All Forum Posts by: Kenton C.

Thank you all very much! Great to hear all the feedback, and now I know that the $900 is in the right ballpark. Just wanted to make sure! Thanks again everyone!!

Hi All,

I am curious as to the average cost you guys will spend to make a unit rent ready, assuming normal wear and tear? I am nearing my first tenants lease, and have been speaking to my property management about the costs, and they mentioned it averages around $900 to make a unit rent ready (for a 3 bd 1300 sq ft SFH). I know that costs will differ depending on size of home, quality of materials in the house, etc, but I am happy to hear more about your experiences.

Any tips to decrease on this cost, especially when using a property manager? Do you ever charge the tenant a non-refundable professional cleaning fee, as I'm assuming cleaning takes up a bulk of the turnover costs.

Thanks!

@Account Closed Thank you very much for the response as well! The lease says 30 days, but the PM said that their practice is to show an unoccupied unit, which now after reading all the responses, I think is the way to go. I wanted to decrease vacancy as much as possible, but it seems like that turnover period is just part of the game. Thanks!

@James Wise Thanks for the response! All very good points I did not previously think about. I think that I've now learned to wait till the unit is empty to show.

Thank you everyone for the discussion! Good points being raised on uncontrollable factors such as cleanliness of the unit during showing which might affect the success rates of the showing. I think I will have the PM advertise 2 weeks prior to tenant lease ends, and schedule all showings for after the tenant vacates (if unit is in good shape), or for when the unit is made rent ready (if unit is not in good shape). Hopefully the 2 week head start on marketing will cut down on vacancy a little bit.

@Jacqueline Carrington Very good point on having quality pictures of the unit in rent ready condition. DId you find that with these pictures, tenants still wanted to see the unit in person, but were more comfortable with the unit being in a less than stellar shape since they saw through the pictures what it would look like prior to their move in?

Hi All,

My first tenant in my first ever rental is nearing the end of their 1st year lease. I currently have a PM in place, and their procedures are to ask the tenant 30 days prior to end of lease if they would like to stay for another year. If the tenant is not staying, the PM will wait till tenant moves out, then will make the unit rent ready, THEN start marketing the property. All in all will probably lead to 1 month vacancy (a few days to make unit rent ready, and 3 weeks to market and get new tenant).

I believe this timeline is unacceptable, and that the PM should be asking the tenant 90 days prior to lease end, and if the tenant is not re-signing, the PM should begin marketing and showing the unit right away so that there will be a new tenant lined up, ready to move in right after the unit is made rent ready. 

Landlords, what are your timelines when asking a tenant whether they're staying, and do you show the unit while the tenant is still in the property? Does this become a problem since the tenant still lives there? I'd like to cut down on vacancy as much as possible, and not sure if its standard practice to show the unit when the first tenant is still there. 

Thanks all.

Hi All,

In the lease my tenant has in place with my property manager, it says that the tenant is responsible for all snow removal. Do you guys make your tenant responsible for snow removal, or your property management company?

If my tenant does not clear the sidewalk, and someone slips falls and sues, I guess they will likely come after me anyway regardless of what the lease agreement says. Thoughts? Experiences?

Hi All,

I bought a SHR in Philly from a rehabber a few months back for 70,000$. After PITI, PM fee, capex & vacancy reserve, it cash flows around $300 monthly. The property before the rehab was very likely a foreclosure, or run down.

I was thinking today that the tax figure I used in my projections, which is around $750 per year (around 63 a month) (an estimate I pulled from zillow as an estimate, and what I actually ended up paying for the 2015 year when I closed) is based on  the old value of the property before it was rehabbed. Now that its rehabbed, the philly city site shows the new purchase price of 70,000$ when you look up the property.

Did i use too conservative of an estimate for the property tax in my projections? Now that the city has recognized a sale, I should be expecting a new tax assessment to reflect the latest sale price of 70,000$ correct? I know the city re-assesses certain neighborhoods once every three years or so, but I think since permits were pulled for my rehab, they will come after the taxes even quicker since they know work was done. Even if permits were not pulled, I would still be expecting a higher tax assessment due to the increased purchase price recorded from the sale correct? So regardless of whether permits were pulled, the sale price would trigger an increased tax assessment, but might have just delayed it a year or two?

I researched what some comps in the area are paying for a comparable house worth 70,000, and the yearly taxes were around 1,000$, nearly a 30-40% increase!! a 30-40% increase wouldn't be so terrible that it eats up all my cash flow, but it does decrease the returns a bit, but the property would still be performing.

If all this is true, this is a pretty well learned lesson!

Hi everyone,

I have read a few Property Management agreements and they all seem to say that the PM company must be listed as an additional insured on the insurance policy (DP Policy). Do those who use property management do this? Will insurance companies even insure a company or person aside from the owner?

Hi BP,

A few questions for those more familiar with the topic: 

1) Hiring a lawyer to review my purchase contract - is this an expense? Or is it added to the basis of the property?

2) Appraisal - Added to the basis of the property as well?

3) If i incurred the above 2 expenses in 2014, but I didn't actually close and rent out the property until 2015, will i be able to write them off still, when I file my taxes in 2016, for 2015?