All Forum Posts by: Karen W.

Hi everyone, I'm in a situation I'm not sure how to handle. If anyone has any insight, any advice would be appreciated.  

My renter suddenly needed to move out because of family reasons with 1 week notice and very early termination of a 1 year contract. Because it seemed like he was having a rough time, I told him I would not hold the early termination against him. Instead, I would do my best to rent out the property asap so that if the house was left in good condition and there was no gap between his last payment and the new renter's first payment, I would refund all of his security deposit. 

Issue is that he left the house somewhat dirty. There's a lot of debris on the floor including muddy foot prints all over the living room. I need to hire a maid to clean up the place. In addition, he shut the water and electricity off. In his defense, he did tell me he was physically out of the house about 3 days before everything was actually shut down, but he paid for the whole month so it didn't occur to me that he would have shut all of that off without saying anything to me. Therefore in all this confusion, now I can't show the house until everything is back up and the house is cleaned (house is dark, hot, and dirty right now), and I need to get someone out to reactivate the water and electricity. Can I deduct the cost of the maid and the additional cost of having everything turned on from his security deposit, in addition to lost rent until the next renter moves in? Is this too much? Thanks!

@Amit M.

There's no need to make silent jabs at people trying to help. Reading your other posts on this thread, I would suggest you tone done your inflammatory words. Each poster on here is just trying to help educate each other. Disagreements will occur, but each disagreement also adds another perspective for everyone to learn from, both right and wrong. Let's try to be nice to each other.

Also purchasing a rental with all cash doesn't make sense unless you need to do that to secure the property against other bidders. Bring cash aggressive is also not a good idea. It's another maximizing the return as much as possible so as little money as possible is producing as much money as possible. Again, opportunity cost.

@Amit M.

It took me a while to understand poor return from high equity locked in a rental property but I think it's true. Another poster on another discussion worded it beautifully but I'm not so eloquent. Basically it's opportunity cost. That high equity locked into the rental property is dead cash. It's not growing anything. If Diane had refinanced and took that money out during the years following the big stock market crash to reinvest it either in more real estate or the stock market/mutual fund, she would have made more money. Hence subtracting the opportunity cost from that dead cash can make a great investment -actually good, or a good investment actually poor. Hope that makes sense. 

I try not to look at appreciation and just see these investments as long term holds. Appreciation is too unpredictable. 

Ok. But how do I determine it? Is there a certain percentage I put aside or amount? Does that amount vary by house age?

This is my third. What percentage do you recommend? I put it at 5% because I figured turnover rate would be a little lower given the tenant type. 

Regarding capex, I'm not sure. The house is only 13 years old, roof is 7 years old. Everything is in great condition lookwise as it has only had 1 owner and it was owner occupied. 

No rehab needed, currently in great condition. No property management as we will self-manage. All sewer/water/garbage to tenants. 

Hi everyone, I'm still new to real estate investing so any help from those more experienced than me would be much appreciated. I'm interested in focusing on A type SFHs with higher end tenants with homes in the 150-250 range. I came across this and am considering putting an offer. Is this still a good deal despite its higher price or should I walk away? Thanks!  

Location: 13 year old SFH 2000 sqft in great solid neighborhood in great location. Only 1 owner, which is the current one and owner occupied, never been rented out.

Cost: 265,000 with 20% down

Rental income: 2000-2200 per month based on market

Property tax: 250/month

Insurance: 80/month

HOA: 29/month

Assuming 2050 rental per month, 5% vacancy and 5% maintenance per month set aside for expenses, and 4.1% interest rate (got this in December 2016), I would cash flow at 466 per month with a cash on cash of 10.5%.