All Forum Posts by: Adam Christopher Zaleski

This was not an attitude adjustment. This was you playing the same game as your tenant. An attitude adjustment comes when you calmly hand them an eviction notice.  

The bottom of the market was in 2011. Most of Florida has fully recovered from the housing crash in 2008 -2010. Save you money and wait for the next crash.

You usually want to buy an investment property that is below market value. If it is not appraising at market value there is some cause for concern as a legitimate investment. However, there are always exceptions.

I bought a house in Florida at the end of the year in 2011, which was pretty much the bottom of the market. The bank was asking 94,900 and I offered 101,000. I got the house, but it only appraised out at 95,000. I didn't have the extra cash, so I asked the bank to lower the price. They did and I got it for 95,000. If I had the extra money, I would have come up with the cash because I felt certain that this was the bottom of the market in Florida. I spent 10K on repairs and 6K on a new a/c system. It's now about 4 years later and the house is worth about 190K. It would have been silly for me to walk away from the deal and I'm glad that I didn't. I am also thankful that the bank dropped the price.

First ask the bank to drop the price. If they won't only come up with the 10K difference if you feel really confident about the rent and/or appraised value to go up significantly over the next 3-5 years. Some people call this speculation. However, if you were in Florida in 2011 at the bottom of the market it was just common sense that eventually things would get back to normal.

I have a rental house with low taxes, insurance and vacancy which has gotten me into some disagreements about rules vs. reality. I bought a 2200 sq. ft. rental that is 4 bed/2 bath. I might be transforming a bonus room into a 5th bedroom in 2 years. I bought it in 2007 for 182K. It originally rented for 1350/month but now it's up to 1900/month. It is probably worth about 300K right now. The property taxes are currently 1530/year (6.7%) and the insurance is 675/year (2.9%). The vacancy rate has been 0% over the last 8 years because it's a college town and leases are signed 4-6 months in advance. My rent increased but my taxes or insurance did not. Doesn't that mess up the analysis? After 10K of the initial rehab, I average about 1500/year in repairs. It should be lower, but I had to replace some carpet multiple times because I couldn't figure out a broken gutter and had some water problems.

Go to Zillow and look at the difference in appreciation of houses and condos. Go on craigslist and see what the difference is in rent. I bought a 4 bed/2 bath house close to campus for 182K. I currently get 1450, but I'm going to raise the rent to 1600 on the next lease (400/room). The only other property I was considering was a 2 bed/2 bath condo for 105K with a 110/month HOA. The rent on this is $950, which is technically $475/room. When it comes time to sell, the condos don't appreciate very much. Most parents buy condos for their kids and not houses. When it's time to sell, you usually have to compete with a ton of other parents that want to sell the condo when their kid graduates.

I own a 4 bed/2 bath approximately .6 miles from a state University with 31,500 students. There are not many SFH within 1 mile, so SFH rent a premium. Many apartments are available, but juniors and seniors prefer to share houses. The majority of leases are August 1 - July 31st. People in town call it "turn week" More than half of the people in my neighborhood move during that week. Most students leave for the summer, but they still have to sign a one year lease if they want to get a house. I made students fill out an application that takes them about 2 hours. I only entertain offers from people who have a complete application. I usually have about 10-15 people that say they want it but only about 5 that actually complete a full application. Over the past 3.5 years I haven't had any problems. I have had two different sets of students over the past 4 leases. I tell them that if the house is spotless I won't raise the rent and they can stay for a second year. They keep that house cleaner than when I lived there.

As a single person their typically isn't any money to be made by buying land and holding. You need to own a lot of property, give it a lot of time and have a lot of money to strike a deal with a land developer.

I don't think 2% ever works in any great or good neighbors. You can get 2% on the south side. You can buy 2 bed/1 bath condos for 40-50K and get 800-900 in rent.