All Forum Posts by: Taylor Lacey

That is a good point. Making the connections early would at least help me gain a better understanding of what areas in the city I’d be interested in. How investor/landlord friendly is florida? Have you ever had experience with evictions?

Hey everyone,

I'm looking to relocate to a new city for a change of pace, but I am also looking to invest in smaller multifamily properties (1-4 units) in the same area.  The primary cities that I'm considering right now are Jacksonville, Charlotte, or the Raleigh/Durham area.  I can dig into these cities all day long on the internet, but because I'm going to be living there as well (not just out of state investing) I plan on visiting these cities before making a final choice.  Outside of meeting with an "investor friendly" agent while in each city, what other in-person tasks should I try to accomplish to gain a better understanding of the potential upside to the rental markets.

I have renovated and rented a multifamily property before so I'm not completely new to the game, but analyzing out of state farm areas is a relatively new path that I have yet to explore.  Additionally - if you have any referrals for quality agents in these areas, i'm all ears.

Any and all help is appreciated.

Thanks!

@Thomas S.

That is an interesting thought, but not all students are necessarily 18 years old, and some may not even have a guarantor that will sign for them. If I have a student that is 30 years old and has a history of evictions, that is something I'd certainly like to know regardless of if their parents are billionaires. Perhaps that is something that should be determined on a case by case basis...

When screening prospective tenants, specifically students in this case, what are your acceptance requirements for credit checks and 3x monthly income?  Acceptable criteria is fairly straightforward when it comes to past evictions and criminal history, but a large number of students don’t have jobs or credit.  When it comes to credit checks, would you check to make sure that they don’t have bad credit and that good or no credit is acceptable?  If the students don’t have a combined monthly income of 3x rent, do you require a cosigner?  I think this makes sense, but even if the student’s parents sign as a cosigner and meet the 3x income rule there is no guarantee they have sufficient net income left after all of their own bills/mortgages are paid to cover rent payments.

All advice is appreciated!

How do you verify that the tenant's dog is not one of the "dangerous breeds"?  Is it as simple as an eye test, or would you request vaccine records for the dog which should also identify the breed of the dog?

Other than the potential for physical property damage caused by the pet, what kind of liabilities does the landlord open themselves up to when allowing tenants with pets?  Specifically how liable is the landlord in the event that a tenant's dog bites someone?

Should the tenant be required to purchase renter's insurance that includes coverage for injuries or damage caused by dogs, or should the landlord ensure that their homeowner's insurance provides liability coverage for injuries caused by dogs?

I'd like to rent to tenant's with pets in my duplex, but I want to make sure I am legally covered before doing so!

Any advice is appreciated.

Hey BP!

When looking to buy a new rental property, there are all kinds of metrics that many are familiar with to analyze any given deal.  What I have found to be a little more challenging to grasp is determining when the right time is to sell a property.  There are a number of factors to consider when deciding whether to continue renting a property vs. dumping it such as future home appreciation, rent appreciation, closing costs, and potential alternative returns with the proceeds of the sale of the home.  I am in the middle of making this type assessment on a duplex, and I ran across a calculator that computes your net wealth over a specified period of time for both scenarios.

http://www.allpropertymanagement.com/resources/rent-or-sell.html#

I feel that the calculator can provide a pretty good estimate of your net wealth in both scenarios, but one issue I noticed with the calculator is that the max “After Tax Re-Investment Rate” is only 20%.  What are your thoughts on this approach?  Do you see any shortcomings that I may be missing?

Taylor

Thanks for the advice.  For as good of tenants as they have been, I'd hate to turn away potential tenants simply because I can't find enough past information on them (no news is typically good news).  The bigger concern to me would be the proof of income.

@Tyler Ansell When you run into tenants who have their parents pay rent for them, how do you proceed?  Do you have the parents co-sign and request proof of income from the parent?

I have been renting out a duplex to foreign national students from China who have been nothing but phenomenal over the past year and a half.  When I originally rented the house to the students, the only screening that I did was check their Visas because I needed the rental income immediately.  The tenants recently notified me that they will be vacating the property at the end of this year and that they have other foreign national friends that are interested from renting from me.  Now that I have the time and reserve funds to properly screen tenants, I am curious what the best approach is for someone that has never lived in the US.  Specific screening requirements that I am wondering about would be credit history, past landlord references, and criminal background check.  In addition, what is the best way to handle proof of income if the tenant is a full time student and has parents that pay the rent?

Again, this is assuming that the potential tenant does not have any previous time spent living in the United States.

All input is appreciated!

Thanks,

Taylor

Hey everyone,

I bought a duplex in April of 2014 with the intention of living in one of the units for at least 2 years while the other unit helped to cover the note.  This has worked very well for me, but now that I am approaching the 2 year mark in the next 6 months I am trying to figure out whether to sell the house and take the (small) amount of equity or rent out both units.  I had always planned to rent out both units once I moved out, but it looks as if I may have misjudged market rent in my area.  Here are a few numbers on the house:

Purchase Price: $301,000

Remaining Loan Balance:  $285,000

Improvements: $30,000

Improved Home Value: $340,000

Rental Income: ~$2,700/month for both units

P&I: $1390/month ($450 principal, $940 interest)

Taxes: $340/month

Insurance: $310/month

Repairs and Maintenance: $135/month

CapEx: $135/month

PMI: $205/month

Projected Appreciation: 1-2% per year

You'll notice I have not included the cost of a property manager in the numbers above as this would put me in the red every month.  Regardless of whether I hang on to the property or get rid of it, I plan on moving to another city and buying another MF property with the hopes of getting a around 15% cash-on-cash return with cash flow.  I feel like I've analyzed this scenario a million different ways, but I don't know which way sets me up for the best return in the future.  All input is appreciated!  Thanks!