All Forum Posts by: Angela Smith

$750 payment on 180k sounds low. I assume you are not including taxes and insurance in this number. How much is your down payment? Do you have preapproval regarding how much you can afford? Can you afford this house when the tenants stop paying the rent? For me, personally, a loan that high for a profit of $100 is more risky than I can afford. We just got possession of our first property. $62k purchase price, rents for $800. After all expenses, we net about $425. We can do that because we have a large down payment and a very low monthly obligation. Also, we can afford to cover the expenses if the tenants stop paying. We can maintain the obligations while we evict. Obviously, we are not in as nice an area as you. But, it is a solid blue collar area with low crime. The only problems with this property is the previous owner was a smoker and had cats. So we are ridding it of fleas and smells prior to listing it. All mechanicals and roof are fairly new.

All I can say is, I'm thankful my husband doesn't subscribe to your type of money management plan. Clearly your wife is feeling pressure being the sole breadwinner. I strongly encourage you to take a serious look at this situation. You are not bringing any money into the household. And you are mocking your wife when you said in your original post that your wife said its "not fair". You are taking her for granted and using her for her income. I'm sure it is HER income that qualifies you for the loans, considering you claim to have no income. As a woman, you want to feel your husband values you for more than just your paycheck. Work on your marriage and not so much your next deal.

Does your lease allow pets? I'm not an expert, but I don't think an individual proclaiming 3 caged pit bulls as emotional support animals is the equivalent of a legitimate service animal that a handicapped individual may need for daily functioning. Is it legal to ask for documentation of evidence of these being service animals? I'm not buying into your tenants claim. Besides, even with a legitimate service animal, the landlord should be made aware prior to the animal taking up residence. And, pet fees would be applicable. You are liable for any harm done by theses animals. What if one gets loose and harms a passer by?

This is going to sound very harsh, but it needs to be said. What kind of husband is ok with this situation? Why do you think it's ok to contribute nothing at all to the household? Why are you perfectly content to have her paying for everything, including a truck payment, for crying out loud? If you are contributing nothing to the family, you should be selling that truck today, get yourself an old beater and get a j.o.b. Clearly your real estate is not replacing your income if it's paying you nothing. I question if this is really how your plan was supposed to play out. Half a million in debt and no income from you. You need to seriously listen to your wife's concerns. Otherwise you're going to find yourself suddenly single with a half a million in debt and no income. You may be living in that truck because you can't pay the truck payment and your own rent too.

double post

Originally posted by @Jupshy Jasmin:

@Angela Smith: Congrats to you. I just purchased my first rental recently as well and I freaked out as soon as my offer was accepted. Even the lender was laughing when she noticed how nervous I was. But, one step at a time. Make sure you sit down with your real estate attorney and CPA because they are a vital part of your business. My attorney has helped me a lot with decision making. In my case, I inherited tenants and didn't know how to proceed. But you will do great, just continue to read and ask questions.

nervous indeed. But I am in this with my husband, we have been cautious with this purchase. We can afford it even if it goes empty which would be the worst case scenario. I guess the tenants could trash the place, but I feel like we can absorb that too should it happen.

Still, it is an unexplored territory for us.

Years ago, we had a couple purchase the house across from the street from our residence to be their first rental property. They over leveraged themselves at the buy, then they went in and put in higher end finishings than what the neighborhood could support. They had to rent it at a lower monthly amount than they anticipated and the renters were very hard on it. The renters had 2 large german shepherds, one of which ripped the guttering and some siding off the back of the house. Their teenage son put holes in the walls, painted graffiti all over the place and, let's just say used his bedroom closet as an outhouse. Local law enforcement was very familiar with this family. It was horrible! The landlords did not visit the property, did not screen the tenants. After the year's lease was up, the owners, of course, did not renew, they patched it up and sold it at a loss. I never heard if this couple ever returned to landlording.

Anyway, I learned quite a bit by their failure at implementing their plan.

Our property is in a blue-collar neighborhood, about 50/50 in regards to owners and renters. It's in the city, but the area is low crime. about 6 blocks north is a very rough area, but it is separated from us by a rail yard that is about 4 blocks north. This forms a natural barrier on the north, going south its a long way to the rough area. West has industry and east has one of the hottest neighborhoods in the city.

Tell me about your property. 

Closing today!  The house is in great shape with a new roof in 2017, new furnace and air last winter.  It needs some lipstick in the way of interior painting and exterior landscape clean up.  The budget for these issues is 2-3K for supplies and we will do the work mostly ourselves.  We might hire the landscape clean up for fear of poison ivy.  The goal is to have these things addressed by the end of the month so we are ready to screen tenants for September move in.

The payment including principal, interest, insurance, and taxes is at $380ish a month.  It will easily rent for $750 a month.  We will ask for a deposit equal to one month's rent.  We will screen our tenants to avoid anyone with a criminal history, we will verify employment and will ask for previous landlord contact info.

100% of the rent after expenses will go directly into an account to build up an emergency fund and save for our next purchase.

The payment on this house is so low that we can afford to pay it with the income from our salaried jobs.  So, it feels safe in the event that we have a delay in renting it or a tenant that needs to be evicted.

Now, I need to find a good screening tool, a rental application and lease agreement.

We decided to not go the LLC route at this time, as this is our only property and our insurance agent wrote us an umbrella policy.

Question:  When you sign on a new tenant, do you collect first and last month's rent as well as a deposit?  I'm concerned about asking for too much up front as it is back to school time and moms and dads don't necessarily have that much available this month.

I'm betting Jason Skelton is wrong about the outlook for appreciation in Indy. Taking a look at the last 5 years alone shows an increase in property values. Plus there are condos going up downtown that are upwards of 300k. There development going on all over town. It's not the same city it was in the 90s.

Have you rented to a legal immigrant? How about undocumented immigrant? What is the consequence to a landlord if renting to undocumented? How do you inquire about this when screening? I don't want to discriminate, or even give the perception of doing so. I don't know what to be more afraid of, breaking the law by asking the wrong question and consequently discriminating unintentionally, or breaking the law by renting to undocumented immigrants if it is illegal to do so. But, people have to live somewhere. Don't they ? To be clear, I am happy to rent to qualified people no matter their national origin. I just don't want to find myself facing fines or worse.

Paint the doors a bright contrasting color. Paint the handrails white to match the trim. Put up shutters and maybe a short white picket along that front walk.