All Forum Posts by: Marty Rogachefsky

I own a rental property in Cleveland that's currently going through the Section 8 process. The repairs required by Section 8 after the initial inspection were pretty minimal, but I've heard that there are grants and certain lending programs that were available for Section 8 landlords (such as the Community Investment Program). Does anyone have any tips on the best way to finance renovations/improvements for properties like this? Curious if there are any grants available or if there are only better lending terms. Interested to here what strategies folks have used.

2 Votes

Cleveland, Ohio

Quote from @Kevin Sobilo:

@Marty Rogachefsky, if you repaired the old refrigerator that would be a maintenance/repair aka an operating expense but by replacing something that had reached its useful life its a capital expense and is depreciated.

A couple things to keep in mind:

1. The 27.5 year depreciation schedule is for a residential property improvement as a whole. There are different schedules for different categories of things. A commercial property is depreciated over 40 years. An appliance like a refrigerator is depreciated over just 5 years.

2. Yes, you get your benefit faster by improperly claiming this an expense, BUT besides it being technically incorrect it can affect your ability to get certain kinds of financing.

For example a DSCR (debt service coverage ratio) type loan looks at how a rental performs to determine how it qualifies for a mortgage. If you claim these capital expenses as maintenance/repair it looks as if you are making LESS on the property. So, if you were to try to refi this property you might not qualify for the loan you want.

Thanks! This is super helpful. Is there somewhere I can look to reference the different depreciation schedules? I'd also be curious about a few things:

1. Repainting the interior of the house

2. Refinishing the hardwood floors

3. Replacing the screen door and screen windows.

0 Votes

New investor here!

We had to replace our refrigerator in our rental, due to the old one breaking. Is this a Capital expenditure or an operating expense?

I'm also wondering what the advantages are of classifying one as an operating expense vs. a capital expenditure. Isn't an operating expense better since it's deducted immediately rather than over 27.5 years as a depreciation expense?

2 Votes

Hey everyone!

We had to buy a new fridge for our rental property, which cost about $1000. I'm wondering if we should get the Lowe's 3-year protection plan with it. It costs $150 and they deal with maintenance issue. Do you think it's worth it? Seems like not a lot could go wrong with a fridge in 3 years, but maybe I'm wrong.

If there's other appliance protection that's better/cheaper, I'm interested in hearing the options as well.

0 Votes

Providence, Rhode Island

Quote from @Lynn McGeein:

Just wanted to add that I also have a clause about no holes in cabinetry or doors, that it is not considered normal wear and tear, and they will be responsible for full amount of repair or replacement if they do. I've had them nail/tack pictures, calendars, artwork to side cabinets, back of island cabinets, doors. I usually provide a variety pack of command strips and those felt furniture leg things at move in to protect my floors. I also explain leaving a few minor nail holes is fine, but if they patch, themselves, they will be charged the full repair if it doesn't match the wall texture, ready to paint. I have my painter itemize extra charges so I can deduct from deposit.

Thanks Lynn!

Does the painter usually just patch up the holes after move out or do they repaint all the walls? Not sure what standard move-out procedure is to get the property rent-ready again.

0 Votes

Providence, Rhode Island

First time investors here!

When you have tenants sign a lease, do you include any rules about what they should hang on the walls?

For instance, do you say that they shouldn’t nail anything to the wall and only use command strips?

Or are holes after move-out just part of the cost of doing business?

0 Votes

Providence, Rhode Island

Quote from @Vadim F.:

Quote from @Marty Rogachefsky:

Quote from @Vadim F.:

Quote from @Marty Rogachefsky:

Quote from @Vadim F.:

Quote from @Marty Rogachefsky:

Quote from @Vadim F.:

Quote from @Marty Rogachefsky:

I purchased a SFH in Cleveland, Ohio and I'm having trouble renting it out. It's a 3 bed, 1 bath renting for $1100 in a C/B- neighborhood.
It could use some updating, but otherwise rentable. However, my property manager is having the hardest time finding a qualified tenant. I found one self-paying tenant with a 530 credit score and eviction history. Another is Section 8 and unemployed.
I’m open to Section 8, but my property manager says that the house won’t qualify and that it will need repairs such as:

Fresh paint in some areas
Garage door (garage is good, but door is missing)
Filled cracks in driveway
Power washing of outside
One New window (has very small hole)
Phone jack removed
Lawn mowed

I’m curious if this is all necessary for Section 8. I can understand some things, such as new window, but are cosmetic improvements such as paint and power washing really necessary for Section 8 approval?
Also, any general advice on finding a well-qualified renter or screening tenants would be appreciated. It’s been on the market for 30 days at this point and I’m worried that I’m not going to find someone to rent to.

Really curious what part of Cleveland this is because this does not sound like C/B class area. If you want to go the CMHA route, you will absolutely need to fix everything you have mentioned and there will be more on top of that.

I'm on Greenvale Rd, 44121. Right on the border of Euclid and South Euclid.
Appreciate the info here!

Based off a quick rental search I can see that the property needs some more work to get rent ready. Replace the blinds, get rid of the carpet, change out the light fixtures, and do a fresh coat of paint. The house looks really dark. Also the outside will need the shrubs to bet cut, a good power washing, etc.

Thanks! Do you think it's rentable without a stove or fridge? Only appliance is a dishwasher.

Yes, I don't provide appliances. If tenant breaks them you still have to fix them.....so have the tenant provide them. Also, I would personally get rid of the dishwasher as well, 1 less liability to worry about.

Thanks!

The pictures are actually a bit old. I've had:

-Blinds Changed

-Light fixtures changed

-Carpets steamed/cleaned

-Closet doors installed

Agree that the house looks kind of dark. Not sure what to do about that. Hoping that it will rent soon, because it's in a decent neighborhood.

Get new pictures uploaded and look into a new PMC. Agreed the area is decent and shouldn't have issues renting there.

Thanks! One more question.

I was looking at the Inspire HCV Form and there's a star next to "Primary Cooking Appliance Missing" and "Refrigerator is Missing." The start indicates "Affirmative Habitability Requirement per 24 CFR 5.703(d) and NSPIRE Final Rule"

Does that mean having a fridge and stove are requirements to qualify for Section 8?

0 Votes

Cleveland, Ohio