All Forum Posts by: Nicholas Bolcon

@Steve Vaughan and @Nathan Gesner Thanks for your advice, this is good I think I have a clearer picture of what to ask of them now.

Nathan I'm a little worried about leaving it empty for a month too but its been on the market for over a month now and this is the first person who applied that didn't immediately say they found something else once we started running their application.  Possibly a discussion for another thread but this is my first rental property.  I think a few mistakes were made by me and my partner.  I think we over-judged the area based on streets not too far away but still over-judged the street the house is on.  Its not a slum by any means but we are definitely pushing the rent for the area.  It's also a 2-bed but its a big 2-bed (1100 sqft, which is this area is usually a 3-bed) and I think to get top dollar based on the square footage rather than the number of bedrooms it takes a certain tenant.

In any case I have had almost no quality applicants and plenty of people show up and don't apply (I think my qualifications list on the application scares a lot of people away but its pretty standard).  The only quality applicant found another place a day after handing in her application and one or two others who I would like to have applied ended up finding other places.  Other people who have applied have credit scores in the 400's multiple accounts in collections/delinquent, felony, multiple pets, etc.  At this point this applicant has been super timely when she has setup somewhere to meet, meets the requirements, has been working in the area for years, no pets, etc.  Given my luck so far I do not want to hold out that someone will have better qualifications maybe want to move in May 1st (less than a week away) or the 15th.  This will also give me the chance to try and get most of the work done to the other side of the duplex without disturbing a tenant.

Hello BP, as always your input is appreciated.

To start I'm in RI in case anyone has familiarity with the local laws.  

I had applicants that passed my screening finally. They can't move in until June 1st which I think is reasonable for giving notice and not renewing their old lease. But of course that means I won't have it on the market for a month before they move in. Should I immediately have them sign a lease to start on June 1st and collect security deposit? Or should I get a holding Deposit equal to the security deposit (which is also one months rent)? 

I'm wondering which protects me best. RI law says security deposit can't be deducted from for future unpaid rent. I'm not sure what that means in the case of breach of lease and never moving in. 

Any advice is appreciated!

Hello BP,

 I am currently in the process of accepting applications from potential tenants for my first rental property.  One thing I had not considered was co-signers.  Someone just applied who does not meet our requirements but suggested her parents could co-sign.  Obviously I would have her parents fill out an application, run a credit and background check, employment verification, etc.

My question is what happens if I do end up accepting someone with a co-signer and the rent is late.  Do I contact both the tenant and co-signer for it?  I'm just trying to anticipate what could go wrong.  Any advice or experience with it would be welcome.

unfortunately not yet. I don't think the budget gets decided until late June so I believe that's when the new rates come out. Although there might be some idea a bit before the budget actually gets approved.

@Mark Whitted I am thinking the same thing.  I first started being interested in rental real estate by listening to Clayton's podcast.  And I will say I think he had some sound advice on there.  But I started to notice that the podcasts were solely geared towards his strategy and his turnkey company.  He would insult all other models for investment.  Whereas when I started listening to the BP podcast they were much more open to a huge variety of strategies.  It made Clayton's seem a bit fishy.  I looked at his turnkey website (this was 6-9 months ago) and a few quick Google searches led me to BP forum complaints about him.  For anyone still using him today it only takes a very brief search to start uncovering the dirt.  2 years ago it probably wasn't so obvious.  I am glad I did not fall into the trap.

@Anthony Thompson I think the assessment is actually near market value (maybe a bit under as you mentioned).  The last time they did a re-evaluation was 2012.  And looking at it the previous assessment was very low.  It's more that the rate (especially for non-owner occupied) is so high that this drastic of an increase so quickly could result in a huge change from one year to the next (provided rates stay the same).

It's something I wasn't really anticipating.  I think, being young, I am used to seeing low valuations because of how quickly the market has gone up in the last few years.  It's something to look out for in the future I suppose.

@Anthony Thompson Thank you for the detail and recommendation.  I don't think we find out the new rate until July, but I was thinking the same exact thing.  I have my fingers crossed that it ends up that the rate decreases significantly, given that they should have a ton more revenue coming in than what the last budget was to run the town.  But, you still never know, in my minor experience with local politics its always a toss-up, and it always seems that rates go up and not down in RI.

Glad to know I'm not the only one in this boat but it would certainly put a very big damper on my first investment if the worst case does come to pass.

Are there any investors in West Warwick, RI that just received their new property evaluation?  I bought a duplex in December and just got a notice about the new assessed value.  They doubled the assessed value on the structure, an increase of about $70k.  Since I am paying the non-owner occupied rate, I am looking at a potential increase of about $2700 a year if the rates stay the same.  To me this is a huge increase, I know we should count on taxes to increase, but I was thinking in the neighborhood of maybe a $500 increase occasionally?

Based on my numbers it won't sink me (if my numbers are right) and I will still have positive cash-flow, but it really turns it from a seemingly decent first rental property to something not really worth the time and money I am putting into it.  Selling isn't really a good option right now since I think I over-paid a little because I underestimated the amount of work it needed (rookie mistake I know, I'm learning from it) so I haven't increased to value enough to cover my initial investment and paying a relator commission.  Any thoughts from people in similar situations?

Painting lines on a dirt lot where it snows quite a bit won't work.  But maybe you could divide it by anchoring 4X4's to ground or some sort of raised markers on the edge of the lot.  While tenant disputes with each other are not your problem, dividing the parking up may make everyone's life easier even with new tenants in the future.

@Valerie Smith I have helped my friend paint his kitchen cabinets before and they really do look nice.  Not for a flip maybe but good for a rental.  Also in the process of painting over old laminate countertops right now with a kit that Amazon or home depot sells for like $75 for 35 sqft.  Maybe I can upload some pictures when it is done.  So far it looks perfectly fine for a B-class rental, pretty close to a new laminate.

@Kay Mckinley @Bill Buzzell they sell a cheap jig at Home depot for putting on knobs and pulls.  Less than $10 I think.  I used it last year to put hardware on the cabinets in my primary residence.