All Forum Posts by: Laurieann Frazier-Duarte

I topped out with 21 SFR's. I self managed them all. However, since Seattle turned against small landlords I have sold many(taking the tax hits), getting out. I'm probably an anomaly here, but here's my general system: Tenants pay all utilities. If they're not current they get a notice. They mow the lawns, (most suck at it) and they must do it or get written up. I blast the places twice a year with weed killer. I do whatever sprucing is needed to look sharp and keep the neighbors happy. They are not allowed to do any repairs or modifications, none, without written consent. My repair costs are near zero because I do all work myself, from roofing to furnaces to sewers. Before I rent a place it functions perfectly and they are remodeled with the idea that I'm renting to knuckleheads, so all things are accessible, repairable, common, and not high value. For example, no fridges with ice makers. Any damages a tenant must pay for, unless its an act of nature or tree roots. In left leaning Seattle I've lost more lawsuits than won, but that doesn't make me stop making tenants answer for their damages. At move in, they are taken by the hand and shown everything is working, if they clog a drain it's their clog unless proven otherwise. I will hire some landscaping on occasion, high tree work, it just depends, things run pretty smoothly for the most part. At move outs I always hire cleaners and bill accordingly from their deposit, then go over it again my self before showing. I used to sit at a desk, I much prefer the constant moving about and being outside, the work suits me. My average tenant is probably 5 or 6 years. I loved being a landlord and felt good about it, but since its gotten to be so regulated and anti- landlord here, its best I get out. Probably too much info here, sorry. I don't know your situation, but I know that if I can self manage, self repair, and keep costs low, anyone can. It has paid off. All it took was some tenacity.

In general we cover all utilities including wifi. We don't provide cable service as most guests are ok with streaming TV. In one property we cover pest service because it has had issues. We do cover lawn care because even though we don't buy homes in HOA we want to maintain the look of the home and keep our neighbors happy. We provide smoke detectors, carbon monoxide detectors, fire extinguisher and change our air filters as needed. Hope that helps!

My tenants are responsible for keeping up the yard and snow removal. They also pay for all their utilities.  If they want a security alarm, they pay for it (not really an issue here).  Smoke alarm and CO alarm, I provide.  

The way that I think about these things is as follows: what things will hurt the value of the property and/or annoy the neighbors and/or get me fined if I assign to the tenants and they don't do it.

1. Landscaping and snow removal on a multi should always be done by the landlord. On a single-family, I would assign lawn care to the tenant and do snow removal since it's a 24 hour window in most areas until you get fined. And you get fined, not them.

2. Pest control should ALWAYS be the landlord because you want to prevent pests. A tenant should not have to pay for that unless they continually leave food out and cause more pests than your account covers.

3. Safety alarms are always on the tenants to take over the account or make one.

4. Hard-wired smoke and CO are the responsibility of the landlord, and in reality, the batteries are too because you are protecting your property from fire. If you leave batteries there, that helps for that purpose since nothing else uses those batteries anymore.

5. Air filters should be on the landlord and it's a great way to do your quarterly inspection at that time.

There are items required by law and in general those are related to the safety and basic comfort of living. 

Then there are other items that are negotiable in terms of marketing to get the place rented or at time of signing lease between the two parties. Another factor to consider is that if you want things to get done, put it on your end; if you don't care one way or another, put it on the tenant as long as they don't mind doing it. A few common items such as:

1. Lawn: if it's in a HOA and you care about maintaining the look of the exterior, owner should take care of lawn. If it's in a class C neighborhood and you don't care about the exterior look and tenant doesn't mind it, give it to the tenant. In this case, we tell the tenants we have two requirements, one as long as we don't hear complaints and the grass doesn't touch the house that become a liability for the building, and at the end of the lease they turnover the property with the landscape in the same condition as how they moved in, then however they want to maintain the lawn to maintain that standard, we don't care. If we are start to have problem with maintaining that standard, we will send our lawn guy to mow the lawn and will bill them the invoice.

2. Pest control, this one we typically do a curtesy first treatment and then any subsequent treatment is up to the tenant whether they want to keep the service or do it themselves. 

3. Smoke alarm batteries, refrigerator/microwave filters, lightbulbs, these are default tenant responsible items. 

4. HVAC filters. This one is really a tossup. Our default is tenant's responsibility but the ones who actually change filters are about 50/50 with our experience. Often time at turnover we pull out the filter it looks black so obviously it was never changed for at least 6 months. There are AC service company offer a reasonable fee for a annual plan where they come to change the filter twice a year. If you don't want to change the filter yourself and don't trust tenant with changing the filter, having the AC company do it could be another option. 

5. Exterior maintenance such as pressure wash and gutter cleaning, these times we take care of them and usually at turnover. When I used to be a tenant, my landlord had it in the lease that at the end of the lease for move out, the tenant has to hire a professional to clean the gutter, clean the fireplace, clean the carpet, etc. I did them all because I didn't catch that when I signed the lease and I was a good tenant but I thought those are bs where the landlord should take care of. Also you don't want the tenant to start doing these items themselves and potential getting hurt, especially clean gutters.  

Those are standard practices. Some times in a slow market and we need to attract tenant to sign a lease, we throw in some of these items because the cost of individual items is less than we lowering the rent by even $50 a month ($600 a year). So if it's a slow time, and in the showing when the tenant ask, we would say if you sign a lease by this time we will throw in these items that's normally tenant's responsibility. 
 

@Laurieann Frazier-Duarte feedback:

1) How many competing rental properties have you toured to evaluate how your home compares? What repairs/improvements do you NEED to do, versus THINK? 
--Too many newbies do too little logical research! It isnt about what YOU want, it's about what the MARKET wants. Why spend money on unneeded repairs/improvements?

2) How serious are you about investing? What changes to your budget have you made to save more money for RE investing? You only need 3.5% down for an FHA mortgage.

3) Why aren't you house-hacking RIGHT NOW? 
-- Roommates could accelerate your savings and give you experience dealing with tenants.

How are you going to handle two mortgage payments while your rental sits vacant for a few months - or do you naively think everything rents instantly?
-- What market research have you done to find out the average Days On Market (DOM) for rentals in your area? Do NOT trust ANYONE! Have an agent send you a list of RENTED/SOLD properties for the last 12 months in your area showing DOM. Or look at the properties listed for rent on Zillow and note how long they've been posted.

How much is your primary worth and mortgage balance?
-- You should get a HELOC on it for emergency purposes before converting to rental.
-- Proceed CAUTIOUSLY as many will recommend using the HELOC for down payment on new primary home. NOT a good idea unless you really know what you are doing. The extra HELOC payment can cause negative cashflow, leading to possible foreclosure and/or bankruptcy.

Should you pursue RE investing?
---ABSOLUTELY!!!

You just need to do the proper research and have realistic steps to reach your goals:)

DM us for more advice.