(Topic ID: 257412)

Any landlords here? Please post tips and stories


By JohnnyPinball007

5 months ago



Topic Stats

  • 187 posts
  • 60 Pinsiders participating
  • Latest reply 10 days ago by JohnnyPinball007
  • Topic is favorited by 36 Pinsiders

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Topic poll

“Rental property, yes, no, or thinking about it?”

  • Hell no, I do not want the hassles 21 votes
    19%
  • I love my rental properties 38 votes
    35%
  • I have been thinking about doing that 21 votes
    19%
  • I used to and called it quits 28 votes
    26%

(Multiple choice - 108 votes by 107 Pinsiders)

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#1 5 months ago

Back when times were a tad rough with the 2008 recession, I had 3 mortgages on rental houses, a bad property manager, and I was almost ready to let stuff go.

Fast forward 11 years and I love my tenants I have now. I fired that sorry property manager long ago, and took over myself.

The big thing that has helped me is I have a great friend that has became a licensed real estate broker, and he is a better judge of character than me, and able to dig deep with background checks. When I have a vacant house he does all the work to find a awesome tenant, and he gets paid the first month in return. (and I take him out to eat).

Back when I started I did not want to manage my properties myself, mainly because I did not want to lose my freedom to travel. But now I just tell any new tenant: I have a job, and I check my phone at lunch, and when I get off work, so leave me a message. And now that I have been doing this a while I have people I can trust to go handle whatever repair needed and I do not have to be there.

And actually now my tenants have the #'s of the people I use, so I just get a call here and there from my repair friends anyway.

And no, I was not lucky enough to be able to jump on houses when they were dirt cheap, but I did buy bank owned properties that they had fixed up really well and was ready to just sell for whatever they could get.

As far as horror stories, that property manager cost me 15k on one house, and 17k on another, stupid stuff she did not pay attention to.

Anyway, tenants at 2 houses have been awesome for a long time now, and if they keep it up I may do a new will, and will them the house when I die.

And I have never once went up on anyone's rent. Now if they struggle to take care of the lawn, I will say for another x amount a month, I can have this done for you, and when that has happened they have loved the agreement we made.

The only time I ever raise rent is when the house is vacant I adjust up to the new market level.

Some of my friends started doing rental stuff after I did and we talk about tenants and problems and stuff. And the biggest thing is to use a real estate pro that you trust to find a great tenant to start with.

If you are already doing this and paying cash and all that hell yeah!

Me, I just do the 20% down 15 year mortgage and try to pay off in 7-8 years.

If the roof is bad at all, first thing I do is a nice looking metal roof that I will never have to replace again.

I know other property owners that first thing they do is replace all the plumbing.

When I was young I was making 10% interest on my savings, and I saved all I could to get that free money. Then interest rates went to nothing, and I never trusted stocks(I do have a uncle that bought Home Depot stocks right when they came out and he is well off now), but I always figured with stocks I would end up with a Enron or something.

Big thing for me, when I buy a house, I look at it close, and the area, and think: if I had to live in this house myself, would I be happy or not.

Long ago the first rental house I purchased had deer in the yard, small house, but I liked the woods and wildlife around there.

Even now when I go there I see deer, and just 5 minutes from me and I never see deer here.

And that is another big thing, I keep everything I invest in within a 5 minute drive. Makes my life super easy. Some friends started doing this and for some stupid reason because it was a deal have to drive sometimes almost a hour when there is a issue.

Anyway, if you can find the right house to buy, and the right people to help you with everything that comes up, and land a awesome tenant, rental houses are awesome. And 10 years ago I would have said rental houses suck and I want out, but only because I had a very bad property manager running things at the time when I did not want to.

#2 5 months ago

A old friend of mine who rented a lot of houses and apartment once told me. "I never saw a bad referral". Because if a landlord had a bad tenant, if he gave them a bad referral, he'd be stuck with them. So he always gave great referrals.

LTG : )

#3 5 months ago
Quoted from JohnnyPinball007:

Anyway, tenants at 2 houses have been awesome for a long time now, and if they keep it up I may do a new will, and will them the house when I die.

Holy!

Wish you were my landlord!

Out of interest, how much $$ are the houses in your area ... what sort of rent do you get?

Always interesting to compare ..

rd

#4 5 months ago

I don’t have houses, but I do have 4 doors as in a four plex.

My boys are mid/teens. They do all the grass and mowing. Nice way to get them cash.

