All Forum Posts by: Frank Adams

Tony, I'm not sure where the $24k figure came from, nobody ever got into me for much more than a month's rent. I was never going to waste a minute chasing uncollectible debt.

As I think I said when they received the 1099 they'd contact me to settle.

Alan, this won't make you feel better but you just described why we moved out of Texas 10 years ago. We live in Colorado now and I sometimes tell people we left Texas because it was too hot, too humid and too expensive. They often say "oh no, you're wrong, Texas is a low tax state!

I tell them to stop listening to lying politicians. Texas isn't a low tax state but a state without a personal income tax.

Our last house in Texas was in the Hill country and here's 2007's numbers against our Colorado house for 2017.

Texas:

2200 sq foot, sold in early 2008 for $230,000

Property tax: $6,000

Homeowner's insurance: $1600 (3% deductible)

Electric bill: $290.00 month.

Car insurance: $1500/year

Colorado house, bought November 2007

$308,000, 2800 sq foot

Homeowner's insurance: $950 with $1,000 deductible

Car insurance: $1,100/ year

Property tax: $1,500/ year

Electric bill: I'd have to look for the breakdown but our city utility bill averages $90.00/month and includes, electric, water, sewer, trash and recycling, streetlights and mosquito abatement.

There are two bills that are higher. We have a"personal property tax" on our cars that declines with age and value-mine was about $1,500 this year for my year old Lexus. We also have a personal income tax of 4 5/8%. But the first $24,000 ($48k, married filing jointly) on any retirement income like social security, IRA, 401k, pension etc.

The best part is that we actually get something for our tax dollars. We have a library in our city of 75,000 that I'd put up against a library in a city of 300,000. We have a city recreation center that is as good or better than most commercial gyms. The rec center also has two pool and two hot tubs.

Stop listening to idiots like Rick Perry and Dan Patrick or you'll continue to see your taxes go up and what you receive go down.

Max Tanenbaum hit the nail on the head all the way around. 

Set up an exhaust fan to vent to the outside, maybe with a new light fixture. 

I think an exhaust fan kit is less than $50.00 and IMO no bathroom should be without it.

New vanity, maybe new toilet. At least a new seat and handle.

Now that there are Habitat Re-Stores in most good sized towns, we have one in a town of only 80,000, finding a vanity and toilet should be cheap and easy.

Make sure your shut off valves are in great condition. If any aren't, replace them.

A friend of mine did the "turnover" maintenance on the apartment building he lived in his last two years of college. The property owner had rule, if you touch a shut off valve you replace it! That was my rule for a long time but when the 1/4 turn valves came into being I quit replacing them just because I had shut the water off to replace a toilet flapper.

Your question leaves out a few key points.

We have a home that has been in the family... Does this mean you, or you and your spouse own it. Or is it owned by extended family? 

How long has it been used for various family members to live in? 

I realize that a lot of your region has had great appreciation but I think you're still allowed up to $500K tax free if you meet the 3/5 occupancy rule. Even if you exceed the $500K cap you would only own LTCG on the amount over that.

When I was doing rentals, '80s through 2001 I started requiring a minimum of two year leases and it reduced my turnover vacancies, increasing my return, and getting me a better class of tenant. I wasn't getting shabby tenants by and large because my places were all in nice suburban Houston neighborhoods, but 4 of them were in a bit more down market subdivisions than the others. 

My places always showed well, had high efficiency A/C (important in a place where you're cooling the house 8 months a year) solar reflective screens, extra attic insulation, garage door openers, etc. By and large I could get $40-$60 more a month than neighboring properties and anyone who balked when I told them two years was not going to be a stable enough person for me.

Susan, that's why learning DIY skills is important. I've done similar bathrooms for less than $1,000.

strip it to the studs,  any time you're in a bathroom,  particularly in a humid area like Mississippi,  you never want to cover up potential problems. 

Concrete backer board and ceramic tile are easy to learn.  My sister in law taught me! As long as the wall is open install a code compliant (ours are some kind of high strength plastic) glass block window.  Even if you'rein a place without codes it would only take one slip and a bad cut on broken glass for your great grandkids to still be paying off the lawsuit 50 years from now.

Kitchens and bathrooms are what sell, or rent homes. 

I think single bath houses have been technologically obsolete for about 40 years in the US.

Diversification is key. We had IRA's, 401k and non tax advantaged mutual funds and a few stocks. We also had 16 rentals which we owned free and clear. As I got older, went back into commission only sales and tired of the hassle. Over 3 or 4 years we sold and seller financed all the property and were getting $85k or so year before we started collecting social security.

When we moved to the Texas hill country I started doing a couple of flips per year which often replaced mortgages that had been paid off.

We still have 2 mortgages paying us about $700/month we each get social security, combined about $55,000 year and we're both 70+ so we're at RMD point on our rollovers, about $68,000/year, plus dividends and capital gains from mutual funds.

I don't think we'd be doing as well with just REI because people often moved or refinanced when the stock market was in free fall.

Neither of us worked past 54 years old.

We had a big discussion just yesterday about the 1099. Search for my name to find it as I was the first to write it.

We did a role playing thing once in Houston on personal property that could be attached. VIRTUALLY NOTHING.  The tenant could conceivably claim "family heirloom" or "tools for my profession" or "used for preparing and/or serving family meals". None of those are attachable in many states.

Looking around my house I could claim one of those on everything including my big screen TV.