All Forum Posts by: Kristina Heimstaedt

I'll echo @David Dachtera's notes in regards to challenges for prospective buyers. As long as there are no serious issues with the property, which you should be able to identify via a title report, then run the numbers an decide what number makes sense for you. 

I take the attitude that there is money to be made in anything, Marcus Lemonis is a prime example of this, it's just a matter of how you work the numbers. Call the listing agent, ask if they've had any offers on the property. That should answer the question of whether it is a stubborn seller, or if you've found a diamond in the rough with a seller who just hasn't had a pitch (offer) to look at quite yet. 

Bottom line is that with a title report and a phone call to the listing agent, you should get an answer as to whether or not this deal is worth it.

Talk to the tenant and let them know about your concerns about being significantly below market and let the tenant know that you intend to change your process/structure. Let the tenant know that you want to increase the rent by 10% this year, but also provide some sort of range that you'd like to increase the rent by in order to keep up with the market, account for property tax increases and some of those major expenses. 

One of three situations should happen. Situation 1, tenant sticks around for the 10% increase and accepts the future increases. Situation 2, tenant takes the 10% increase, but moves out after the year. Situation 3, tenant moves out immediately when you try to increase the rent even by 10%. 

Outcomes for each. Outcome 1, you get to keep your great tenant and gradually increase your rent like you'd like to. Outcome 2, you increase rent by a fraction for year 1 and have the opportunity to increase to market value after year 1 with a new tenant. Outcome 3, you get to increase rent and get to market immediately with a new tenant. 

Open lines of communication with tenants are always preferred. Don't be afraid to talk to your tenant and work collaboratively to come up with a solution that works for both of you.

I always tell people that we will collect all applications by date x and make a decision at that time. Hopefully that allows you to look at a variety of applicants and give you the opportunity to compare different applicants. From there, you can typically make the argument that applicant a was more financially qualified than applicant b.

Best thing is to guarantee the entire security deposit back if he moves out by date x. For every day he waits, decrease the security deposit return by something like 10%/$10 whichever you prefer. If you make each day matter, you're more likely to create the frenzy that causes him to move sooner rather than later. Providing a gap will allow him to take a break and put it off as opposed to focussing on your goal of incentivizing him to move sooner rather than later.

I totally agree with @April Crossley. The zillow arm that she's talking about is Zillow Rental Manager. It's also an app that you can use to manage leads. 

In terms of how long it will take to find a good tenant, it will vary based on area. I personally keep track of the rental market in my community so I know what my targets should be. Take a look at your MLS data. You should be able to get a feel from there.

I'm going to echo what @Cary O. said and agree about raising rents to hedge some of these pitfalls. We increase rent every year by 2-5% to keep up with property tax rates as well as the market. I had tenants who signed a lease and went into escrow a week after they signed their lease. They're on the hook for the next year until I find new tenants. We're actively looking for new tenants and my current tenants are extra amenable to showings making it that much easier to get new tenants. I'm a fan of having a contract that says you should be getting money in the door. 

I'm an agent in California and I've been managing my parents' portfolio of properties for several years and have established great rapport with the tenants. Being in an affluent area, many tenants move out and quickly become home owners. Because people move frequently in the community, I've been thinking about how to best capture the revenue from tenants every time they move even if I don't have another property for them. I was considering the following:

1. If their next move is a purchase and they use me as their agent, I will guarantee their entire security deposit back no questions asked. (Most recent deal I did was a commission of 15k for tenants who had a deposit of 4k)

2. If current tenants refer someone to me for a purchase, I will give them one month of free rent after the property has closed. (Most expensive rental is 5k/month and the low end commissions per deals are 10k)

In both scenarios I have a positive spread and increase my volume of traffic. I understand that this is more of a real estate related question, but thought I'd get some feedback on how crazy an idea this might be slash how legal it is. I know it's illegal to take kickbacks from escrows, title companies and lenders, but why not go direct to the source right? Thank you in advance!!!

I always keep everyone on one year leases with the option to renew another year to avoid the exact problem you're talking about. If my property isn't rented prior to Halloween, I get nervous.

On the flip side, I allow for tenants to break their lease, pending we can find them a replacement. If I don't find a replacement, it leaves the current tenant on the hook financially. This is how I protect myself. However, I'm working in a high end area with few to no problem tenants and little to no negative side effects.

This is my favorite real estate economic blog:

Calculated Risk Blog

Great for big data information. He even predicted the housing bubble!!!

Typically estoppels are part of the disclosure period and provided by the seller and listing agent. The best thing you can do is to not remove contingencies until you've received estoppels as part of the disclosure process on the part of the seller. Be the buyer in the driver's seat. Take control of the escrow by making the seller disclose as much as possible, don't be afraid to ask questions and ask the seller and listing agent to clarify anything that seems fishy.