I currently have 3 fantastic tenants and one mildly annoying tenant, but they all pay on time, I’m not even a stickler about that.

I’ve had my share of shitty tenants, but I’ve got them weeded out. I’m always fair and ask them how things are so I know what’s going on. The building is only 600 meters from my house so I can get there easily for matters.

One pays cash (I give him a small break on rent) and we’re both happy.

#5 5 months ago

There are several landlords on here, I expect this thread to expand a bit later today - they tend to sleep in lol.

My parents and grandparents owned rental houses but sold them by the time my brother, sister and I were born. My younger brother borrowed 3 grand off my dad when he was 19, flipped his first house and has been doing it for 30 years. He's the only one of us who didn't go to college. He's also the only one with a custom built house on a lake.

I became an accidental landlord when I was laid off in 2008. I moved in with my (now) wife since I was there 4 nights a week anyways. So I've been renting that house a little over 10 years. Had a couple tenants that weren't the best, but I've never been stiffed on rent or anything. Kept a couple security deposits to cover bills/repairs over the years, but for the most part I've had good tenants. One pair of girls stayed 6 years, another girl a couple years. My payment on it is about $650/mo all in, I rent it for 1k/month.

My wife's health took a downturn around 2008 also. She was eventually diagnosed with MS. She ended up losing her house in the 2008 collapse, along with her 401k and all her savings, trying to stay afloat. Her house went into foreclosure, and was eventually auctioned off at the annual tax auction. By that time (2011 or so) I had landed another job, and we were able to bid on the house (we were still living in it) and buy it back for $18k. She had owed approx $120k - the bank never tried to repossess it, they had already been paid off by the bailouts.

So when we finally bought our OWN house together 5 years ago, we started renting hers out. There's no mortgage, and we rent it for 1k/month. The same family has lived there since day 1, no problems. So the $ from that rental pretty much covers the mortgage on our new house.

She wants to flip a house next time to get some cash to remodel our new house. So we're always looking for another opportunity.

#6 5 months ago

Having the right management company can make a huge difference. My rental property is in a different state and have a great management company. They have done a lot of research on how to maximize your cash flow as an owner, while still being good to the renters (having terrible places just encourages people to move out and leave it empty, lowering your income). I plan on next year getting another rental property using the same management company (when I visited them when buying the first property I met a couple from France with over a dozen properties with this management company in the US, so that said some great things to me).

16
#7 5 months ago

I own 3 multi-family homes in both Boston proper and the greater Boston area.

1. Get on Bigger Pockets.

www.biggerpockets.com is the absolute best place to get any and all information you need to successfully make money in real estate. They cover a billion different strategies, areas of the country, and anything else you can imagine. Read their daily letters, listen to all the podcasts, and get cracking!

2. Know the laws!

The easiest way to go broke in renting real estate is not understanding how to protect yourself. List the property as being in a "family friendly neighborhood"? Cool, you just discriminated by familial status against folks who don't have a family. Charging a pet fee or an application fee? Not a problem! Well, unless you're in Massachusetts, because both of those things are against the law. Local laws and federal laws are often different, so stay on top. Making money in real estate is hard enough as it is, it's much harder when people try to constantly sue you.

3. Screen, screen, screen

I'm a big fan of pre-screening my properties. If you don't make at least 3x the rent, if you smoke, if you have a dog over 25 pounds and/or I don't like it, if you have poor credit or have been convicted of a felony, or a billion other things, I'm not going to go through the process of showing you the property. I'll give you an application, as it's illegal for me to refuse you one, but I'll let you know that you won't qualify and why.

4. Keep your records

The amount of legal deductions you can take is absolutely bananas. My brother and I received a $25k tax return and most of it was attributed to phantom deductions like depreciation.

5. Smart leverage

Have a gameplan and stick to it. I invest for cash flow, NOT appreciation. I just refinanced two of my properties on Monday. One of them has gone up $400k since I purchased it. That's nice and everything, but it's largely irrelevant to my month to month finances. I cash flow heavily on each property, and even with a down turn in the economy or housing market, I'm still covering my mortgages and then some. When my properties have grossly appreciated, I take out a HELOC, buy another multifamily, use the cash flow from the rentals to pay off the HELOC, then repeat the process. The more I own, the easier it is to own more.

