All Forum Posts by: Rhonda Wilson

We still have two investment properties in Oregon. We are thinking very seriously about selling and getting out. It's not just Senate Bill 608, it's the trend. It really seems as though the Oregon legislature is convinced that landlords are the problem with housing and not providers of housing. It's very frustrating. I mean, our average rent in Oregon is $800. We do feel that we provide a fair value for value received. I hate to see it change from a market driven to a legal driven housing system. 

Honestly, the heavy sales pitch without a lot of detail makes me more than hesitant.

As much as I like Dave R., he is a bit of a one-trick-pony for me. I'm glad that he's out there and I think that he helps a lot of people get out from under consumer and student loan debt. However, there is a world of difference between consumer debt and borrowing to obtain a wealth-building asset. And, I'm referring to an asset in the strictest Kiyosaki definition. That is, an asset is something which provides positive cash flow. If, and only if, an asset will provide cash flow well in excess of the expenses including the cost of financing, does it make financial sense. Most people who call in to Dave's show owe money on cars, student loans and beautiful homes. I would bet that almost everyone who became wealthy in this business used financing along the way. 

As others have said, mold like that is common in older structures. It happens because you get condensation on the sheathing especially when the roof is cold. More soffits to improve ventilation and thus decrease possible build-up of humidity in the attic is generally recommended. The attic and living areas are completely separate environments, therefore, mold in the attic does not present a health risk to your tenants as far as I know. 

It's hard to give an exact answer without seeing the exact wording of whatever lease contract the tenants signed. In general, if they signed a 12-month lease, that is a contract and they are legally obligated to fulfill the terms of the contract. However, most states put limitations on the contract in favor of the tenant. For example, a break-lease fee in some states might be limited to 1 1/2 month's rent, for example. You need to find out the laws in your state. 

I have always had a policy of never charging more than the period of vacancy. For example, if a tenant breaks a lease on the first of the month and I move a new tenant in 3 weeks later, I charge the original tenant for 3 weeks. In your case, I would probably hold on to the deposit and try to re-rent the unit. If you re-rent quickly, you may be able to refund part of the deposit. At the very least, you should use the deposit to cover you for their failure to give you 30 days notice. 

Since you don't know the laws of your state, you may want to consult a lawyer.

I assume by now that people have read Brandon Hall's excellent article IRS Code Section 199A: How the New 20% Pass-Through Deduction Affects Investors

Generally speaking, if I'm getting applications at a good rate (more than 1 per week), then the asking rent is probably not too low. That is, people think that it's worth the asking rent. If applications are coming in at a blistering pace, then the rent might be too low.

Pre-screening can save you some time. However, I have found that a lot of people won't tell you about a disqualifying factor until you have shown them the unit. People probably think that they can "win you over" with their wonderfulness when you meet them in person. So often, even though I'll say "no pets" or "no pets over 25 lbs" someone will tell me that they have a very well behaved (funny how 99.9% of dogs are well behaved according to owners) labrador only after I've shown them the apartment. 

I guess what I'm saying is that showing the apartment is part of the cost of doing business. One suggestion I would make is to post a video walk-through. That, along with the address, gives potential tenants a lot of information. When I do that, most tenants have already decided whether they're going to apply before I show it to them.

Whether you have to send a letter is based on state law, I believe. If you charge them a screening fee, you generally have to send them a letter.

One more thing, I don't publish a minimum credit score for acceptance. You may get an applicant with a 621 credit score with a lot of collection activity and other problems. By publishing a credit score, you might be boxing yourself in. I prefer to post something more general like.

"Acceptance is based on the following criteria

• Income: at least three times rent
• Criminal background
• Credit score and history
• Rental history including prior eviction "

BTW, of all of these, prior eviction is the #1 item for which I will instantly reject. Evictions are a ton of work for a landlord to complete. If the tenant has an eviction, some investor probably spent _months_ getting rid of the person. You don't want that.

Really bad credit is a very strong indicator of whether the tenant will reliably pay the rent on time. When I started out, I made the mistake a couple of times of thinking that the credit score was due to "bad luck." The only exception is occasionally a person will have a bad credit score from a prior spouse whom they have divorced. 

Almost always, responsible people have good credit scores. Irresponsible people have low credit scores. 

I strongly suggest that you ignore any feeling about how nice they seem. I've done that too and lived to regret it. Please believe me, you will be dealing with a completely different person when they owe you rent. 

@Mary M.  Within a given region, what you're saying may be true. That is, property tax is proportional to value. Within Oregon your property taxed at $20k is probably worth twice as much as a building taxed at $10k. However, that "rule" goes away when you cross state lines with a different funding model. If skyrocketing property tax were to drive your property into unprofitability, would you be happy to pay it? There are places in New Jersey where property tax has increased 75% in one year. In Nevada, there are areas with a 38% increase. 

http://www.tax-rates.org/taxtables/property-tax-by-state