All Forum Posts by: Sylvia B.

How Do You Harden Your Rentals?

"Too expensive? You're probably right. I suggest you continue looking for cheaper accommodations."

You're going to contact them 5 times in 5 weeks? That's crazy! Like Michael said, you would be the last person I'd sell to! And if you kept contacting me after I asked to be removed from your list, you shouldn't be surprised if I punched you in the nose if we ever met.

He's overcharging on the little things, so I'd be suspicious of the bigger charges. HVAC covers are 5 bucks, and all you have to do is unwrap and drop it in the hole. $25 each? Sheesh!

"A local family had a medical emergency and needed to move out of their own brand-new home due to possible environmental poisoning."

Wouldn't this same environmental poisoning prevent them from renting it to someone else? 

 Small town (2100 pop.) in MO

$400k here would buy a nice, large house on 60-80 acres. That's one reason we left CA in the 80's.

We do use the 1% rule as a guideline, but we also run the numbers one each one we consider. 

Some of our houses do not meet the rule, others greatly exceed it. We currently have 12 houses rented. Our average cost including rehab is just under $67k. Our average rent is currently $693/month. Generally speaking, our smaller, cheaper houses give us the biggest bang for the buck.

Well, now, the best answer I have is, "it depends."

Since we began investing in SFRs 8 years ago, we have owned 14 houses, all in the same small town. They all have different circumstances.

• 2/1 rented to one older couple for 2.5 years until we sold the house. Bought out the remainder of the lease.
• 3/1 bought in 2012 is still rented to the original tenant.
• 4/2.5 bought in 2013. 1st tenant rented 2 years, got their whole deposit back, 2nd tenant still there.
• Very small 2/1 bought 2014. 5th tenant just moved in. All previous tenants got most of deposit back.
• 3/1 bought in 2014. 1st tenant got 100% back, 2nd tenant 0, 3rd got a little back. 4th moved in Mar 1 this year.
• 4/2 bought in 2014. 1st tenant moved out June 30th, still owes about $100 for damages that exceeded deposit. 2nd tenant is the county sheriff, who expects to be there about 2 years while his house is being built.
• 3/1 bought in 2014. This one is currently for sale because we can't seem to keep tenants in it long term. We've had 7 different tenants in this one, 5 of whom left because they bought a house. We kept the full deposit on one, the rest got all or most back.
• Large 3/2 on 1 acre lot, bought in 2015. The 1st tenant stayed one year, left a broken window and lots of dirt. They got nothing back. The 2nd tenant is still there.
• 3/1.5 bought in 2016. 2 tenants in the first 2 years, both bought houses, both got their deposit back. Current tenant recently renewed for a third year.
• Large 3/2.5 bought in late 2016. 1st tenant stayed 1.5 years while building a house, got their whole deposit back. 2nd tenant is our preacher & family. We expect them to be there 5 to 10 years.
• 3/1.5 bought in 2017. 1st tenant inherited older couple, no deposit, left it it good shape. 2nd tenant just moved in March 1st.
• 4/2 bought late 2017. 1st tenant moved out in February and left a lot of damage. We billed them a little over $1100 for damages above their deposit, but we'll never collect. 2nd tenant expects to rent long term, or may buy the house from us.
• 3/2 bought early last year still has it's original tenant.
• 3/1.5 bought in June is a full gut job. We don't expect to have it ready to rent until next summer.

Early last month a sad event occurred in our small community of 2100. One of our tenants lost his battle with PTSD and shot himself.

It is hard to know what to do when something like that happens. He left a widow and 3 children.

But some people know what to do.

• The coroner went out of her way to make sure a cleaning company could get there the same day. (She gave the widow her contact information, and when the company she recommended couldn't get there for 2 days, she called another company herself, and got them there that night.) 
• The next day we saw the young man who occasionally does mowing for us mowing her yard, and we were told that others were helping as well. (It's a large yard, over an acre.)
  
• A couple of days later someone else started a Go Fund Me to cover funeral expenses.
  
  
• In less than a week, someone contacted me to see if they could pay the rent for August. I had the check in my hand on July 17th.
  
  
• Early last week someone else contacted me and said a couple of families were pooling money to pay the rent for September. They want it to be anonymous, and asked me to let the tenant know.

I love our small town.

In 2019 my cashflow averaged $435/month/house. My rents averaged $670/month.

2018 had a little more vacancy and some major repair expenses. Average cashflow was $310/month/house. Rents were a little lower, but I'm not sure what the average was.

I have no mortgage payments. Yearly expenses for taxes and insurance generally average out at 2 months rent.