6. Raise the rents each year

Even if it's a little. It's landlording 101. If your tenants are good, increase the rents annually. The last thing you want to do is toss a massive increase at great tenants after not bumping the last 5 years and losing them. The adage is that tenants expect annual increases, so don't leave them disappointed

Take everthing I say with a grain of salt. What works for me won't necessarily work for you. My properties are "A" properties that are roughly $1 million each and my clientele is largely engineers and similar folks. My rents are high, my tenants are top notch, my vacancies are low, and I'm in an area of incredible high occupancy even in an economic down turn.

Landlording is a business, not a hobby. Treat it like one and the rewards are exceptional. I grew up poor and am only a public school teacher and I've been able to figure it out. If I can do it, anyone can.

Good luck!

#8 5 months ago
Quoted from mrmark0673:

I own 3 multi-family homes in both Boston proper and the greater Boston area.
1. Get on Bigger Pockets.
www.biggerpockets.com is the absolute best place to get any and all information you need to successfully make money in real estate. They cover a billion different strategies, areas of the country, and anything else you can imagine. Read their daily letters, listen to all the podcasts, and get cracking!
2. Know the laws!
The easiest way to go broke in renting real estate is not understanding how to protect yourself. List the property as being in a "family friendly neighborhood"? Cool, you just discriminated by familial status against folks who don't have a family. Charging a pet fee or an application fee? Not a problem! Well, unless you're in Massachusetts, because both of those things are against the law. Local laws and federal laws are often different, so stay on top. Making money in real estate is hard enough as it is, it's much harder when people try to constantly sue you.
3. Screen, screen, screen
I'm a big fan of pre-screening my properties. If you don't make at least 3x the rent, if you smoke, if you have a dog over 25 pounds and/or I don't like it, if you have poor credit or have been convicted of a felony, or a billion other things, I'm not going to go through the process of showing you the property. I'll give you an application, as it's illegal for me to refuse you one, but I'll let you know that you won't qualify and why.
4. Keep your records
The amount of legal deductions you can take is absolutely bananas. My brother and I received a $25k tax return and most of it was attributed to phantom deductions like depreciation.
5. Smart leverage
Have a gameplan and stick to it. I invest for cash flow, NOT appreciation. I just refinanced two of my properties on Monday. One of them has gone up $400k since I purchased it. That's nice and everything, but it's largely irrelevant to my month to month finances. I cash flow heavily on each property, and even with a down turn in the economy or housing market, I'm still covering my mortgages and then some. When my properties have grossly appreciated, I take out a HELOC, buy another multifamily, use the cash flow from the rentals to pay off the HELOC, then repeat the process. The more I own, the easier it is to own more.
6. Raise the rents each year
Even if it's a little. It's landlording 101. If your tenants are good, increase the rents annually. The last thing you want to do is toss a massive increase at great tenants after not bumping the last 5 years and losing them. The adage is that tenants expect annual increases, so don't leave them disappointed
Take everthing I say with a grain of salt. What works for me won't necessarily work for you. My properties are "A" properties that are roughly $1 million each and my clientele is largely engineers and similar folks. My rents are high, my tenants are top notch, my vacancies are low, and I'm in an area of incredible high occupancy even in an economic down turn.
Landlording is a business, not a hobby. Treat it like one and the rewards are exceptional. I grew up poor and am only a public school teacher and I've been able to figure it out. If I can do it, anyone can.
Good luck!

Yeah, it’s crazy from market to market for sure!!
Other than vetting the applicants, many things you do/can do is applicable for me in my geographic region. And I don’t mean laws, I just mean general thing like raising rent annually, I live in a smaller community, I can’t raise rent, for my this just helps my retirement as I’ll cash out on the building in a handful of years when I retire
From work.

#9 5 months ago

Some of my favorite quick and easy tips for landlords with several units.

1. Find a color you love and stick with it!

Literally every room in every apartment I own is Behr Marquee "Silver Drop". I buy 5 gallons at a time, so I get a bulk discount. I don't need to store a million cans somewhere because I only use one color. When tenants move out, I don't need to repaint every room and I don't have to worry about color matching, I simply touch up what needs to be touched up and the place looks good as new. Neutral grays are "in" right now, so I haven't had a single complaint.

2. Landlord keys

If you have a bunch of properties, then you have a bunch of keys. I want one key for every door, but I don't want tenants having the same key as someone who lives in another property. The solution? Kwikset Master Control: https://www.kwikset.com/products/detail/key-control-deadbolt-keyed-one-side-featuring-smartkey

I have one key that opens literally every door I own, tenants have their own unique set. I color code each set and leave extras at home. When a tenant moves out, I quickly and personally change the property to a new color set of keys I have at home, my key doesn't change, and the new tenants are safe.

