All Forum Posts by: Sharon Tzib

Taylor, Paula Pant just wrote an excellent blog on this topic:

http://www.biggerpockets.com/renewsblog/2013/07/24/adjust-rent-for-inflation/

Read the comments - lots of different opinions but will probably help you answer how you want to do things.

Did you just buy this building? What are the current rents being charged? Why do you feel you want to convert to one year leases? Also, typically with month-to-month tenants there is either a signed rental agreement in place and/or nothing at all - not sure what your situation is.

Sometimes with lower income units, month-to-month tenacies are used because it is much easier to get a tenant out (this allows either side, landlord or tenant, to give 30 days), and many times lower income tenants can be more problematic with not paying rent on time, following rules, etc., so landlords employ this strategy.

Just because you don't have a lease with a tenant, it does not mean that you can't raise their rent. Check your state law to find out how much notice you must give before raising the rent, and if there is a cap on the % you are allowed to raise at any given time. Also, make sure none of the tenants are Section 8 (although if they were, you'd probably have a lease), and I'll assume you're not in a rent control jurisdiction.

Lastly, if you feel a rent increase is warranted, be prepared you may lose tenants. You'll have to weigh the pros and cons of that.

If you do go the lease route, I would also take this opportunity to have them fill out a rental application to have on file as well, especially if you're a new owner, and especially if the old owner didn't have one. This kind of paperwork is extremely important in case a tenant ever decides to sue you.

Welcome Matt & Krista! Before you invest a dime, make sure you have adequate reserves set aside. Because you are a one income family, if anything were to happen to your wife's job, you would want to make sure you had at least 6-9 months of reserves set aside so you could make it through until another job was found. You also need a certain amount set aside for each property you purchase.

After you have adequate reserves, then you can start looking for property. You say that you want to focus on college students, so I would imagine that narrows your focus of area down significantly - a good thing if you are travellers. You didn't say, however, if you were wanting to buy single family homes or multi units.

If you choose the latter, the good news is it is much less competitive, so a good realtor could be looking out for what you want in your targeted area, and on those occasions when you're back in town, you can go look at what's available. Or, must the two of you always travel together? Or, how comfortable are you buying sight unseen?

This last strategy requires having someone on the ground that can send you excellent photos of the property and the surrounding neighbors. Of course, you will still hire a property inspector to make sure what you are buying is sound (because you are travelling, I wouldn't even consider buying a fixer, since as Aaron points out, managing contractors from afar is a huge challenge). You would also need a title company willing to do virtual transactions. With Hello Sign and such, these are becoming much more common (ask your realtor to find you one).

If you think having tenants is a challenge, having tenants that are also students is even more so. It is imperative that you have a property manager skilled in this niche before buying your first property. It is also imperative that anything you buy cash flows with a property manager's fees included. Buying a multi family should allow you to do that (I'd start with a 2-4 unit for your first one, which will allow you to use conventional financing).

So, before you start, get your reserves, identify your target area, develop your criteria list, interview and find a realtor and property manager, and then decide if you feel comfortable investing sight unseen or not, and go from there. I hope this has helped and good luck!

I wish you could do an Advanced Reply and still have the thread comments show (sometimes I forget all the points I want to make if I can't go back and look at the thread). Is there a wish list forum? Maybe I should be posting this there lol!

LOL Karen Margrave! There's some people on this forum that would do better to have no picture at all, as the ones they use do nothing to build trust and confidence. Remember folks, your picture is your first impression, and there are no do-overs!

Emmanuel Dufort you may want to keyword "Georgia" and see what investors pop up, and then perhaps reach out via a colleague request. Good luck!

One of BP's contributors, Ben Leybovich, has a new ebook out, "20 Ways to Buy an Investment Property with $2000 dollars or less." Here's his site:

http://justaskbenwhy.com/

You may not even have $2K but it gives you some very good ideas. Good luck!

Even tho you have two homes on one lot, what Joel is telling you is correct if you plan on renting them out. You need to find out what the zoning is in that area. Last thing you want to do is buy it and find out multi family isn't allowed.

Thanks Jon Holdman, let me know what you find.

And when I suggested visiting the competition, I would never suggest making an appointment with a landlord and wasting their time when you know darn well you aren't gonna lease it. Rather, I was suggesting attending any rental open houses, which are quite common these days. I should have been more specific.

Some more you're gonna see a lot:

ARV = After Repair Value
DOM = Days on the Market
SFR or SFH = Single Family Residence or House
MF or MFH = Multi Family or Multi Family Housing
ROI = Return on Investment
LTV = Loan to Value
P&I = Principal and Interest
COR = Cost of Repairs
REI = Real Estate Investing
REIA = Real Estate Investing Association

Hope these help!!

Welcome, Derrick! I'm an Indiana investor. Good luck!