All Forum Posts by: Jen R.

I think all of your ideas make sense. My first inclination, though, is to paint the front door black along with the shutters. The white looks a bit dated. And yes to replacing the front porch post and adding some landscaping, hopefully with some flowers included and trimming the shrub by the garage. The house color looks fine to me as well. I don’t think you have much to do to spruce it up!

@Megan Hodges

Here are the columns I included:

Street Address

City

Rent

Beds/Baths

Sq Ft

Garage (Y/N)

Remodeled (Y/N)

Days on market 

Hope that helps!

First, you have plenty of square footage to turn the property into a 3/2. Can you make the layout work to create a 3rd bedroom master suite? That will be the easiest way to increase your ARV and give you a bit more room for renovations.

Secondly, it is impossible to assess rehab estimates without knowing what area you are in, but many look off compared to what I would pay. What kind of flooring demo is needed? Your demo cost seems incredibly high. For new flooring, I budget $4/sq ft for luxury vinyl plank, including install. The painting costs seem reasonable, but exterior will vary greatly depending on how much prep work is needed, how many stories, if you’re painting trim a separate color, etc. 

Many of the other costs are just impossible to comment on without knowing the scope of work. 

If you move forward, I would recommend an inspection period so that you can get some contractors through to give you real estimates. Keep in mind that since you don’t yet own the home, you will likely have to pay them for their time.

You must allow emotional support animals due to fair housing laws (not ADA as mentioned above). And actually, the law states that the ESA does not have to be disclosed during the application process. If you deny based on that alone, you could find yourself in a lawsuit. Yes, they have to request reasonable accommodation, but by law they can wait to do so until after their application has been approved.

The current law is full of loopholes for scammers, but unfortunately it’s what we have to work with...

This site offers some helpful info:

http://www.tenantresourcecenter.org/esas

Another issue is that it appears you purchased with a loan instead of cash, essentially doubling your closing costs. On lower value properties, that does make it awfully hard to pencil out. 

In order to cash out your entire investment, you have to not only account for repairs, but financing costs, holding costs, etc.

Just to throw something else out there - since you’ll be going over to fix it anyway, do a full house inspection at the same time if you didn’t conduct one when you purchased. That way you’ll have a record of current condition. If anything else ends up broken beyond normal wear and tear throughout the lease or at move-out,  you’ll have proof to be able to charge the tenant for the repair.

@Justin Scott yes, every time a new rental listed, I would add it to my list (along with the address, beds, baths, and sq ft). Occasionally I would go back through and see how long the properties were listed before the vacancy was filled. I probably kept this up for 3-4 months when I first started looking into the local rental market, and it helped tremendously when it came time to set the rent for my first couple of properties.

Are you looking at apartments or SFR's? I find single family rent prices to be harder to nail down because there are fewer comps and they are harder to track. When I first started I kept a spreadsheet and tracked rental info for my area for several months, so that I could get a feel for market rates and how quickly places rented. Track whatever sources are popular in your area for listing properties (Zillow, Craigslist, FB marketplace, etc.). Within a couple of months I had a pretty good understanding of the market.

Our market is similar; if a good deal comes up it’s going to have multiple offers by the end of the day. I’d look for a local agent who can show you properties more quickly, or an agent who is part of a bigger firm and could send a colleague to show you a property if he/she can’t make it. Or a hungry agent without a ton of personal listings and could dedicate more time to you.

I’d recommend asking other investors in your area for referrals.

I actually tend to agree with Thomas, as he does clarify that all of those aspects should be in the acceptable range. Obviously you will drive people out by not taking care of routine maintenance requests or raising the rent beyond market rates. But, assuming you are doing a decent job in those areas, I think the other reasons are much more likely to be the causes of tenant moves. I think I do extremely well in all those areas (charging a fair rent, maintaining a quality property, and treating tenants well), and we still turnover units on average every 2-3 years. I can only think of one tenant that moved out to rent another similar home in the same area (and it’s because we were about to file for eviction on them...). Otherwise our tenants move for job changes, marriage/divorce, purchasing homes, etc. I guess the point being that increasing the average tenant stay is not that simple. Personally I think it has much more to do with the demographics of your rental area. We invest in high quality rentals that attract a more professional clientele; that tenant class is going to be more transient than others as they typically are only renting as a stop-gap.