All Forum Posts by: Mike B.

 Thank you. 

So you wouldn’t evict them? 

Hello, Bigger Pockets community. I would appreciate some expert, experienced landlord advice from you all. 

This property was new when the tenant moved in three years ago. Shame on me for not doing a property inspection sooner. After three years I did a formal inspection and found all this oil. I hired a professional cleaning company but the stains aren't coming out. 

Questions: 

1. What should my expectations be regarding oil stains as a landlord? This is a newer $400,000 house in a nice suburb. 

2. What action would you take with the tenant? 

3. How can this be fixed? Concrete resurfacing or coatings? 

Thank you in advance.  

Thanks to everyone for the comments. I have some direction now and some ideas about what to do next. This Bigger Pockets form really is a big help. 

@Jordan Moorhead - We haven't considered monthly rental or Air B-N-B but maybe that is an option for us. 

@Michael Lyons - When I originally listed the property back in 2020 the market rent was $1850 and I rented it out just under the market rate at $1800. Before the tenant even moved in I noticed other houses were already going for $1900 to $1950. One year later, in early 2021 market rent was about $2000. So in early 2021, I sent the tenant a renewal offer at $1900. I thought raising $100 was the right thing to do as I didn't want to increase too fast. By the time the new rent went into effect, I started to see the professionally managed houses listed at $2200 to $2300.  

Now I see my tax estimate and I understand why rents increased so much. Luckily I've been very financially conservative so I'm still in good shape, but I never thought this would happen so quickly. 

We did buy two houses in the same suburban Austin neighborhood. We rented our primary and just bought a new house a few streets away. With all the growth each property has more than doubled in value already. It's really quite the turn of events for us. My wife also had a home before we married that we rented out. It also doubled before we sold it. I believe this is called the Nomad Investment Strategy.  

I feel like we just sleepily walked our way into becoming these unsophisticated investors that have made huge returns on accident. I married my wife in 2017 and we only had a net worth of $50,000. Now we are sitting on about $900,000 in equity. I'm considering selling our suburban Austin house and buying a multifamily or several SFR 45 minutes north of Austin in the Killeen/Temple area.

Alternatively, we could count ourselves lucky and just keep doing what we have already done. We could take a slow approach and continue with the Nomad Strategy. Convert our newest house into a rental and then buy a new primary again.




 

How do professionals analyze different rental markets for investment? Is there a standard way to review a remote rental market to determine if the area has good potential for investment? 

We have a rental home in suburban Austin that has increased from $230,000 to over $500,000 in the last 4 years. This is great but we are now running into cashflow problems due to the high property taxes. The home can rent for $2300 a month while I expect to pay $13,000 in property tax for 2022. 

There is a small metro area 45 minutes north of Austin that has what I believe has better potential for generating cash flow, but I want to properly analyze the market before selling our Austin house and buying in this other city. The other market is Killeen, Temple, and Belton. 

Where can I learn how to do a professional analysis of a market like this? Is there a good book I can read? 

Thank you all. I really appreciate the comments on this topic. 

Jerrell - We drove up to Jerrell yesterday to have a look around, and even though it's closer to Georgetown, we didn't care for the feel of the area. It's a small community with some of the homes built using low-quality materials. My concern is that over time those low-quality houses could cause a decline in the overall community. It may work if we could build a good quality house in the right location within Jerrell, but the builders won't sell to investors. 

Temple - I appreciated the comments above stating that there is a lot of infill area between Temple and Georgetown. I hadn't put much consideration into how much construction will probably occur between Jerrell and Georteown before anything moves up to Temple. I suppose it could really be many years before we start seeing spillover from Austin into the Killeen/Temple areas.

It may be a good time to take a pause. Two rental houses in two years is a good start. We can breathe and work on getting my w2 income situation improved before we do anything else. We can let this market calm down before taking the next step. 

Thank you all again for the discussion concerning this topic. I'm driving my wife crazy with this right now. :-) 

I need help understanding the Temple/Belton area. 

Some Background: We are still new at being landlords. I'm getting ready to rent my home to make our second SFR in Leander Texas. I'm only 35 minutes from Killeen/Temple area and can't help but feel like I'm missing out on an opportunity to redeploy our assets from Austin to an area that'll cash flow.

The Reson: I'm a government employee and need cash flow on anything that I buy. Most of these Austin properties are very expensive and need 40% down payments to break even. This Killeen/Temple area seems the only place nearby where 20% down can buy me something that works.

My thoughts on the Area: At first glance, Killeen and Temple honestly look like garbage cities that I wouldn't want to live anywhere near. However, I am starting to believe all the working-class people from the north Austin suburbs will be forced out by high rents and property taxes. If that holds true, I think they will need to live in Temple or Belton and commute down to north Austin. I'm not sure about Killeen itself. I think Temple/Belton is within an hour of anything in north Austin. 

Price Differences: If a worker can buy a house in Temple for $250,000 and drive 45 minutes south (to their job) into the Austin suburbs where houses start at $450,000 it just makes sense. If I'm working at a $15/hr to $20/hr job in north Austin Temple looks really nice. 

What am I missing? I am itching to sell/refi my suburban Austin rental and buy something to the north.