All Forum Posts by: Ken Musial

I personally don't like pre-screening over the phone as a prospective tenant can say anything they want.  I do check court records for evictions.  If I don't see any, then I set up viewings.  It's at these personal interactions where the prospects are a bit more forth coming and comfortable as well as revealing.  I like to watch if they truly scrutinize the place based on their needs or if they are ready to move in that weekend without barely looking at it (major red flag).  I like to look at their car, see if it's messy, and check their registration/inspection dates.  

I had long term tenants with very dated and worn laminate kitchen counters.  Knowing that I would have to upgrade if they ever left to stay competitive in that market, I decided to install granite as a surprise while they were living there in hopes of delaying a vacancy.  The reaction was of extreme gratitude and I expect they aren't going anywhere for awhile.  

I advertise on Zillow and Craigslist and sometimes get tons of inquiries, which would require a lot of questionnaires. The easiest way I've found to weed through these is to know how to view your state's online court records.  I'd say a good 75% of my inquiries have been to court on what Virginia refers to as an Unlawful Detainer.  This is essentially a court case involving their landlord.  Your state my list it differently.  If I see any of these, the inquiry goes straight to my deleted folder.  

I was just shopping around for primary residence home owners insurance and am running into a few issues with major carriers not wanting to insure my property.  It turns out that a water leak claim from a rental condo is tied to my social security number and thus major insurers are shying away from me even though the two properties are not related.  Has anyone ever run into this before? If so, are there ways around it?

Thanks,

Ken

I have landlord policies through Safeco/Liberty.  My policy does list personal item coverage, but it's only for like $6k.  This would include anything that's not permanently attached, like appliances.  However, I don't see anywhere where it lists me as an occupant.  

As mentioned above, you will get tons of inquiries and people that don't show up to the showing.  To help immediately weed through these, the first thing I do is go to my state's court website (assuming they are local).  If I see any eviction or attempted eviction (Unlawful Detainer in Virginia), I simply move onto the next one. Many states have this visibility.  Other debt collectors will also frequently show up such as finance companies and furniture stores.  

My market all but requires I provide W&D and they do indeed break down quite regularly since tenants are hard on them.  My units are always supplied by Craigslist finest used devices.  If you manage your own properties, you should learn how to fix the most basic problems with them.  90% of the time, it's a 10 minute fix.  Learn how to replace the dryer thermal fuse, the door safety switch, and the belt.  On washers, learn how to replace the motor coupler and the door safety switch.  A few YouTube videos will save you hundreds if not thousands over time.  

To me, the situation depends on your age/retirement goals.  It's almost the same thing as allocating your 401k in stocks when your young and shifting to debt instruments as you get older.  Using leverage on real estate is a great growth strategy that will yield greater returns and expand your portfolio,. albeit it with some risk.  When you're older, and thinking about retiring, then having paid off properties generating consistent income is the way to go.  So, there are no wrong answers here.  It just depends on what you're trying to accomplish. 

Here's an example of a unit I own.  It's a 3-BR condo in Virginia Beach that I rented out in 2010 for $1,450 which was close to the market rent.  Today, there are still similar units in that area renting for between $1,400 - $1,500.  I have left that rent at $1,450 for all 8 years, which I directly attribute to the same tenants living there the entire time.  I will take 0% vacancy over an 8+ year period all day long.  But, let's say I was going to raise rent every single year at 2%.  If these tenants would have made it to current day, their rent would be $1,700, which there's no way they could afford.  They probably would have moved out years prior.  But lets say they got very comfortable and didn't want to move and thus paid me the higher rents.  I would have made an additional $10k over 8 years.  If they didn't stay, then it would only take 7 months of vacancy to erase that, and that's assuming I didn't have to revert to market rates to get new tenants back in, which also would be unlikely.  It sucks that this particular market hasn't grown much, but I firmly believe I have made more revenue on this unit by not raising rents than I would have if I had jacked it up every year.  I know the larger/commercial property managers play this game of overcharging based on a "comfort fee" and have the volume to back up this strategy.  As a Mom and Pop investor, I can't afford to play that game.     

I self-manage 5 units and I tend to focus on the market rates and less about making sure the rate goes up every year.  I realize that operating costs increase steadily, but unfortunately that rental market doesn't always follow.  If it does, great.  Raise rents accordingly.  As a landlord, my biggest expense is vacancy and communicating to tenants that your rate is going to go up every year regardless of what other units are charging is a great way to ensure they don't stay very long.