All Forum Posts by: M.C. Nachtigal

Originally posted by @Brian Ploszay:

A way out of this is to reject tenants who have unexplained gaps in their residential or employment history.  Definitely reject any tenants who lie on their applications.  

I'm sure there are many ways "around" this if it becomes law. Targeting rental advertising to a smaller audience, requiring higher credit and income, things like that. But unfortunately that could also eliminate other potentially good renters that have had an unfortunate situation, but no criminal history. My hope would be that the city would start incentivizing landlords to accept less than stellar renters rather than passing law after law to make this particular small business all but impossible to conduct in a completely open, lawful manner. Don't get me started on the ADU situation in Seattle. 161 total applications last year in a house full of SFH and a massive housing shortage? My guess is in the 1000's of new ADU's actually went into effect sans permit because the permits are so expensive and impossible to qualify for. I'm hoping this will change sometime in 2018 with upcoming proposals in front of city council.

Originally posted by @Thomas S.:

@M.C. Nachtigal

@M.C. Nachtigal

"In Seattle I will never consider M2M"

A M2M expires at the end of every month. It is automatically renewed unless either side gives notice to terminate. The landlord can non renew any month you choose. 

 Nope, not in Seattle.  It's caused the Just Cause Eviction Ordinance, and specifies a specific list of reasons that a landlord can evict someone from a month to month lease.   Now, a one month lease is a different thing, but they you'd have to have the tenant re-sign every single month, or else it turns into a month to month if you continue to accept their rent.

https://www.seattle.gov/dpd/cs/groups/pan/@pan/documents/web_informational/dpdd016420.pdf

http://www.seattletimes.com/seattle-news/politics/seattle-set-to-prevent-landlords-from-considering-applicants-criminal-records/

In Seattle I will never consider M2M as the law states I can only evict for a short list of reasons including my family moving in, illegal activity, nonpayment of rent, etc.  But not because they are a PITA or something like that.  With a term lease in which the lease expires at the end of the term, at least I know I can decline to renew the lease.

Could you just say each unit is responsible for 1/3 the cost of the utilities, due with the following month's rent?  I'm surprised you have to have gas in your name.  In Seattle W/S/G has to be in property owner's name, but not electric or gas.

I just saw the latest proposed insanity, set to be voted on by the Seattle City Council next Monday.  I would be surprised if it does not pass.   This one would ban all criminal background checks by landlords of prospective tenants.  So within a year we have the law about deposit limits, requiring landlords to allow tenants to pay last month/deposit in 6 installments, then the First in Time law, requiring landlords to take the first applicant to meets their previously-specified qualifications, a proposal requiring landlords to justify any rent increases with documentation of their costs, and now this preventing landlords from checking or using criminal background as a selection criteria.  For me personally, the obvious answer is that I need to get out of this business.  However, since I've barely begun, that's not going to happen immediately.  Some say that simply by raising rent and/or credit score requirements, that will weed out a fair amount of the criminal risk.  How would you feel about this?  Do any other cities have restrictions like this?

I am far from experienced or professional as an investor in Seattle, but here's my .02. We owned a SFH in Rainier Beach, bought in 2009. It lost a lot of value, then came back up quite a lot by 2015, so we decided to look for an investment. After several months of looking for something that could be two units, we bought a SFH in Rainier View with an already-constructed MIL unit last June. We moved into the top floor unit and have tenants downstairs, as well as tenants at the big house. We are about to close on a 3rd property, this time a tiny house in West Seattle for us to live in (school preference for our kids). The rental income from the big house and both units of our current house will cover all but a few hundred of all 3 mortgages. I think we just got lucky with the purchase last year, and that's springboarding future opportunities.

Here's a decent overview of the issues:

http://www.kiro7.com/news/local/seattles-quiet-war-over-this-zoning-regulation-rages-on/514093303

I am following this closely as I own a SFH with a MIL unit which we are in the process of permitting.  We are already renting it out.  Most people I know with MIL units have not done the official permitting process, as it is fairly expensive (something like $3500 for our 860sf unit, apart from any work needed to make it pass).  However, when we bought our house last year with MIL already in place, someone made a complaint to the city on the day the real estate listing came out.  Fortunately we found out just before closing and negotiated a small price reduction to allow for the electrical work and permit costs.  We do not plan to live in this house forever, so the non-owner occupancy is pretty important.  However, as I said, most people I know with ADU's have not done the full permitting process anyway, and certainly continue to rent both units after moving on to other homes themselves.  The risk is being required to pay relocation costs of tenants if someone makes a complaint to the city.  I don't even understand why the complaint was made on our house, because it's practically surrounded by legal duplexes in a 7200sf zoned area, so it's not like there's any particular traffic congestion or parking shortages.  I think that was one of the big issues in the Queen Anne opponents' argument.

Unfortunately I am not only a Seattle landlord, but a fairly new one at that. This legislation is particularly challenging for small landlords, those who own a very small number of properties/units, since their risk on bad tenants can not be spread out over multiple units. I own a house that I intend to move back into in a few years, and want to rent in the meantime, as well as an ADU in my current home. Fortunately the ADU is exempt from both of these new regulations, so at least I'm good there. However, since I plan to re-occupy the larger house at some point, I am particularly motivated to prevent or minimize damage to it. It is also a larger house (with a large mortgage), so also more vulnerable to bad tenants who don't pay the rent. It has been a big learning experience this year for me in the ebb and flow of the rental market through the seasons, even in Seattle with such low overall vacancy. While as some have suggested, I could simply raise my rental criteria to credit score of 700 and 3x monthly rent, at times this could make it challenging for me to find a tenant, even at a break-even level with my mortgage payment. I am really unclear if this legislation allows me to state my criteria in advance (as above), but then make an exception for, say, a 650 credit score if I don't have a candidate who fully fits the criteria. Would the person with the 400 credit score potentially win a judgment against me because I accepted the higher (but not fully qualifying) score if the 400 applied first? Extrapolate the simple credit score example to other circumstances. I have never gotten a clear answer on this one, so I hope the lawsuit against the city is acceptable.