grain of salt but she obviously sounded pretty upset either way! 

Hi all,

We are planning to move to south county soon and after we  plan to rent out our condo in Irvine for a shorter term lease before we go to sell. I think we would likely just do some minor renovation (maybe paint and carpet cleaning) before renting out but after the lease ends and the renters are out we would look to do some more renovation. 

Just looking for suggestions on the most minimal renovations/updates/improvements we might want to consider as our place is dated.
It the original carpet from when I first moved in back in 2007 (I think the carpet was recently installed back when I moved in) throughout and has been kept up relatively well since then but it does show signs of wear. We don't wear shoes in the house though so it has held up well because of that I think. Other than that, white large subway tile in the kitchen, bathrooms and entries. A lot of original fixtures and lighting though. The kitchen we repainted and had most of the appliances updated. The bathrooms have the original vanities, lighting, tubs and bathtub tile walls - most of the faucets were changed out along with the toilets when I first moved in but some of the faucets are dingy now. The blinds are the older style cell shade/honeycomb shades - they're in OK condition. The windows are the original windows and some don't full close all the way. We just had a new water heater put in this past week as the prior one had issues. Furnace I think was put in by the previous owners possibly the same time the last water heater was installed (2005-2006?)

Again, just looking for the common things that will get us the best ROI in our area - nothing super fancy, expensive or anything that would take a long time to get done.
Seems flooring (vinyl tile in the bathroom, kitchen and entryways. And laminate in the common rooms and bedrooms) would go along way as well as a neutral color theme throughout like greige?

The kitchen and living room are separated by a pocket door - I've seen a number of other units remove the pocket door and open that space up to give a more open look, so I'm considering doing that too. As well as adding cabinet and drawer pulls. As far as the bathrooms, not sure if it would be worth putting in new vanities, mirrors, corian walls around the tub and curved shower curtain bars or whatever.


Another factor I'm concerned about down the road especially with selling (and even renting!) is the noise from the upstairs neighbors - the walls/ceilings are thin here and it doesn't help that a prior owner for the upstairs unit installed hardwood flooring (and without very good padding) throughout. So you can pretty much hear it whenever someone is walking around up there and the footsteps are pretty loud even if the person isn't necessarily 'heavily walking' - not sure if that will majorly detract from a sale or not.

Hey all,

Looking for feedback/info on the Mirador community in Laguna Niguel - anyone currently or previously live there? I stumbled across a review of someone complaining about the community on Yelp from November last year:

Quote:

Sounds a bit concerning. We're considering renting a condo in the community but would prefer not to deal with the above if stuff like that is actually going on there.

We spoke with the listing agent for the condo we're considering and she says she hasn't heard anything like this and at least the immediate neighbors to the unit we're interested in are "pleasant" and past tenants/owners haven't complained about anything like this.

Would appreciate any information anyone has for anyone who might be familiar with this community.

TIA!

Thanks for the reply! So the property would not be a duplex where there are different entities residing across two units - it would be a condo where a single family resides. The relationship of Party A and B is parent (do not reside at this residence) and child (resides at the residence and is fully using it). Basically, the parents want to gift their ownership interest fully to the child and the child's ownership interest would simply increase from partial to full. 

Hi all,

Wanted to pose an interesting question for feedback:

Is there anything in IRS section 121 that speaks to the impact on holding periods when there is an increase in ownership interest in the context of a property that is co-owned? 

For example: Party A and Party B co-own a property 50/50, where only Party B resides in the property and has resided there for a decade). Party A decides to quitclaim deed their 50% ownership to Party B (lets just say as a gift). Now that Party B has retained full ownership, can they go and sell the property and qualify for the capital gains exclusions provisioned under section 121 *without* needing to reside there for at least two years?

My understanding is that if Party A fully owned this property and outright gifted it to Party B in full, Party B would definitely be required to pass the ownership and use test and live there for at least two or more years. However, I don't see where in section 121 it would address the situation I presented (which is based on the premise that co-ownership was already established and there is now an increase in one party's ownership...). 

An alternative situation to the one presented is: Party A and Party B co-own a property 50/50 and Party B decides to build an in-law unit in the back yard, which would increase their ownership interest/stake. Because that ownership interest for Party B increased with the addition of the in-law unit that was added, would that really impact the ownership/use test and holding period to where they now wouldn't be able to sell that property without incurring capital gains unless they remained there for an additional 2 years?

Thoughts?