All Forum Posts by: Kristina Heimstaedt

I would be wary. I would definitely meet whoever that is before closing. Essentially that one person is in charge of your property and income. If for whatever reason, something happened to that person, does that negatively impact your cash flow? I think most investors are high control or are seeking some control over their own destiny. I'm not sure that I would sign up for something like this without being confident that I'd be comfortable with this person as a business partner. Because of the arrangement, that's more or less who this person would be at the end of the day given that they would be responsible for more than 75% of your income. 

Best of luck!!!

Run your numbers. Talk to a lender to figure out what the mortgage payment would be for a place if you were to qualify and figure out how much you qualify for. If tying up your 4k and living in your own place is less than $1500/month, sign month to month. If you're going to pay more than 1500/month to own your own place, sign the 5 month lease. Your answer is always in the numbers.

Your property manager is your teammate in the deal because you're leaving them with the responsibility of your income. If you found a property manager you like (teammate) and your teammate doesn't want the deal, blessing in disguise. I'd be more inclined to talk to the property manager and see if they don't have a property owner who is tired of having a property. The other thing to consider asking your property manager would be to see if they have any owners who have owned the properties for more than 30 years. I'm not sure how this translates out of California, but it is my understanding that in California, you stop benefiting from tax depreciation after 27.5 years (please consult your CPA for confirmation). 

Capitalize on the property manager because they're the ones who create the income out of your property for you. Plus, you also want to give your property manager a product that they're excited about. Typically if they're excited, it means that it's rentable and income producing. 

Before you sign up to reimburse the tenant for her lost food, I'd figure out why the fridge broke. Before a tenant moves in, I typically explain to them where the majority of appliance issues come from. The biggest issues related to fridges are that the ice maker dies for whatever reason or the tenant leaves the refrigerator door open too long which results in the freezer over freezing and no cold air getting the the fridge as a result of build up in the freezer preventing proper air flow. If it is tenant negligence, I wouldn't replace her food. If it was legitimately an issue with the fridge, I'd offer to pay for it. 

@Andrew Johnson @Jonathan Klemm @Shaun C. @Michael J. Hi everyone. Thanks for the input. I should add that this property is in Southern California and the monthly mortgage payment is under 2k/month and the income on the property is over 10k/month. I should also note that the building only has 3 meters. As a result, we pay utilities for 2 out of the 4 units. Within the portfolio, this is our best earner and we've done some cap ex repairs that add to the quality of the property (new deck and new automatic garage doors). I should also note that we could increase the rents by an additional $500 without resulting in too much turnover, and/or not have vacancy. Thought being that even if I can't use solar panels as a selling point to increase my rent, I still have room to increase rents. 

My thought behind the solar panels is that although it is a significant expense, it would be mutually beneficial to both we as investors, the tenants and potential resale value if we ever choose to sell our best performing asset. 

In the 5 years that we've owned the property, we've doubled the rents and the property itself has more than doubled in value (beauty of investing correctly in Southern California). @Jim D. I definitely think that learning more about the potential tax benefits for solar panels could definitely impact the financials and I will need to look more into that. Let's face it, who likes taxes. I think that is the more significant lingering question that could push this over the edge. Thanks everyone so much again for all your input!!

Offer to split the cost. It's an investment in his future home and you get a discount if he chooses to move and gets a whiny tenant off your back. He gave all his cards away when he said he wanted to buy the place. He clearly likes the location enough. I've never had a tenant say that they wanted to buy a place and then say that they're moving because they want their place in better condition than when they rented it in the first place.

Also, unless you're in a unique market, rents are going up by 2-5%/year. Unless you magically found this tenant, you should be able to re rent it.

Bottom line, split the cost. I'd also narrow down to two options for each product if you go that route. If you replace the stove, "tenant, do you want stove a or stove b? no stove c is not an option sorry." You got this!!!

thanks @Jim D. for including tax info as well. I like that opportunity as well as adding value to the property through panels as opposed to a general discount for one thing or another. 

@Matt K. @Shawn Johnson @Andrew B. Thank you all so much for your input. I like the concept of increasing my applicant pool and decreasing my vacancy period. I'm not expecting anyone to pay "over" market, but I typically like to be at the upper end of the market. Our properties are already completely gutted and totally new on the interior. In the last year, we've worked to improve the exterior of the property with the goal of decreasing the vacancy period and getting people in the door sooner. In particular, we had another 2 bedroom available at the same time that was $3200/month and I was trying to rent a 2 bedroom at said property for $2700/month. I couldn't get people in the door after driving by despite the fact that the property was equally as nice inside. Hopefully this continues to provide context for my marketplace and why I asked the question. 

I'm taking the opinion that as our market continues to be successful and grow, I want to give back to the investment so that if there is a correction, applicants are more drawn to my property in contrast to competitors. There was a recent blog post on BP that discussed amenities as trending because tenants appear to have higher expectations out of their properties if there are many of us out there and investing. 

The question becomes, is the increased applicant pool and decreased vacancy enough to offset the investment of solar panels? 

@Matt Vezina @Tanya F. thx to you both for your input. In particular we have a 4 plex with long term tenants, most of which are slightly under market. To give some context, my 2 bedroom 2 bath tenant who has been there for nearly 5 years is paying $2750 and market is north of $3000/month. 

My thought was that I've had other properties that had one meter so the rent was a little more, but all utilities included and it appeared to be a nice signing bonus for tenants. My thought was that solar panels would be a similar offer. I like the idea that the applicant pool would increase and that the tenants are probably more likely to care for the property. These tenants do a pretty solid job, but it couldn't hurt. 

Hi all,

I know the upfront cost of solar panels is significant. However, I'm wondering if I can pass the extra $50-$100/month to the tenant with the expectation to increase the demand for my property. Does anyone have any experience with this?

I definitely believe that tenants are looking for more amenities or a smoking deal. Being a fairly green millennial myself and if the rent is pretty comparable to the neighboring properties (Southern California pricing), I'm pretty sure that I would pick a green building that had free electricity with all else being equal, but maybe I'm a weird millennial. Any feedback would be much appreciated thx!!!