All Forum Posts by: Amy A.

I'm not clear, are you looking for somebody to rent a room while you live there or the whole house?

I'd leave out the bar-hopper comment, you might attract excessive partiers who skip work and can't pay their rent.

Also, it's good that you mention a background check, but you need to list how much that will cost them. You don't want to pay for it or people will lie and waste your money.

Overall, you make it sound very inviting!

I think a 1:3 ratio is best, but in my area a lot of renters do not meet this requirement. Do you use this same ratio when utilities are included with the rent?

If you block the cold air return, your furnace could overheat and crack your heat exchanger. If it's a newer furnace, it might simply shut off if it overheats and you'll have cold tenants. The way I fixed this in one of my buildings was to open the return up to the cellar. Sure, the heat distribution is less even, but no complaints so far! Perhaps you could try this if you have to block the vent due to noise and privacy issues.

I used to work at the zoo near you! It was good prep for being a landlady. Welcome!

If you are remodeling the units you are probably adding modern low-flow toilets and faucets. If the well was adequate for two units in the past, it will probably be more so now. Tell the tenants to be careful - don't do excessive laundry or wash cars or fill a pool, especially late summer when the water table goes down a bit. If the well goes dry, don't panic as it will probably re-fill overnight. We have many dug wells where I live. I would only drill a well if there were repeated contamination or if it frequently went dry even with tenants trying to conserve.

Here is what my husband and I did with around $200,000 to invest in Maine. He works full time as an engineer, so most of the responsibility was mine.

In 2006, the first thing I did was purchase books - "Landlording" and a book about cash flow by Frank Gallinelli. Then I found a real estate agent who would send me every 4+ unit multifamily listing in the Lewiston and Auburn, Maine, areas. He sent me the income and expense information, if any. I designed a spreadsheet to analyze the data so I could tell what's typical for the area vs. what's BS. I purchased a 5 unit building with a cap rate of about 11% for cash and got a line of credit on it. I immediately had to evict a tenant and remodel his unit. I went to court, didn't hire a lawyer, and got him out. Felt really sorry for him but I couldn't spend my hard-earned money supporting a 50 year old drunk when I have children to raise. My husband and I did most of the work ourselves. I have never worked so hard in my life, except on the farm as a teenager.

Once that building was up to snuff, we bought a second 5 unit using the same analysis. We had a commercial loan at 7% interest. The day of closing I lost the best tenant who had gotten beat up by the druggies living across the street. Two of the other units were occupied by crazy women who were always fighting and had dogs. One of the units had been trashed and needed remodeling, which we did ourselves. More work and emotional torture by tenants. I became an adult.

After dealing with this for 2 years, I thought I was done with rentals. I started flipping properties using my line of credit and really liked that. However, I was too reliant on one contractor and he became slow and sloppy, costing me money. In Maine, we have a very short selling season and it's important to have houses ready for spring. It's very frustrating to have your money tied up when deals are passing you by.

While we were flipping houses, our tenant base improved and we started enjoying the cash flow. We remodeled every unit and attracted better tenants. I decided to let units sit empty rather than rent to people I felt were unqualified. We still had occasional problems, but hired out most of the remodeling work, which eased our stress. I even started small claims court proceedings against one destructo-tenant and recovered most of my loss from her! We realized that we like the relatively steady income from multi-units rather than the feast or famine of flips. Also, more flippers are entering the market, driving up prices of auction properties so there's not enough profit. We are now under contract to purchase 9 more units in Lewiston. My husband quit his job and started his own mechanical engineering company. The positive cash flow from these units will not make us rich, but we won't starve while my husband can pursue his goals.

The bottom line is that you have to be prepared to WORK. I do not have a 9 to 5 job, which helps us greatly in finding flip deals and showing properties to tenants. Keep enough money in savings for emergencies plus living expenses. Do the math on your investments, then do it again!

If you ever want to stop by and chat, I live pretty close to I95 Auburn exit and we could get coffee. Heck, maybe I'll find you a deal in your area.

Hi Folks,

Does anybody use preliminary applications before showing apartments? I find that I waste a lot of time with people before finding out they aren't qualified. I have created a one page form that I can send to all Craigslist inquiries to gather basic information before proceeding. They can fill in the blanks and don't even need to print it. Do you think applicants will balk at this, since they've only seen photos of the apartments? My response would be that, for my safety, I need to know exactly who I'm meeting at the apartment. Craigslist now anonymizes email addresses of respondents, so I often have no information about people who request showings. I do not ask for SS#s or any questions that would not comply with fair housing (somebody in my state recently got slammed by Fair Housing for asking # children on their application).

Do you think this is a good idea?

I think open houses work where there's a strong rental market. Back in the late 90's there was a rental shortage in California and my husband and I found an apartment via open house. Now we own apartments in Auburn, Maine, where the market is not nearly as strong as in Portland. However, from one Craigslist ad I had so many inquiries that I let them all know I'd have a Saturday open house. They must not have liked the idea of competition, because nobody showed up!

Here's an update: He had to admit that it's not in the regulations so he can't require it! When somebody tells you "no" you can't just take it at face value.

To answer your question, yes, it can be difficult to find reliable tenants. My properties are in good condition but not in the best areas so my vacancy rate is 7 to 10% since I'm picky about who I rent to. Once I started posting in my advertisements that tenants must pass a criminal background screening, the quantity of applicants went down but the quality went up. Also, since I made one building "smoke-free" I've had fewer problem tenants there. Be prepared to deal with bad tenants when you buy your first building. Investors don't usually sell buildings with good tenants around here. Lenders like to see the building fully occupied, but I'd rather buy a vacant building and fill it with tenants who I've screened. Of course, vacant buildings around here have usually had their copper stolen!