All Forum Posts by: Mike B.

My primary residence will be converted to a rental on April 14th and then remain an investment property. Currently, I'm living in the house and doing small repairs to get the house ready. We usually use the standard deduction and do not itemize. Are the expenses to get the home ready for rental still deductible, as a business expense? Since I'm currently living in the home, I expect they are not deductible. 

I resurfaced the 2nd bathtub, Steam Cleaning Carpet, etc...
  

This is an interesting question. We live on the edge of Austin's outer suburbs and there is the opportunity to buy "estate homes" on 1 acre lots. Usually, these types of homes are gated sections within the larger master-planned communities. Within a year or two, I'd like to get one of these for my primary residence. I just don't know if an "estate home" would be a good future rental. We only have the two houses right now, and at this point, I'll need to make sure each house I buy can cashflow as a future rental.  

One other thing...I don't know how investors feel about this area, but from a pure livability standpoint, I love these neighborhoods. If the commute doesn't matter, these are great places to live. 

Rancho Sienna, Palmera Ridge, Santa Rita Ranch, Morningstar, Bar W Ranch, Bluffview, Larkspur

We are doing the same thing in Leander and it seems to be working for us. We do have a good landlord friend that is mentoring us during the process. His mentorship, along with these forums, has been a godsend. I recommend you find an experienced landlord (or trusted realtor) that can help with tenant screening. To start the process we did recast our primary mortgage lowering our payments about 50%. That gave us the ability to easily cashflow the property. 

There are some great master-planned communities in the NW Austin Suburbs if you can still find anything to buy. We bought to live in the house and didn't think of it as an investment. Prices have since skyrocketed. This year we built a 2800 sf house, about 3 miles from Leander Station, for $314,000 and it's already selling for the mid 400s. 

I do believe there will be some infrastructure improvements over the years in that area. I like the Ronald Regan corridor and hope we can get a 3rd house there. Maybe within a year or two.  

I finished reading the BiggerPockets guide to rental property management and the author said he likes to give his tenants a housewarming gift upon move in.

He said a shower curtain, soap, towel, roll of toilet paper, etc...

Hi reasoning is that many people don’t have those items on hand when they are finished unloading their moving truck and the first thing they really want to do is take a shower.

Thoughts? Is it a good idea to give a housewarming gift?

They all seem to be young professionals. #1 is more of a blue-collar worker/manager type. #2 is the young corporate professional that seems to be a bit guarded. I can't get a feeling for candidate number 2, but I can feel her professionalism thru the phone. #3 is just exactly what you described. A responsible young guy starting a business. 

Again I really like the idea of prepaid rent. In addition to the security deposit, he wants to prepay rent for 4 months. What is the industry standard? I think it's better to just have him pay the first and last month's rent. And then pay double security deposits.

So first time landlord here again. We had trouble finding good tenants earlier in the winter, so we pulled our listing off Zillow for a few weeks and then relisted our property yesterday with a 3% lower rent. I'm so amazed that how much bigger the response has been with just a small rent reduction and little warmer weather. Since last night we have 3 good candidates. I'm tempted to go with Candidate 3

Candidate 1 - Husband and wife relocated to Austin last year due to a promotion. Combined income about 50% above my minimum requirements. Asking for an 18-month lease. Meets all requirements

Candidate 2 - Unmarried couple. Both meet all requirements independently of one another, so combined income is at least 100% over the minimum. The primary applicant works for a large tech company. The secondary applicant owns a small business. 

Candidate 3 - A married couple with a baby. Started a successful pest control business. They have been in business for two years and are driving 3 hours a day from San Antonio to Austin. They want to relocate to be closer to their main business. His salary is 20% below my requirements, but he owns the business and his salary is set by himself. He wants to keep the salary low to reinvest in the main business. The business seems legit. Also, their home in San Antonio will become a rental when they move, so in theory, his income will be within my requirements prior to their move-in date. He has large cash reserves and is willing to prepay rent. His wife does not work. They have basically no debt with good credit. Also, they are willing to be a bit flexible with their move-in date, which is a big benefit to us. We are building a new home and if there are any delays, having the flexibility could prove useful. 

I didn't expect candidate #3 and am not sure how to proceed. Prepayment of rent sure does sound good to me. If I go with Candidate #3 I could actually pay off the rental house's mortgage, so my risk would be super low. 

What to do? 

@Brian Tome So to recap:

She had been living with family for the last three years, the previous landlord moved outside the country, now I find out she had $250,000 in unsecured debt with a below 600 credit score, he co-applicant just filed bankruptcy and they are in a relationship but both live in different states.

She came back and offered to provide a co-signer and I said no.

And I was ready to rent to them. Now I think they targeted me as an independent landlord.

I am going to refund their application fee. Since we didn’t even need to run a credit check or anything. 😌

@Brian Tome My wife fired me. Im not allowed to speak show the house to tenants anymore. :-)

Ok. I'm learning to say no really fast.