All Forum Posts by: Account Closed

jawsette,

In Florida using that security account as the basis for a secured loan would be a violation of of 83.49 and would leave you open to legal action, seasoning would make no difference. These are the tenant's funds.

You are not allowed to use those funds for any purpose and doing so would leave you open to being declared in violation of the law on all leases using that account. This would be considered
co-mingling of funds.

But this is Florida and other locale's laws and wording varies.

Here is what we do, we are at 100% occ in an area with 15% vacancy.

1- Get your price range for the unit size from current CraigslIst postings. Go below that rate. Remember 1 month vacancy is 8+% rent drop over a year lease, so be flexible.

2- Drop to one month security, so first and security. Do not go below that.

3- Rest of current month free with immediate occ possible.

4- Suspend payment for application and credit check, still run the checks, but you pay for them and remember to get them to sign application allowing you to run check.

5- Make sure your place is clean and presents well. If it needs paint, paint it. If it is dirty, clean it, including windows and window coverings.

6- Allow co-signers, parents, someone with good credit for really bad credit.

7- Cover lawn care yourself.

DO NOT:

1- Put in extra appliances.
2- Pay Utilities, this is an open wound
2- Allow partial payments or payment schedules

You really should check the local laws. In Florida, section 83.49 is required to be given with each lease.

It explains the rules for handling of security deposits.

The landlord has 15 days to return the security deposit if no claim is to be made against it. If a claim is to be made, the landlord has 30 days to send a detailed list of claims against the deposit by certified mail to the tenants forwarding address or last known address.

The tenant then has 15 days to respond in writing if they disagree with the claims at which time the procedure may be negotiated or move to a court, normally the landlord institutes a suit with legal fees.

If the tenant does not give a forwarding address then the legal address stipulated as such in the lease is used. It is the tenant's responsibility to set up a forwarding address not the landlords to find him they had better have set a forwarding address.

If the letter comes back undeliverable, case closed, the landlord may take the funds.

The landlord MAY NOT co-mingle those funds at any time including during this process, so using the funds as collateral is grounds for the whole process to be thrown out, the tenant gets their money back WITH legal fees and any penalties assigned by the court.

Read the local laws. In Florida you would never send a check unless there was no claim against it, and we do not allow this.

We have a 95$ to be retained from security deposit clause for cleaning which must be accepted by the tenant or they don't get the lease. This also means that WE ALWAYS HAVE 30 DAYS to do a full evaluation of damages and we always sent a certified letter.

An interesting sidebar here is the law, Florida, that the claim "must be sent by certified mail". Once it is sent the whole thing goes into limbo, if the tenant never responds and no receipt is received, the landlord is under no requirement to resend.

@Emilio R,

A good way to gauge your costs is to do what we did. Go onto Criagslist and post a job in the "gigs: labor" area, say 1200 sq feet of tile. and wait for the estimates.

Also call HD and Lowes and see what they are charging for installation, here in Florida it is 1.99 a sq ft for tile.

I do not know how it varies in areas. But HD should be the absolute highest you even consider, and remember they use local contractors and take a cut, so locally you should be able to beat them by at least 25% for licensed and insured layers.

1.80 per sq ft of laminate is far more than the .68 + another say .07 a sq ft for mortar and grout that we just paid for tile. But tile is far more labor intensive and of course, far more durable.

Cherry is great for your own home but unthinkable for a rental.

Hi Jerod,

I don't look at any other flooring unless it is an emergency and I am out of town, then maybe some peel and stick vinyl tile until I can replace it on the next tenant move out. Hasn't happened since we went all tile.

As far as price, I look for the best closeout I can find where they have the quantity I need and the same die lot and normally a beige colored tile to go with the other materials below.

We use the same paint in all of our properties, Ultra Hide from Home Depot in an Antique White, I think it is 75 or so for a five gallon pail. We always have a big container around for touch ups, especially after a move out, and do not allow tenants to paint EVER!

They lose their security if they do; no smoking either, same forfeit clause in our leases.

We always use the same antique white Levelor vertical blinds in all units, the same antique white electric sockets, switches, and the over-sized socket and switch plates.

Together with the beige ceramic tile, the places look great, clean, the dark grout sets off the tile, and they wind up looking larger than they are, and hide dirt.

We are renovating a place now, a newly acquired three-bed two bath SFR, 1500 sq foot and we picked up 1650 sq. feet of 16 by 16 inch ceramic at Home Depot for .68 a sq foot.

We always buy an extra 10 % for breakage, cuts, etc and then anything over 2-3 cases of tile is returned to HD, they have always allowed that.

We do shop elsewhere, but HD had the quantity and same die-lot and a price too good to pass by.

The differences in ceramic do not justify the price differences in my opinion, often the more expensive ceramics have travertine finishes, pock marks, for texture. These tiles are herder to clean as dirt gets caught in the pock marks.

We don't use porcelain, they are too brittle and harder to cut, more breakage.

All ceramic tiles will chip, drop a heavy object on them and they will break, pour red wine on ceramic and leave it there for days and they will discolor a bit, but not usually bad enough to replace a tile, but if you have to, so be it, that's why you keep spares.

