All Forum Posts by: Craig Janet

I have a line of credit that is backed by the equity in my rentals. The rates have increased from 3.75 to 8.75. This adds hundreds of dollars of expense to any potential deal. Housing cost have not decreased nearly enough to offset this, making deals impossible for the math to work. So I'm just waiting. 

Just let them deposit the money at your bank. I offer all online payments or apps but some still want to pay cash. So I just give them my account number and they deposit it directly into my account. Give them a choice, either pay electronically or physically drive to the bank every month. Some of the older folks actually enjoy the interaction with the teller. 

Your CPA is worried about an audit because you are expensing things that should be deprecated. There are some grey areas in the tax reporting AFTER its in service in regards to whether an expense is a repair or improvement. 

To answer your question there is no magic number that will trigger an audit. How lucky do you feel?

Quote from @Ronnie Kendrick:

I have a problem sometimes where I want to keep adding to make it the best possible place to live. But you need to take a step back and understand what your goals are for the property and the tenants you expect to place. What's the competition in the area? If they're not putting in granite, no need for you to do something similar to make it "rent ready".

You said you plan to make major upgrades in a year. My advice would be to get it in decent condition now (carpets cleaned, repainting, deep house clean) then put it on the market. Maybe you get lucky with a tenant who pays what you're comfortable and wants to stay a few years. Then you can put those upgrades off until you have an exact understanding of what people are expecting.

 This is great advice. Unless the house is completely wrecked or severely dated for the area  "major upgrades" rarely payoff. Fresh paint, new floors, make sure everything works as should and get as much rent as possible. Do the math, if you spend $20-$50K in improvements to get a couple hundred dollars more in rent, it doesn't make sense.  

Suck it up and pay the bill and communicate with the tenant that this is a one time deal. Also take this as a learning opportunity to simplify your rental. Remove the "complicated drain" and let them use a rubber stopper, no programable thermostats, no fancy ceiling fans with remotes/wifi, no fridges with water/icemakers, etc. It's incredible how dumb some people are. 

So you live in an area that will pay a college graduate with no experience $200K a year but also has livable $150K houses. Where is this? I don't know any occupations that pay $200k right out of college, not even most doctors and engineers. So, as others have said you may want to slow down, worry about school, and keep your debt down to a minimum. Good Luck!!

Quote from @Kevin Kim:

Quote from @Craig Janet:

After you screen and accept a tenant there isn't much you can do. Just make sure if they are late, to immediately contact them and post a notice to quit asap. The notice will usually get their attention. Then proceed with the eviction ASAP. Do not fall for sad stories, just proceed with the eviction.

If I proceed with the eviction, how long it can be at max to move out a tenant?

I just wonder. 

 It can take 4-6 weeks in my area. But hopefully it doesn't come to that. Usually the notice on the door gets their attention. Then they will get served court papers that should really get them motivated to either pay or move out. I've only had one eviction where I had to get the marshalls to physically throw them out. 

After you screen and accept a tenant there isn't much you can do. Just make sure if they are late, to immediately contact them and post a notice to quit asap. The notice will usually get their attention. Then proceed with the eviction ASAP. Do not fall for sad stories, just proceed with the eviction.

Quote from @Drew Sygit:

Why have them fill out anything? It's an extra step that obviously isn't working!

Maybe try to just send them your qualifications and ask them to confirm they understand by replying to schedule a showing.

I agree. If you're going to screen them anyway, What are you trying to accomplish with all this information just to show them the property. I would also refuse to fill out this form. Just tell them over the phone your requirements and tell them you're firm. This will weed out a lot of people. You're still going to get no shows, and people not really interested but that's part of the job.

Real estate prices are still way up, insurance cost in my area has doubled, maintenance and materials are still very high. Rent in my area has not increased enough to cover theses. Now adding another $200-$300 a month in interest makes deals very hard to make sense. I think that will deter many new investors and existing investors like myself. I'm hoping things will even out with lower home prices and due to few investors and new home purchases rents will continue to increase.