These are two very simple steps that will make it easier to manage your own places once you start collecting "doors".

#10 5 months ago

It's funny you posted this. I've been considering jumping in on doing rentals for awhile now. I have the cash and liquidity so that part isn't the issue, however I am risk adverse, and I don't know much of anything about property values vs. what I can get for rent. I'm doing a bunch of research, but it is overwhelming (also worried about bad tenants). The area I live near that I'm looking at I think the houses are overpriced for what they are and the taxes are high. From a housing market perspective, I feel I'm looking to jump in at the wrong time?

#11 5 months ago

I manage multifamily properties in the most regulated housing market in the country: Washington, DC. I personally manage over 600 apartments and my company manages over 7,000. I have seen it all. Literally.
The best advice that has been posted is to know the law. Fair housing laws vary locality to locality and you can easily violate the law despite your best intentions.

#12 5 months ago

I only have lower end properties at the moment and would need more than an entire forum to post our stories but I will share one of my favorites...tenant that we inherited when we bought the building was facing drug charges...he was behind on his rent and we had been trying to get rid of him for a few months...evictions are moderately difficult in WI...anyways during our 3rd eviction hearing the judge was looking through tenants record and asked the tenant about the charges and drugs found in his unit(our building). The tenant told the judge I planted the heroin in his vents...the judge looked at him looked at me and said that’s the most preposterous thing he has ever heard.
Anyways most of our tenants are good hardworking people with poor credit etc...we do accept rent assistance tenants because of the neighborhoods we are in and generally have done pretty well with our properties as cash flow is good because buildings are cheaper than “regular” rentals. Most tenants pay cash which is nice and it really helps fund my pinball obsession...of course my wife sometimes says we should take properties and pinballs and burn em all to the ground

#13 5 months ago
Quoted from Zablon:

It's funny you posted this. I've been considering jumping in on doing rentals for awhile now. I have the cash and liquidity so that part isn't the issue, however I am risk adverse, and I don't know much of anything about property values vs. what I can get for rent. I'm doing a bunch of research, but it is overwhelming (also worried about bad tenants). The area I live near that I'm looking at I think the houses are overpriced for what they are and the taxes are high. From a housing market perspective, I feel I'm looking to jump in at the wrong time?

@zablon feel free to pm if you want to discuss. My wife and I have been doing it for 5 years and I’m always happy to spread a little knowledge.(the little that I have )

#14 5 months ago

I have a duplex and have been thinking about buying another in the next year or two. Our tenants pay for half the mortgage and are great people. With the next place we may try to just Air BNB the second unit as there is a lot to be made in our ski town.

-1
#15 5 months ago

I hate landlords...slimy guys with potbellies, gold chains & Cadillac boats

Growing up as a kid if my mom was short on rent I would have to wait in the front room while she “paid” the rent to our “lord”

#16 5 months ago

Cool and timely thread as I've been thinking about buying a 2nd home with vacation rental potential. I'm concerned about the distance from home (2.5 hours) and the managment & maintenance aspects. Anyone here doing vacation rentals, AirBNB, etc?

#17 5 months ago

These days, Ive changed to just being the Mortgage Holder.....But in the past, yes.
I made more in general with Property, than any business I had.

Good: When people Paid and left me alone
Medium: a Legitimate amount of work and maintenance.
Bad: Annoying Tenants that wanted "Now" and "More"
Worst: Rats, Cement in toilets, punched out walls, Feces everywhere, squatters.....

#18 5 months ago
Quoted from rotordave:

Out of interest, how much $$ are the houses in your area ... what sort of rent do you get?

Houses are high now, running 150k to over 200k for a decent place. The most I ever paid was 112k, and everything in the house was brand new, even had a brand new 2nd full bath added.

I get 895.00 for the smallest house, around 1400 sq ft, to 995.00 for the largest, around 1800 sq ft.

It is hard to get above 1000.00 here, but 995.00 you will rent fast and not have much turnover.

I like realtor.com to look at home prices in different areas, and to see how much rent is going for.

#19 5 months ago
Quoted from JohnnyPinball007:

Houses are high now, running 150k to over 200k for a decent place.

Wow. That's cheap! And a much better return on investment than here.

Houses are usually around the million mark but rent for that house is maybe $3,500 or so.

I'm currently in the process of building a laneway suite in my backyard with a 2-bedroom apartment and I should be able to rent it for around $2,500/month.

