All Forum Posts by: Theresa W.

For me, it would be a comfort level about the deal you’re getting. If rental rates decrease due to a surplus of units because people are out of work, then your numbers have to be able to work with lower revenues. That’s fine if you’re getting a great deal, but if you’re already thin on margins, it’s a risk.

I still like real estate because people will always need a place to live, but it’s always good to analyze a variety of different scenarios that can negatively impact your return (e.g. 50% of projected rents? Big capex all in one year? Closure of a nearby college? a tenant that squats for 6 months with no rent?) and understand your tolerance.  How confident are you that you can weather a temporary (or multi-year) downturn and still be comfortable making payments and maintenance?

@Andrew Leung, It's tempting to try and make a family deal work, especially if it's off market or an exclusive.  If it were me, I'd pass on this one, because if you're planning to buy more properites in the future, this may put your debt to income in an undesirable range for future loans.  I'd also guess there's other deals out there to be had where you can owner occupy/house hack and get closer to the 1% rule.  Have you run the numbers for this area and know how this compares to other potential investment deals ?  Rather than tying up so many resources in one home, perhaps look for other deals that get you into a house hack situation, but still preserves your future potential for the second, third and fourth doors.  Best of luck!

@Adam Ferro Ah, my mistake - I thought you were going to hold the property long term. If you're flipping, then yes, pull it up after your contractors are done with higher up things like paint, etc.  My experience with vinyl over hardwood is that it's a real PITA to remove if the installers glued it down.  It might damage the wood in scraping up the vinyl, but IMO, it just builds more rustic character.  Congrats on the deal!

I've found durable flooring to be one of my best expenditures, but what type depends on the house.  If there's original wood plank flooring underneath a carpet that's trashed, then a light refinishing can be affordable, even if it's got some blemishes which just contribute to its "character".  Otherwise I like luxury vinyl plank in kitchens and baths which is a fast upgrade, easy install and most of the time, simple to fix if necessary.  I know some folks like carpet, but solid floors are simply easier to clean and present well to new tenants. 

What's not directly billed to the unit by the utility gets built in to the monthly rent by me.  Water/sewer service in my area can be liened by the jurisdiction for non-payment, so I still pay that myself, but take the past 12 months' average, knock off a small bit and add it into their lease on top of regular rent.  My goal is to pass on 100% of the bills.

From someone who tolerated inherited tenants for more than a year, I wish I could go back and would have given notice immediately.  The repairs that the units needed nickled and dimed me far longer than I should have allowed.  By the time I penalized myself with a few costly temporary fixes, I quickly got over feeling sorry for their situation.  The red flags coudn't be ignored.

Have empathy.  Be kind.  Give them two months notice that you won't be renewing, say you'll provide a great reference and give them their deposit in cash on move out day (if all is clean and good).  But, be firm in your resolve that this is first and foremost a business.  You can't do the updates while they are there.  They will land somewhere else that better suits their finances.

The updates allowed me to double the rent.  Wish I had done them earlier.

I respect @Thomas S. comments but would add a little different persepctive on this.  Easy Chair investors are definitely common, but Newbie landlords might simply be looking for that additional support behind their interactions with tenants and not know any better.  My screwups as a Newbie:

- Giving answers right away to tenant questions.  Always, always, tell them you'll get back to them or train them to email you with questions.  Most of the time if they call, I let the initial call go to voicemail so I can have time to digest their request.

- Giving my home address for rent payment. (yes, I did this..)  After forcing the hand of a habitually-late renter, stating if I needed to have it by x date, she drove 30 miles and rolled up in her pot smoke-filled hooptie to pay me in cash.  at my home.  in front of my daughter.  Lesson learned: Get a P.O. Box and set up everyone on electronic payments (I use ClearNow).  That P.O. Box is used on my leases.

- Not clearly outlining my expectations up front, before the lease signing.  Do you have to explicitly tell them not to pour fry oil down the drains? Yes.  Do you have to have that extra security for when their dog tears out your carpet? Yes.  Do you have to have that one-on-one conversations about CONSEQUENCES of their failure to follow your lease?  Yes.  I cannot emphasize this one enough.  It sets you up for when they fail, they already knew what to expect.  No emotion = you're not the bad guy = no conflict.

Conflict sucks and many of us were brought up to actively avoid it.  But once burned, it makes you a better, more confident landlord.  Go ahead, be the "PM" - no judgement here.  But know that after a little practice, you'll no longer need it.

@Micki M.  Will you PM me your insurance contact as well?  I could just email you, but why not mix it up and post here too?  Hope you are having fun!

Hey @Ryan Blankenheim, welcome to BP.  Another plug for coming to the next meetup - there's a different mix of folks every month and a ton of free advice.  Hope to see you there!

I'm the "owner", similar to Bryan. I convey that I'm quick to respond, but I also let them know that I expect certain things in return (rent on time, letting me know quickly about repairs, etc).  I do think they appreciate that there's someone that cares about their interests.  

After a few times of meeting with tenants, I had enough confidence in being able to control the outcome of my conversations with tenants.  Besides, I'm with Joseph - I'm a bad liar.  It's best to be up front and outline your expectations.  Then you don't have to worry about the little things, like letting people nickle and dime your time with petty compaints.  Stick to business.