All Forum Posts by: Douglas B.

Do you use video surveillance of your property? Why or why not?

I would think it would help protect the tenants as well as the landlord (you'd know who's coming and going and if there's trouble brewing at your property). I've found some cheap units for $150 that are self install and video record several seconds of footage when the motion sensor is activated. It could be installed in the entryway outside the tenants unit but would serve to record who is coming and going and when. Also, it'd ensure that no one else is living in your units and no pets.

"Liability coverage can even pay for damages caused accidentally by you or your family members. For example, if your child accidentally throws a baseball through your neighbor's living room window, your liability insurance plan could cover the damages." ALLSTATE RENTERS INSURANCE

That came up as the first hit on google with the search: what does renters insurance cover. Here's some others

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Rental insurance coverage for your apartment or house follows you wherever you go, so if you accidentally break or damage someone else's property, your policy can help pay to replace it. ESURANCE RENTERS INSURANCE

Renters insurance also provides coverage for personal liability relating to injury sustained by any non-resident at your address, including payments for medical expenses – as well as litigation which may be brought against you. Liability insurance will also protect you in the event anyone brings a lawsuit against you for damage to another person’s property.INSWEB

Besides providing protection for your personal property, renters insurance also provides liability protection. That coverage extends to injuries and other damages visitors sustain while on your property as well as damage you may inadvertently cause to the building. For example, if a guest in your home falls and gets injured, a renters insurance policy would cover the costs of the medical bills as well as legal representation if you get sued. MAINSTREET.COM

These quotes are all directly from the top several hits on a quick google search. It seems unanimous. Renters insurance pays if the renter damages the rental unit.

@Tim Norris

That's my point exactly. If we have photo/video documentation of the move in condition plus have the tenant sign off on the known defects (few if any) at time of move in, we should have a pretty easy time documenting major damage in excess of normal wear and tear. It's unlikely that this would happen often, but if someone did heavy damage it would be worth it.

Additionally, the renters liability portion would also be another layer of protection between visitors and guests and the landlord. Injured parties would have to sue the renters policy in addition to the landlords insurance.

My low income renters don't have money available to pay for damages to my property. If I provide a low limit renters policy, the cost would be low but the protection value would be high.

Seems worth it to me.

@Roy N. , what did you find out from the insurance company?

I wonder what experienced sub30k landlords say about the assertion that low income tenants are more high maintenance and destructive. Maybe I'm naive, but I suspect it won't be as bad as people say.

How much hands on management time do you put in per unit per month?

How about you, @Lisa Phillips ?

I hear you. And caution is certainly warranted. I'm sure many hasty and unprepared landlords have crashed and burned.

I've been preparing to launch for the last two years. I've interviewed numerous landlords. The ones who seem to do well are careful managers and screen tenants well. The ones who struggle and seem to regret being landlords seem to struggle because they're tenants are out of control.

Joe, incorporating definitely doesn't protect you from the act of being sued. But it certainly reduces your personal liability, often very much so.

@Joel Owens who says:

"I like to keep my life stress free. Low income tenants come with a lot of stress even with great systems in place. They generally have lower education, multiple jobs to stay afloat, constant charity assistance, lives have constant twists and turns which is unstable as a long term tenant. Cash flow is perceived higher but greater eviction and turn frequency with higher re-rent tenant costs per time with increased damage to the units."

My question to experienced sub30k investors: is he right? Is there lost rent due to higher turnovers, damaged units, etc? Or is that just a myth? Or is it the result of lax management and tenant screening?

My novice opinion is that Joel's comments can be mediated with strict tenant screening and detailed, systematic management. I've run through this with my attorney recently. If a tenant is damaging the property or is not paying on time, I can evict and lose only one month rent plus damages plus vacancy time. My attorney charges $600 including all fees. The rent would be around $500-600. I'd keep the one month security deposit. Net loss one to two months rent.

I also believe that careful tenant screening will weed out 80+% of the bad apples right from the start. So I'm assuming that 80+% of the time I'm likely to get a solid tenant. If I need to evict, that $1000 loss is the cost of doing business and I've already factored that into my profit and loss projections. I'm ASSUMING from the start that I'll need to evict someone once every two years. But....I'll also very likely rebound and get a solid tenant with the next one. It's a numbers game people.

Think about it. You buy a duplex house for 30k. You CAREFULLY screen tenants. You now have an 80% chance of earning $250/month (net) off each tenant without much trouble. That's $500/month net. That's a very conservative number. Let's say that every once and a while you will lose $1000. Does that mean that you shouldn't be in a business that earns you $500net /month or $6000+ a year for life? That makes absolutely no sense.

Am I missing something here?

I think @David Beard has an excellent point here. Let's listen up and hear who can give us the long term numbers. I'm not sure about his second point, but I agree that the numbers should come in at 50% of gross rent potential after factoring in all expenses and losses over a 5+ year period.

that NOLO article was excellent. It also more specifically addresses the issue of multimember LLCs vs single member LLCs. (Apparently, it's very important that the extra members be more than just token members).

My attorney today recommended we proceed with simply our homeowners insurance policy plus a 1million umbrella liability policy with the same company. She also liked our idea about us providing renters insurance for our renters (and building the cost into the rent) vs "requiring" our tenants to have it (concerns of discrimination).