#20 5 months ago

Isn't canadian just pesos by another name?

#21 5 months ago

I owned a rental property many years ago. It was a real pain in the ass getting the deadbeat family out of there when they could no longer make rent.

#22 5 months ago
Quoted from jwilson:

Wow. That's cheap! And a much better return on investment than here.
Houses are usually around the million mark but rent for that house is maybe $3,500 or so.
I'm currently in the process of building a laneway suite in my backyard with a 2-bedroom apartment and I should be able to rent it for around $2,500/month.

laneway (resized).png
#23 5 months ago
Quoted from o-din:

I owned a rental property many years ago. It was a real pain in the ass getting the deadbeat family out of there when they could no longer make rent.

That's because you live in CA. Land of the free handouts. :S
But yeah; I get your pain.

#24 5 months ago

The dude was a hard working chiropractor, but I guess he ran out of backs to crack. It was beach property so still made a little profit when I sold the place. Hindsight says if I had kept it, I would have a nice weekend retreat fully paid off worth way more now. No regrets though.

Anybody considering being a landlord should watch the movie with Michael Keaton called Pacific Heights.

#25 5 months ago

had great success with rentals over 15 years, but I don't self manage (use a property manager @6% fee). I do know that your success depends largely on the area where your properties are, and the industry in the area, etc.

I saw on the news one night the SWAT team forced entry in a house, and realized it was one of ours. They had to force entry in full on gear in all doors because a tenant was holding his GF at gunpoint, high on drugs and wouldn't let her out of the house while she was on 911 asking for help. He fired off a round so an electrician had to come out and inspect the property before the power could be turned back on. $4,000 in damages that I had to eat when we did a 48 hour eviction and had to repair everything...

In general though they have been great and build a ton of equity each month.

#26 5 months ago

From my experience.
Don't rent to Relatives or friends.
You must be heartless, or at least stone cold.
If you must employ someone to "Ride shotgun" while collecting money door to door you are doing it wrong.
Provide a source of heat for your pipes/water system independent from the Tenant if in a cold area.
Do not allow wood stoves .

#27 5 months ago

I have been purchasing rental houses in another state for 6 years. My watch out for people is be very conservative with your expected returns so you dont get yourself in financial trouble. If you get $1,000 in rent, target to actually see $550-$600 after all expenses (taxes (income AND property), inspections, licenses, maintenance and management fees). Perhaps less if you have a mortgage. Tax benefits are good, especially if you are in brackets that really dont allow many other deductions.

Find a good team if you dont plan on managing them yourself. I am completely hands off other than approving expenses >$500. Consider holding title under an LLC for your personal financial security and DO NOT co-mingle personal and business expenses.

I have a low tolerance for risk in this sense, so nothing I say is a rule. Just be knowledgeable of the potential consequences of the risk (e.g. dont be dumb and lose your primary residence!).

#28 5 months ago
Quoted from jake35:

$4,000 in damages that I had to eat

The worst I had was over $17,000.00 in damages and repairs.

BUT, up until then it was the best house ever. I bought it for a friend needing a new place to live(his landlord was selling and retiring), and my friend payed me rent and moved in the same day I bought it.

Then, when he was moving, I had another tenant wanting to move to a bigger house, and this tenant moved in the same day my friend moved out. At that time the house already needed some work, but nothing major.

Anyway, that house never had a day of downtime for 12 years. And except for a new metal roof and a new ac system I never spent a dime on any repair during that time.

At the moment I am having to spend 1300.00 for a new furnace for a house, but that does not bug me so much anymore. I have been debt free for about 5 years now since I paid off the last mortgage.

I would like to get another house, but prices are too high right now for my tastes, so I am just saving and waiting.

When I do a mortgage I always do a 15 year and try to pay off within 7-8 years. I know everyone is different with how they like to do that stuff, it is just what I like to do.

For anyone about to get started I recommend going to money99.com and buying a copy of the book called The Landlord Survival Guide. You also get a awesome lease you can use, along with lots of other legal forms you will need.

It is also good to treat your real estate agent to lunch(if you use a agent). You can get great advice from them most of the time.

#29 5 months ago
Quoted from phil-lee:

Don't rent to Relatives or friends.

I would never do that again, but it turn out great at the time.

Quoted from 2000_Alum:

Consider holding title under an LLC for your personal financial security

Instead of that, I keep a 2 million dollar umbrella policy. My real estate agent(my best friend), tried to get me to put each house in a separate LLC. I asked my accountant and he said why would you want all that extra stuff to keep up with.