I really don't see enough difference between the price grades to justify it and have never replaced a tile floor as yet, some are 20 years old and still look great.

I am not saying you should choose the cheapest materials, you need a complete decorating scheme, that is neutral, easy on the eyes, and totally maintainable and durable. You want your prospects to love how clean the place is, and the lighter colors always make the place look brighter and bigger.

You also want to be able to bring a unit back to par cheaply after a move out. Always using the same paint and disallowing tenant painting, means you can tough-up rather than completely repaint.

I spent 350.00 on the faucet in my kitchen three-four years ago, it looked cool and sleek. It has already started to drip and the pull out handle doesn't sit quite right anymore.

I also have a 39.00 American Standard faucet in a bathroom, it is about the same age, and it is also beginning to show its age, but I don't feel like a schmuck when I look at it. Can't say the same about the kitchen one.

With a four unit building, I would take the same approach. Get a good color scheme, select the materials for durability and cost effectiveness, the faucet example, tile is the only thing that has stopped the flooring bleed for us.

Then do all units will the same materials, paint, tile, plumbing fixtures, window treatments, and electrical fixtures. When it comes time for maintenance, you will be way ahead of the game and you can reflect that in your rents, i.e., below your competition.

Shop the close-outs first, not last.

GL

One more thought, you are renovating a RENTAL unit. No matter how good the area, don't forget that.

Granite, hardwood or any other expensive renovating material is a waste of money bordering on insane and is a mistake many new landlords make.

A 50.00 faucet or a 300.00 faucet? Remember tenants will not take care of your investment. In ten years you will understand this and will never consider such things again.

Plan for the worst type of tenants and when you get better, great.

Renovate for low maintenance costs is a primary rule of rental rehab! This is not your home, it is a rental.

Due to the current economic situation, it is currently cheaper to put in tile then it has been in ten years. I am currently getting quotes for between 1 and 1.50 per sq foot and even Home Depot is down to 1.99.

None of the alternatives to tile will stand up to traffic and change of tenants as well. All of my units are now tile and it is a pleasure. The maintenance costs when changing tenants have dropped dramatically.

They look and are immaculate. If a tenant wants rugs let them put in throw area carpets and take them with them when they leave.

Wood floors and carpets are nightmares when a bad tenant gets in and often they have no money for damages so when they destroy the floors, you will be left holding the bill.

Tile is the best choice, especially if you are looking at the long term and it has not been this cheap in many years!

Recently I put an ad on Craigslist for insured tile layers and I received over 100 responses in a few days, most came in at 1.00 per sq foot.

Remember dark grout, hides dirt better, always assure the tile are from the same die lot, and always keep a box or two of spare tiles for the occasional chipped or broken tile replacement.

As far as liability for slips on wet floors, my leases have clauses to cover that, the tenant waives all rights to sue me or they don't get in, and I still carry liability insurance anyway.

In 20+ years, never had a problem.

Corey,
You really do need to speak with a tax accountant and get the laws as they pertain to depreciation, expenses, and tax implications.
Listening to non-licensed , non-practicing wanna-bes can get you into some serious trouble, or at least some serious losses, tax or otherwise, as well as lost oppurtunity.
That said, property taxes and mortgage-interest are legal expenses for a rental business.
How you handle depreciation depends on when the property went into service and should be thought out with a pro as you budget repairs and maintenance.
Should I capitalize this cost or expense it? These answers depend on your income situation, taxable gains/losses, your investment goals, etc., and until you fully understand the ramifications, should be discussed and planned with an accountant.

First time in years that the income tax refund period is not seeming to affect tenant quality.

Have been advertising a vacancy for a nice 2 bed/1 Bath for a month now, well below market rent, and great condition, not one decent application. Lots of "can we have the keys and we will pay the deposit over time".

No, make that not one application that is even close to decent. Looks like a multi-month vacancy at what is usually the best time to rent a place here.

Things do not appear to be improving at all, no new jobs, no new tenants..

There is very good reason to be cautious with a group of unrelated adults. They have always been my highest failure rate group as well as the highest damages group.

Unrelated single young males have been the worst, the last two have ended in evictions, both due to non-payment, one caused when one of the young men moved out, the other both just not paying.

They were also the worst damages group and the places required the most cleaning, re-painting and repair. They weren't trashed, just abused and not cleaned.

Luckily, I haven't had any in years, none has passed my background checks.

Unrelated young couples have been my next highest failure group, not married, this group has had a good number of lease breaks and one eviction for non-payment. I just had another failure with this group this month.

Married young couples have been no problem as yet for me, no evictions, no lease breakages, occasional late payments but every group has them.

A large group of unrelated adults, two+ I have never passed as yet due to bad credit, eviction history or criminal record for ANY of the applicants.

So, always do checks on all tenants for records, evictions, credit and make sure you get last month and security, not just security.

Make sure your lease is clear that if one moves out, his responsibility does not end and that a breakage will result in loss of security.

You have good reason to be cautious and I highly recommend trading carefully, legally, but very carefully.