All Forum Posts by: Chris Seidler

We have a property which bounces between STR & MTR. We just got an off-season MTR request on furnished finder for a medical company that places medical providers in rural areas (which is our listing). The company seems to be a legit mid-sized business. They want to place a doctor and their spouse for a few months which seems to check out.

Since the lease will be in the name of the corporation, how do we do tenant screening for the actual occupants?  Do we ask the corporate placement folks to allow a background check for the tenant?  I'm not even sure what I'd look for...  the company is paying the bills so even if the doctor has bad credit it doesn't really matter about getting the rent check...  in theory there could be criminal background, but I doubt someone would be practicing as a MD with a long rap sheet.

Would it be sufficient to merely put a clause in the lease that the authorized occupants are Mr. & Mrs. John/Jane Doe, and any change in occupants requires mutual agreement of both parties to ensure that the business doesn't start to rotate different employees through with no option?

The company doesn't really have a "credit score" or "eviction history" so I'm thinking about asking for 1.5x or 2x monthly rent as a deposit (we normally do 1x month rent) just like I would for a tenant without established credit history.

Thanks!

As a tenant earlier in life I needed multi-year leases as I knew my job would keep me in a specific place for 2-3 years.

Escalator clauses are not uncommon in a multi-year lease.  Basically have the rent go up $X every year on the anniversary month.  You need to decide what "$X" is.  You can Keep it Simple and raise the rent by 4% every year (inflation is historically under 3% so you should make out ok), or you can index to CPI, or you can index to something like military BAH or GSA per diem.

The other option is to just do one year leases and renegotiate. If you're looking for high quality tenants ("A") in a larger SFH that don't want to deal with the hassle of moving after a year you may chase some people away. If you're ok with younger less established people, households with less stuff, a smaller home, etc it may be fine.

I would definitely not give a discount for a multi-year lease.

I'm an investor looking for Grade B or C+ properties primarily for long term rental in or around Washington Township, Montgomery County, OH. I am not interested in anything inside city limits of Miamisburg, Centerville, Kettering, etc. -- really want to be in a township for tax purposes.  

Wholesalers -- send your properties!  Please feel free to contact me if you have any opportunities. Thanks!

I have a quick question about capitalizing the rehab costs for a new rental.

-- The property is probably not currently habitable and is likely not ready to put into service (bathroom not functional, among other issues).

-- I intend to put it into service as a rental, possibly a STR, which seems to generally drive a 39 year depreciation schedule if I understand it correctly.

I understand prior to the property being put into service, most rehab costs need to be capitalized.  My main question is how many years they will be depreciated over. Structural stuff is obviously at the 39 year rate.  However,if I install new carpet prior to the property being available for rental, will that carpet have to be depreciated at the 39 year rate for business property, or over a typical 5 year schedule?

Bonus question: If I do the bare minimum to get the property habitable and list it for rent, will that technically count as "putting it into service" so that I can then do some additional "qualified improvement property/personal property?" The easiest part of the project to put off until the end is probably a kitchen refresh, appliances, furniture, and other such items which will go onto a 5/7/15 year schedule if I can defer them until after the property is listed and put in service. If nothing else I could probably list it as a traditional long term rental which would not require it to be fully furnished. If I get a tenant great, and if I don't then I can do the improvements necessary to get it to STR/MTR status.

Thanks!