I asked my lawyer, and he said he loves LLC's, but for what I am trying to do a umbrella policy would be great.

#30 5 months ago
Quoted from JohnnyPinball007:

Houses are high now, running 150k to over 200k for a decent place. The most I ever paid was 112k.

Yeah, houses are cheap in most of America. Except the big cities ...

We drove around Texas, there were some shitty houses in small towns for like $10,000. Lol!

In large cities in NZ and Australia (and Canada) you really can’t get much under $1,000,000.

Which at the moment is $650,000 USD (but the exchange rate is currently very low - usually $1,000,000 NZD = $750,000 USD ish)

Close to Auckland city centre, this is what $1,000,000 USD buys ... 2 little Sections.

If you built a nice little townhouse on one of those sections, it’d be worth 2,500,000 NZ bucks.

Like anywhere, the further you go out from the city centre, the cheaper the places get. You can get a decent older family home in Pukekohe (40 mins drive from the city) for around $650,000 ($450k USD)

Because the houses are so expensive, you can’t really get a good return as a landlord.

Using the $650,000 Pukekohe house as an example, that would rent for $500 a week - so $26k a year - less your taxes and upkeep - you’d make about $20k a year I guess. About 3%. Not super great.

I only have commercial - A lot better return and the tenant has responsibility for upkeep and taxes etc. Over here, at least - I can’t speak for the States.

rd
6F4F8A2D-CABB-420F-9A7C-D1DF45B82DCF (resized).jpeg

#31 5 months ago

2 bed room, 1 bath older home are easily under 100k in my town if one wanted to keep buying and renting.

I don’t want the hassle. I’m comfortable with my situation already.

#32 5 months ago

All the Positive cash flow properties you want around Florida....Just still a PITA with people.
I left that for Commercial Property, and found renting office space to Attorneys and Doctors to be easier.

#33 5 months ago

Don’t rent to people on government assistance.

#34 5 months ago
Quoted from ChippyWonka:

Don’t rent to people on government assistance.

Isn't that money guaranteed? Or is it more about the personality types that are on it?

#35 5 months ago

From what I have heard the money is guaranteed. Sometimes 100%, sometimes less guaranteed and the tenant is responsible for some.

I have never messed with it because what I heard is I am responsible for suppling and maintaining appliances.

And lots of inspections and safety stuff, like I may would have to install handrails for one step.

BUT, and not sure if true, if a tenant causes damage, the government will move them out and pay for the damages.

Quoted from Zablon:

Isn't that money guaranteed?

#36 5 months ago

#37 5 months ago
Quoted from OLDPINGUY:

All the Positive cash flow properties you want around Florida....Just still a PITA with people.
I left that for Commercial Property, and found renting office space to Attorneys and Doctors to be easier.

Sound advice there.

I did residential property investment in my twenties and having to chase tenants for this month's rent or tradespeople and paying them $60/hour to attend repair jobs that amounted to not much more than changing a washer from a leaky tap (faucet) was enough to realise it wasn't worth it to me long term.

Got out of residential and moved into commercial property investment with an emphasis on attracting Government departments as tenants. The benefit being the yearly maintenance bill drops by 90% and they are more inclined to sign long term leases.

Plus regardless of the health of the economy, with a Government department as a lessee the rent is always paid on time.

#38 5 months ago
Quoted from JohnnyPinball007:

I would never do that again, but it turn out great at the time.

Instead of that, I keep a 2 million dollar umbrella policy. My real estate agent(my best friend), tried to get me to put each house in a separate LLC. I asked my accountant and he said why would you want all that extra stuff to keep up with.
I asked my lawyer, and he said he loves LLC's, but for what I am trying to do a umbrella policy would be great.

This is a fair approach as well. Goes to show there are several solutions based on level of investment and risk tolerance.

#39 5 months ago
Quoted from pinsanity:

having to chase tenants for this month's rent

I never chase. I have a hidden secure lock box outside the fence at my house that rent is due at 5pm on the 1st day of the month.

In the last 2 years I have called one tenant 2 times at 6pm, always a emergency, and rent was in the box by 8pm as promised.

In the past, years ago, with other tenants, a note on the door the next morning, and then that night I would file eviction online. My County has a great way of doing stuff, you do not have to make many trips to the courthouse.

