All Forum Posts by: Wes Brand

I'd never do carpet in a rental. You'll need to replace it way too frequently. 

I'd do it, but that's what I did when I went to college (in a SFH) students will be harder on the property than non students, but they'll also want to only do term leases, so you'll have more of a chance to deal with problems. Make sure you know the student body you'll be renting to -- Berekely is going to be very different from Arizona State. Qualify the parents the same way you qualify the kids, they're likely the ones who are going to be covering damage, and make sure it's someone who has 'something to lose' so you can go after them for missed rent. Don't take any chances with anything you're not comfortable giving up: if your lease says the rent is 700/mo payable on the first, then you get 700 on the first or they're out. If you say 'quiet hours are from 10-10" then those are the quiet hours. If you're flexible with them you'll get taken advantage of.

@DG A. Be aware that when you move out the unit becomes subject to rent control in Oakland, which means "set the prices where you're happy BEFORE you move out". it's reasonable, I'd try to get closer to lake merritt or a bart station if I were you. If you're willing to put up with a rougher neighborhood there are places near fruitvale and coliseum that would be cashflow positive from day one (but they're rough areas and might not appreciate). You can also do a decent job with a large SFH near one of the west oakland bart stops, something a rougher area where you rent rooms on airbnb. Most things in west oakland near bart are going to be appreciating.

Also, if you have income but low-ish reserves, make sure you check out poppyloan. 

@Account Closed I see. A picture might help if you can post one -- people may be able to give you some tips to improve the curb appeal. Whatever you do I'd recommend disclosing it up front with a structural engineer's report saying "this is structurally sound". That way buyers aren't surprised when the inspection comes back and says it's leaning. You might get less interest, but it's better than getting under contract and having buyers walk because of it.

@Francis A. List it for 15% more than you're currently thinking and see how many bites you get. If you get a lot, you're under market already. If you don't get enough bites quick enough, slowly drop the price (go to 10% over, etc), to figure out how much they're actually overpaying. Counter with whatever makes the risk you end up way under rents worthwhile. 4 years is a *long* time to hold a rental without changing the price, I'd want something more like 20-25% if I was going to even consider it. I'd also want some pretty heavy penalties if they break the lease early.

The handle sticking on a toilet would majorly increase your water bill. Replace the flusher assembly, they're cheap enough where it's not worth messing around with.

@Bobby Gupta What are you looking for? That will make a big difference in the answer to "is this a good investment?"

Is it worth trying to hide? Any competent home inspector is going to notice the lean, and at that point you'll be under contract with a buyer who wants a discount or wants to back out because of potential foundational issues.

If you don't own the deed and funds haven't been disbursed, where are your carrying costs of 57/day coming from? If you do, then yes, your title insurance should cover it, presumably under the undiscovered encumbrances clause. You'll have to check your policy for the details.

You need to learn the market you're investing in. When there's a down year or 5, how long does it take prices to recover? When they recover how long until they double the previous high? Previous low? How much data do you have about the specific neighborhood / property? (say your property has a unique view that the others in the area don't, so your property goes up by 7%/year while others are only 5%/year) Ideally you want this data going back 30 or 40 years. When prices go up, what happens to rents? Do they track home prices, do they stay flat? 

For example, in the Lake Tahoe market prices can double or triple and rents stay relatively flat at 700/800 per bed for 2+ beds. Why? Well, most people buying in the area are buying for a 2nd home/vacation home. Most renters are short term renters for the winter season, so you don't have the typical fight between "I could rent for 1500/mo or buy for 300k" -- the people buying are interested in 800k+ properties, the people renting are interested in 800/bd or less because they're making minimum wage at a ski resort and can't afford more, and don't plan to stay in the area long term. There are specific exceptions to this, but the ratio there is pretty skewed because of the particular market dynamics (vacation destination with relatively few long term residents).