All Forum Posts by: Kenny Tan

Don't DIY sizing by using rule-of-thumb. Most novice guess then they think, "I'll just make get the  bigger one to be safe. BAD (cost, noise, comfort, energy).  My duplex only needed 3 ton, but pre owner installed 5 tons. :-(

I tend to side with Tom in that the brand is not the deal-breaker. Trane (Nothing stops a trane) cost more than a Goodman, even for replacement parts that are fairly generic like flame sensors. It is true that the Trane is superior quality, but they fail too. One of my tenant a few years back, ran the AC/heat/fan almost continuously 365days a year even when she is at work, due to her lovely cats. That unit deteriorated rapidly developed a cracked condenser not worth fixing. Versus the other side of the duplex where frugal family hardly used the system, almost no wear. So I wouldn't spend a lot more on a brand just for slightly higher reliability. Too many random variables.

You'd be better off finding a reliable, honest repairman. Many so called hvac problems are caused by minor, small cost items or just adjustment. Too many techs replace a motor when a $20 cap is bad.

Thank you, Max, Derek, Annah and Amy!

I knew the correct answer is legally it would not be worth it to evict, especially there is only 3 months until the lease expires. I was under the impression that if the landlord did not take action on an issue like keeping a dog without asking, after a few months, it becomes conditionally accepted and I forfeit the right to dispute.

Anyway, a new development. I went by yesterday to fix a furnace problem since tenant complained heater did not work. I found nothing really wrong, maybe operator error with the thermostat or just scatterbrain. So I got it working - I haven't seen the interior for years since I remodeled in 2011. I was pleasantly surprised at how well they have taken care of the place. They take shoes off and the bathroom is clean. They said when the dog was a puppy it chewed up the screen door but they replaced it. The dog seems well behaved and mostly kept outdoor. They told me they want to continue to lease. So I had a change in heart, made them give a $500 pet deposit and will raise the rent to nearer market rate (but still below) come next lease renewal. I will get a more thorough lease agreement and add some conditions such as keep the front yard free of junk and interior walk-through to ensure the dog doesn't do any significant damage.

Hi folks, one of my 2 rentals is long term. They did not skip rent so far, but always late. I raised the rent little, just because I liked them with kids and all. Rent jumped in Sacramento last few years, rent is now at least $300 below market rate. So for several years they enjoyed living at a nice neighborhood at below market rent. For that you'd think the tenant would be grateful. No - last month I dropped by and found a medium sized dog kept there so I confronted tenant and he apologized. Said he will pay pet deposit, etc. I am quite upset, they did not hold up their side of the agreement. There were so other issues, such as junk on the front yard. I feel betrayed, I dont trust them - I want them gone.

The lease ends in spring 2018. I can certainly wait it out. But what if I evict them asap due to keeping the dog. However, I did not specifically put down "no pets" in lease agreement. I used a very simple one page contract that did not mention pets.

Do I have valid grounds to evict since they violated the terms of lease?

Thank you for your replies.

Wes, your insights are much appreciated. You know this area well. The duplex is in Greenhaven, five miles from downtown and in a good school district. I recently saw a graph of new housing starts at 800K units, when the norm would be about 1,100K. It will take many years to catch up to demand at this rate. (Rolling 12 month period). While California gained 3.1 million people since 2007. We are way under building SFHs. The Sacramento region is positioned well for the foreseeable future. I keep seeing Sac ranked in the top 10 nation wide. It is like we stepped up the basis since the last recession. From what I see, they are just not building entry level homes anymore. Rent really has no where to go but up. If history is a guide, the nicer, established locations close to city center will command a rent premium.

I have been thinking of selling a rental duplex in Sacramento. Owned since 1999. Market is strong for seller, almost 0 inventory in area for a few weeks. One tenant is moving out in June, the other is staying. My rent is below market, so I can bring it up to $1400 each side. That would provide 1200 cash after all expenses, including maintenance. I have 150K mortgage. Sell price 525K. May have 250K cap gain and dreaded depreciation recapture.

I do not want to do 1031 exchange. I want to divest away from day2day rental involvement. Don't like DST, TIC... too much management fees, tie up $ too long. My plan was to take the cap gain tax hit and move harvest the equity to more liquid equity investments such as diversified index and low fee market funds.

One of the counterpoint to selling is rent in Sacramento can continue to go up while my mortgage is fixed. However, the sell price is looking attractive. I don't know if we are in bubble territory but it is ripe. The San Francisco Bay Area is cooling. 

With Trump's tax reform on the table, how do you think it may affect my sell decision  wrt Cap Gain tax changes?  

It may or may not pass and it may or may not happen in 2017. Any suggestions?

@Robert C.

Thank you. I do think of keeping the property and hire a good maintenance rep. But houses don’t get better with age and it’s never a good time for major repairs, (roof, HVAC…).

@Joel Owens

I am going to research NNN properties. But on the surface, it looks like tenant issues and long term leases.

@

Sage advise. 20 years ago I'd say buy more properties. Today, not so much. Plus, I am getting that gut feel the market top is near.

@

Thanks for your pointer, I will check out your book.