Anyway, my current tenants have to love me, because I never ever bother them, never go up on their rent, and most have the #'s of the repair people I use so they can call direct for a repair when there is a issue. I do have one house that still has to call me, but only because...well, not going into it, but they are 100% fine.

And my whole thing with any new tenant is your payment is due in my box by 5pm on the 1st day of the month. You can pay early(and most do), but your payment will not be deposited until the 2nd day of the month. Just in case something may come up, go ahead and drop off early.

And they all behaved very well this year so they got a holiday bonus. They are responsible for cleaning their gutters, but I just paid someone to do that for all of them. (and that helps me also to make sure the house stays in good shape).

*And I think someone had mentioned pipes freezing in the Winter, that is in my lease also, the tenant is responsible for repairs if they do not protect pipes in the Winter.

My lease covers my ass really well, and not hard at all for anyone that can be responsible. It is like 12 pages of fine print.

And, when time to renew, sometimes I will do a 2 year, but regardless I ask the tenant if they still have their lease. If they do I say nothing has changed, so not printing a new one, except for the pages with new dates to sign. And I think they love the fact after they sign on the first time I never change anything, and the better they do the more willing I am with helping them at times also(like the gutter cleaning I just had done).

My current tenants are like family. Sometimes I want to invite them over to play pinball, then I remember hell no, chill out, do not become friends, things are perfect the way they are.

#40 5 months ago

I’m in a rather unique situation. I bought a two family house from my parents at less than half of the market value. The one catch is that they get to live in one of the apartments rent free until they are dead or in a home. They pay their own utilities and other odds and ends. I can’t really complain though. The ocean is across the street and we live in a quiet wooded neighborhood with free child care on a whim and dinner when I don’t feel like cooking. The investment will pay off eventually.

#41 5 months ago

I currently own 4 (soon to be 5) SFH in my actual neighborhood.
I have a few tips for the various aspects of being a property investor, landlord, an operationally.

I like homes close to mine. It makes it easy to maintain them and keep an eye on things. I tell all prospective tenants that I am their neighbor and that alone helps filter out the ones that are thinking of hiding things (pets, extra roommates, etc...)

I buy homes with good bones and plan for the big stuff. I am slowly doing metal roofs as needed. I do the majority of work myself and I try to do as much as budget will allow before getting a first tenant. All properties must be at least $300 cash positive per month for them to be of interest for me. All of that profit goes 100% back into the properties for fixing and improving. I am playing the long game. Once I have 10 homes paid off then I will likely quit my day job and leverage those to buy more to grow the snowball.

When doing initial fix ups, plan for low maintenance and hassle in the future. Install hardwood, not carpet. New quality appliances bring in and keep better tenants. If you see a potential problem when looking to buy a place, it WILL be a problem at somepoint in the future. Quick example > bought a house last year with a remodeled shower but a shitty thin shower pan. I knew it would be an issue and sure enough it cracked. I now have to limp it along with ugly epoxy till current tenant takes a 1 week vacation and then I have to hustle to fix it correctly and for good. Just do it while the unit is empty and remove your future headache. I did not take my own advice because I bought 2 homes last year and needed to get to work on the second... Lesson learned.

Operational aspects are my least favorite thing. I have learned to enjoy them more by developing a good system for finding and screening tenants.
This came all from the help of a Pinsider a few years ago and has been a big help. I have learned to be hard and strict with my filtering of tenants to find good ones. You will have a bad one get through at some point, but refining this has meant way fewer headaches. Main things are 3x rent as total income, all persons must be listed on lease (no, cousins that showed up or extra dogs), no smokers period!, set clear expectations and verify by checking in. It is always a good idea to do a post move in inspection to see how the tenants live. Then go in 6 months later to "check" on the house. You want to give a good tenant their privacy but also see potential issues before they get worse.

For me personally, I will be in 'pay off the loan' mode before I get any more homes. Mainly becuase maintaining 5 seems to be my limit.
My current goals are to turn 2 year tenants into 5 year tenants. Turnovers take time, energy, and cost money. Despoite what someone else said, I NEVER raise rent ever for a good tenant. If they pay on time, take care of the property, and notify me ASAP when a problem comes up; then rent stays the same for as long as they love there. My properties are all cash positive so I have no issue making a little less each year (taxes and operating costs/ins go up) if it keeps a tenant in the home for multiple more years.

With a 15 year mortgage, I would like to only have a max of 5 tenants in that time frame.

#42 5 months ago

Just tossed a tenet out who was not paying,
300$ a month rent for a whole house.

