All Forum Posts by: Max Reynolds

Dan - my recommendation would be the following:

- Confirm with your insurance agent what exactly your price change in insurance will be so that you can better understand your monthly payments will be.

- Complete a rent survey yourself because that is way too big of a range. Check Zillow, apartments.com, Craigslist, and other marketing platforms to look up and see what is available for same number of bedrooms, similar SF, and similar renovations (excluding powerwalls, etc.). Call each listing to see what the leasing activity has been like and create a list of those properties to follow up with after it is leased to confirm what price it leased for.

- Vet each listing you call to see how active that agent/property manager is in the area to see if they are the most qualified to rent your house out for the highest price. I know you have already talked to other agents but see what those you call have to say about their pricing for your home and if the fair market rent you came to a conclusion on is feasible. Keep in mind that unless you are actually considering using the agent/property manager to market your home for a future sale or lease, they might be a "yes man" and be agreeable to get you off the phone if they feel they are providing free information with no opportunity to work with you.

- If you are at or close to a break even and are in the financial position to do so, I would hold onto the property. At such a low interest rate, majority of your payment is paying down principle. Additionally, you benefit from appreciation, depreciation, and other tax benefits that come along with owning real estate. No one has a crystal ball but IF rates drop next year, your home value might increase (don't know the supply/demand in your market) and if so, might be a better time to sell if you choose to.

- I am wary of CD's because you are typically locked in for extended periods of time and the return is not all that great. My savings account currently pays me 4.3% where as a CD I bought last year is only  4.5%. What if you come across a good deal on a property you want to buy but your funds are tied up in a CD? This happened to me and wished I had more liquid funds to put into the deal.

Now, I don't fully know your situation/market and can't give tax, financial or legal advice but this would be my real estate advice and personal opinion if I had the same situation here in San Diego.

Reach out with any questions about the San Diego market.

As mentioned above, the lease should state that if the tenant doesn't fulfill their lease term, they are responsible for reimbursing prorated commissions. That language is in the industry standard AIR lease that I use. $14k may sound like a lot but at my recommendation of 3% it should come out to about 1.5 months of rent. You could wait 1.5 months to see if another tenant comes along without a broker however in that price range the chances are more than often the tenant will have a broker helping them find a space and you run into the same situation at a later date. Then you also run the risk of the space sitting vacant for more than 1.5 months.

Hey Robert - this is standard in the commercial real estate space. Typically Landlord's hire a broker to represent them for marketing their vacancies with a 6% leasing fee. If a tenant comes along with a broker, that fee is split 50/50 (3% to each side). If the broker has brought you a quality tenant, that is of great value and I would compensate him. You could wait for a tenant to come along unrepresented to avoid this fee however most tenants do have broker's representing them and then you face one of your biggest expenses, vacancy. My recommendations would be that the fee is 3%, commission is only applicable to base rent (if a NNN lease), only applicable to the initial term (not renewals), and is paid 1/2 upon lease execution and 1/2 upon the tenant opening for business. Your lease should state that if the tenant doesn't fulfill their lease term, they are responsible for reimbursing prorated commissions. At lease signing, you get 1st month's rent + security deposit so you won't have to come out of pocket. As both a broker and owner of a commercial property, I would pay the leasing commission.

Wondering if anyone has done or knows if assuming a VA loan as a non-vet is feasible?