All Forum Posts by: Tom T.

@Yoana Yordanova

I live in Atlanta. I have been a self managing landlord for 20 years and I live pretty close to your area. Here is what I think.

1. This area is booming. There is little excuse for a vacancy.

2. I think your manager is failing you.

3. Most people around here believe paying for an application fee is a scam and they will not do it.

4. If I were you. I would find a more local manager.

5. I found some of my properties early on were break even or some months negative. Depreciation, the tax write off from my then high paying job had value.

Over time, rents increased and property value went up. Definitely not a get rich quick thing. I believe you have a good area so long term you will be fine.

Good luck! It's not as easy as some people think it is.

@Sam Booth

What will taxes be in 10 years? ours have doubled in the last 5-6...

I've contemplates selling and collecting what amounts to 10 years of profit at once. Being older makes the math look different.

Its good to have options

@Manny Vasquez

Buy for less. The interest is deductible.

@Dana Richardson

Be mindful of liability.

I would probably answer something like this.

Yes, they rented from me from x to y time frame. The lease was paid in full. No eviction required. House was kept fine. If they want more details, just say: I'm sorry thats all the detail I am willing to provide. If the press again, just repeat. Maybe they can read between the lines. You are being honest and said nothing to open yourself to liability.

Here is perhaps a different perspective. I have long term rentals but for many years I was only slightly cash flow positive and larger negative events put be back to break even and even a few negative years.

Here is the upside and how I changed my mindset. Tenants are buying me that house. Every month, I get closer. (yes it is a LONG term play) but, there is more. I get a pretty big tax break now (or then) Depreciation.  My down payment and rehab were my entry fees. I always did my best to keep those as low as possible. At the time I had a pretty good W2 job.

I am also getting slow, but steady appreciation (good area, good schools) and I am able to raise rents a few % per year....  Increasing cash flow, slowly but surely....

Fast forward 10-15-20 years...
Some houses are cash flowing like crazy now they are paid off. Others I re-financed to get cash. I sold a paid off house and put a big chunk of change in my account. Uncle Sam got a nice chunk too I might add. I could have gone the 1031 route but in the end, this was all about a retirement plan. I liked the diversity of real estate. I didn't want 100 doors. 10-12 was plenty for my plan.

There is some truth to economy of scale. 1 in my opinion is harder than 3-4. If you have 3-4 then if 1 is having problems the others can buoy the portfolio.  

It looks like you may have jumped the gun but no worries. Take it slow. I'd find another close by (LTR) so you can get some scale. Now you're wiser too.

Definitely a marathon, not a sprint. As long as you are not bleeding cash you should be able to buoy the ship pretty soon. 
Good luck and welcome to the game!
T

@David Chance

I know you want to sell but maybe consider a DSCR loan to take cash out. Loans are not taxable. Turn everything over to a management company. This strategy keeps you from being the boots on the ground landlord and gets you significant cash in hand. I'd build it so the profit is minimal and way offset with interest and depreciation. More tax deductions. Food for thought.

@Melissa Faraias

What specifically does this 4k cover? New carpet and paint could run close to that. Unless there were holes in the walls or something that looked obviously damaged by them, I could see the wear and tear defense being accurate. Did you have everything new when they moved in? Do you have those receipts? Do you have a video? of before and after? Landlording can be bad news from time to time

Turnover can be expensive.

Document everything. Video file before and after. Good luck!

From what it sounds like NY is a hard place to get a tenant out.  If that is the case I would recommend a conversation and perhaps a revision to the current lease.  I have had similar problems that I turned into opportunity.  

In my case, the renter got paid every Friday and like many renters had limited self control or something always came up.  So, we agreed and amended the lease to be paid every Friday afternoon / night.  In return for this convenience and my extra work in collections I raised the rent slightly.

Example: Current rent then was 1400/month.
We agreed to $370/per week. Paid on Friday night. 24 hour grace period. +$30 Late fee after that. I expect to be paid no later than Monday at 10pm
 Unless arrangements have been made in writing, by text, eviction process would begin that Wednesday if balance had not been paid in full.  

So, from then on I received a more steady income. I received $80 more per month and an additional $370 on the two months out of the year there are 5 weeks. They were never or rarely late ever again. 

@James Hamling

well said James!

I have been a landlord for 20 years. Stuff happens and we have to fix and adapt quickly. James is right.

If you think AC is bad.. just wait until a septic drain field needs replacing!

So, new landlord guy.

1. never tell a tenant you won't be renewing next time. You are inviting damage.

2. When problems happen, its okay to try and use a good reputable handyman BUT, if that fails you Must hire a local well known "expert" to prove you are doing all you can to repair the item.

3.

Consider what happens next if the tenant or someone has to be carried to the hospital for heat stroke...

What happens next is you will likely be sued.

4. If you want to be as cheap as possible maybe you buy and install 4 window units and offer the tenant to leave And get all their deposit back.

5. Know that as a landlord there are years where you lose money.

One year, I had to replace both an AC and the septic field... I knew the AC was on borrowed time but the septic field was a "suprise"..

6..Do unto others as you would have them do unto you.

Good luck, You will need it.

@Vincent Plant

Have a conversation.

If tenant gets paid every 2 weeks on Friday, how about we arrange the payments around those paydays.

If rent is 1000mo now. Id do 545 every other week.

Note, you will have 2 month of the year this happens 3 times.

You have to make ammendment to the current lease stating grace period and eviction begins verbiage .

If that is their issue, this plan solves the problem and you just raised the rent.

That is as long as they stick to the plan.