All Forum Posts by: Bettina F.

Originally posted by @Mike Cumbie:

There are plenty of other things to consider such as percent assessment/special assessments and all sorts of Jazz. I will throw out a rough idea in Monroe county NY (Rochester)

An example which is quite common

Market value on that house is right in the $120,000 range

Geeze -- I pay $6K a year on an apartment building (commercial rate) assessed at $350,000 in Idaho.

No wonder people are fleeing New York.

If you are investing OOS, remember that you may be required to pay state income taxes on the profit you earn in that state.    For example, we initially lived in Washington (no state income tax, high property taxes) and had rental property in Idaho (6% state income tax, low property taxes).   We had to file and pay Idaho state income tax on the money earned in Idaho.  The tax man gets his pound of flesh, no matter what.

Check out what is involved in getting an LLC in Texas. In Idaho, it is fast, cheap and easy and can be done entirely on-line. If you set up an LLC, your LLC will need a tax ID number.

CraigsList in our area no longer provides good leads -- you would be inundated with unqualified applicants with sob stories.  If you have Class B or better, stick with Zillow, Trulia, Hotpads.  Be sure to watermark your photos with your business name and phone number to prevent your ad from being stolen. I  would avoid using "For Rent" signs because it is like a flashing neon sign for squatters and thieves. Set up a Simply Safe if your house is empty.

Get your rental criteria written out ahead of time -- helps avoid getting taken in by sob stories.   Get your screening methodology in place.   There was a delay when we set ours up because we needed an on site inspection.  I don't know if the on-line companies require this. 

Get your lease/rental agreement on your computer, with your company name and contact info.  This will allow you to have professional, customized documents that avoid written in names.

We have a "Landlord Account" set up with our utility.  Once he tenant calls to cancel, the electricity stays on in our name.  See if you can do this with your utility.   

Get a PO Box for your business address.  You do not want tenants showing up at your personal residence. 

Yes, I believe in purchasing.   I have had significant gains in equity with every house I have purchased.  I also believe in paying off your home ASAP, but with today's low interest rates, it might make sense to let the mortgage run.

I DO believe that most people buy way more house than is wise -- when those funds could be used more productively. People get into houses as status symbols -- and those gated communities can be killers in terms of setting social expectations. By the time they can afford their dream house, the kids are off to college and you have an aging couple rattling around in their mausoleum -- or as Dr. Housing Bubble puts it "the Taco Tuesday Baby Boomers in their tract mansions". But the house is only part of it -- then you need the car, the landscaper, the housekeeper, the HOA fees, the country club membership, the lavish wedding for your daughter .......

When all you really need for TRUE happiness is a little farm, a pick up truck, goats, a good dog and an APARTMENT BUILDING.

Your turn over costs are very high.  From what I read on this board, OOS turn key investors are getting hosed. Caveat Emptor.

Your PM is charging a premium over and above what the painters and flooring contractors are charging.  Also, with OOS properties managed by a PM, there is no incentive to economize.  For example, there is no incentive to do a fast and quick touch up paint over charging for repainting an entire room -- in fact this may not even be possible if no one kept records of the brand/color and finish of the original paint.    There is no incentive for the PM to inspect the properties (and charge tenants for damage ) mid tenancy.   There is no incentive for the PM to walk through with a can of spackle and do the "minor drywall repair" themselves.

My husband and I self manage class B apartments.  We do our own painting, fix drywall holes ourselves, repair our own closet doors, and replace kicked in door jambs.  None of this is rocket science  -- it is a fairly limited skill set, with a fast learning curve.    We can turnover an apartment quickly and cheaply.  We solved the trash out problem by presenting a written list to tenants at move in what we charge for dump runs, cleaning refrigerators and oven, etc.  Does your PM do this?  

Are you having your PM send you a video inspection every 6 months? 

For $8400, I would fly out there with a sleeping bag and my Home Depot card, rent a pick up and get to work.  

I would love to have some 1 bedroom units.  I have 2 bed/1 bath units.  I prefer renting to single people, due to less wear and tear on the apartments, as opposed to renting to families.  I am having a harder time finding singles whose income meets the 3 x rent rule. 

When we bought our building, we had some less than desirable inherited tenants whom we had to wait out their leases.  We decided only to do month to month rental agreements.   We thought that we would have higher turn over.  We have found that not to be true.

I do not believe that ignoring the letter would be the best course of action -- but providing the requested data is like be told to bring the rope to your own hanging.   

I would ask a lawyer.   IMO, much would depend if they were legally allowed to demand this information.  A response on your attorney's letterhead might make the assessor move on to an easier fishing spot.

We have a poorly insulated guest apartment on our property in Northern Idaho.  We  shut off the water to the building, leave all faucets open ( water will drain, but lines are not blown out), electricity off to hot water heater, oil filled electric radiators set to the * setting, in front of open cabinets to heat under the sinks.  We use three heaters in the apartment.  We have now done this for 7 years.  The only burst pipe we have had is when faucets were closed.  We have thermometers in the apartment and it stays about 40 degrees.  We use the heated living room of the guest apartment to store our paint and other LL supplies that would be ruined by freezing, so the heat is not a complete waste.  Come spring, we move the paint back to the unheated shop, clean and get the guest apartment back in shape.

If the unit is not carpeted, spring for a Rug Buddy heater.  They cost about $300.  They are electric heaters that go under room sized rugs, and act as a poor man's radiant floor heater.  Roll it up come springtime, and stash in a closet.

The cold snap will be gone in a week or two.  

Don't forget a 529 educational plan for the kids. When the kids get jobs, you can start a Roth IRA for the kiddos and contribute a max of their earnings. The ultimate answer is to vote for political candidates who believe in smaller government.