They stole the furnace when theY left.

New tenets pay 1600$ A month nbd

#43 5 months ago

A friend of mine is a property manager and recently posted this pic. She posts a lot of gross stuff.

pasted_image (resized).png

#44 5 months ago
Quoted from Wolfmarsh:

A friend of mine is a property manager and recently posted this pic. She posts a lot of gross stuff.
[quoted image]

I know the feeling. My job requires me to go into some pretty gross and smelly houses regularly.

#45 5 months ago
Quoted from mrmark0673:

3. Screen, screen, screen

I'm a big fan of pre-screening my properties. If you don't make at least 3x the rent, if you smoke, if you have a dog over 25 pounds and/or I don't like it, if you have poor credit or have been convicted of a felony, or a billion other things, I'm not going to go through the process of showing you the property. I'll give you an application, as it's illegal for me to refuse you one, but I'll let you know that you won't qualify and why.

This--

Quoted from mrmark0673:have been convicted of a felony, or a billion other things, I'm not going to go through the process of showing you the property.
--is discrimination and will eventually get you in a lawsuit that's deep in triple digits.
Just my .02
-Mike

#46 5 months ago

n/m i misread the quote

#47 5 months ago

I’ve always wondered what it would be like having rental houses in college towns. Does anyone here have any experience?

#48 5 months ago
Quoted from mrmark0673:

I own 3 multi-family homes in both Boston proper and the greater Boston area.
1. Get on Bigger Pockets.
www.biggerpockets.com is the absolute best place to get any and all information you need to successfully make money in real estate. They cover a billion different strategies, areas of the country, and anything else you can imagine. Read their daily letters, listen to all the podcasts, and get cracking!
2. Know the laws!
The easiest way to go broke in renting real estate is not understanding how to protect yourself. List the property as being in a "family friendly neighborhood"? Cool, you just discriminated by familial status against folks who don't have a family. Charging a pet fee or an application fee? Not a problem! Well, unless you're in Massachusetts, because both of those things are against the law. Local laws and federal laws are often different, so stay on top. Making money in real estate is hard enough as it is, it's much harder when people try to constantly sue you.
3. Screen, screen, screen
I'm a big fan of pre-screening my properties. If you don't make at least 3x the rent, if you smoke, if you have a dog over 25 pounds and/or I don't like it, if you have poor credit or have been convicted of a felony, or a billion other things, I'm not going to go through the process of showing you the property. I'll give you an application, as it's illegal for me to refuse you one, but I'll let you know that you won't qualify and why.
4. Keep your records
The amount of legal deductions you can take is absolutely bananas. My brother and I received a $25k tax return and most of it was attributed to phantom deductions like depreciation.
5. Smart leverage
Have a gameplan and stick to it. I invest for cash flow, NOT appreciation. I just refinanced two of my properties on Monday. One of them has gone up $400k since I purchased it. That's nice and everything, but it's largely irrelevant to my month to month finances. I cash flow heavily on each property, and even with a down turn in the economy or housing market, I'm still covering my mortgages and then some. When my properties have grossly appreciated, I take out a HELOC, buy another multifamily, use the cash flow from the rentals to pay off the HELOC, then repeat the process. The more I own, the easier it is to own more.
6. Raise the rents each year
Even if it's a little. It's landlording 101. If your tenants are good, increase the rents annually. The last thing you want to do is toss a massive increase at great tenants after not bumping the last 5 years and losing them. The adage is that tenants expect annual increases, so don't leave them disappointed
Take everthing I say with a grain of salt. What works for me won't necessarily work for you. My properties are "A" properties that are roughly $1 million each and my clientele is largely engineers and similar folks. My rents are high, my tenants are top notch, my vacancies are low, and I'm in an area of incredible high occupancy even in an economic down turn.
Landlording is a business, not a hobby. Treat it like one and the rewards are exceptional. I grew up poor and am only a public school teacher and I've been able to figure it out. If I can do it, anyone can.
Good luck!

All of this, especially #3!

#49 5 months ago

Question for everyone:

Do any of you use any form of positive reinforcement regarding rent? I know some of you say you don't raise the rent but does anyone do things such as small discount for paying early? Discount on last month of year if paid on time rest of year? Discounts for 6 or 12 months up front. Things of that nature?

Does anyone charge late fees or do you simply start the eviction paperwork the next day?

#50 5 months ago

I worked for a property manager and he made sure he received a 10% kickback from anyone he let work on his places.

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