All Forum Posts by: Account Closed

What type of tenants do you want? 

There are so many great places around Portland, like Vancouver or Milwaukie or Tigard or Hillsboro, etc., but once you narrow down your target demographic, that will inform where you look. 

But as others have said, if the numbers work out and/or you can be creative/hustle (e.g. converting a SFR to a duplex or renting the garage separately, etc.), then deals can be found almost everywhere.

If you want to be ahead of the curve, you could research expansion by big companies or institutions that are here or that are moving here, and what part of town they're moving to.  You could also research infrastructure projects in the works and whatever else you can think of that would drive growth in a certain neighborhood or town.  Demographics is another one.  What age groups are increasing in percentage and what do they like to live near?  For example, boomers will likely want to live near health care facilities while millennials might want to live near transit.  Stuff like that.  

You said you were using Redfin searches. I recommend finding things not listed on the MLS. But if you're going to use the MLS, then find an agent who has worked with investors and ask her to set up some automated searches for you. You can get creative with the search terms, because good deals are often found when the listing agent listed a property inaccurately.

 Good point. That's something to consider if he's planning on selling, and could be a whole thread unto itself.  I know if I spent $8-10k to add DWV plumbing and supply lines with an Ikea bathroom to the basement where I added a legal bedroom, it would likely return more on its investment in terms of equity, if not cash flow.

@Mike F. the answer, like most things, if "it depends." Each market and neighborhood is different. Is it in the burbs with good schools or near the city center with good transit? Is it near a university? Is it a hip area that attracts millennials? Is there a shortage of 3 bedroom rentals in the area (as is the case in many parts of inner Portland)? How do the numbers shake out? 

For example, in my neighborhood, 2 bedrooms are listed on Craigslist for around $1300 while 3br are listed for ~$1800. That is a big jump in rents!  A 1br here can rent for $1000. The difference between the 1 and the 2 is not as great as it is between 2 and 3. That tells me there is a supply and demand issue, though it's not that much more expensive to buy a 2/1 bungalow vs a 3/1 bungalow, or a MF with 2br units versus 3br ones.  Look at rents in neighborhoods you're considering and run the numbers. 

I saw this in the market and capitalized by adding a bedroom to my 2br rental, increasing rent from 1100 to 1700.

What @David Faulkner said about 3/1s vs 3/2s is very interesting... Makes sense here. Mine is a 3/1. Would have cost a lot to add a bathroom but I might have only been able to charge $150 more, if that. And 2 baths probably would have attracted more kids. And I share a wall with them.  Portland is a competitive rental market right now though. Maybe in a less competitive one, the second bathroom would make a bigger difference.  

Welcome @Isaac Marroquin. Portland Monthly magazine regularly publishes Best Of lists for restaurants of every type. You can find those on their website. 

Since we're on a pizza theme, Dove Vivi off 28th and (I think) NE Flanders makes a yummy cornmeal crust. 

My two cents:  I've used SmartMove and my tenants and I liked it.  I think they appreciated that they never had to divulge their SSN and they paid the company directly, so they know their background check fee isn't getting inflated.  I'm sure that's something Cozy can do too, but when I first researched them in March 2015, they only had credit checks and not background checks available.  I wanted both.  

Maybe if/when Cozy can do both credit and background checks (maybe they can now, I don't know) AND when their payment system is set up to accept partial payments or utility bill payments, I will use them.  I like the idea of a one stop shop, but when I checked in March, their functionality was limited.  Plus the idea of a local company is nice.  If they can provide just as good if not better a product as the national competitor.  

Lastly, there are certain things I want to see on an application, and when I last checked, you could not really customize the application on Cozy.  So I use my own form and do my own reference checks and just send the tenants to SmartMove for the background/credit check.  My tenants mostly use PayPal for rent payments, though there are other sites for rent payments too.  

Welcome @Ian Elstrom!  I often could use help with inspections -- particularly "light" inspections that don't take 4 hours or a formal report, but just let me know the major issues an investor would care about -- so we should keep in touch.  

Oh and you're probably right about having a hard time working for a big company after being self-employed.  I tried it for 8 months last year and realized that I needed more freedom and autonomy. I'm much happier now.  

Wow @Greg Brown, their living conditions sound terrible!  

I've visited a couple duplexes like this (well, not quite that bad) when searching for investment property.  I could tell the tenants were in a tight place financially and that kicking them out would make their lives difficult.  I couldn't stomach having to do that, so I just didn't buy those properties.  

But you're in that investment as an investment, not a non-profit, so you have to protect that investment and make it profitable.  Otherwise it's just an expense.  My knee-jerk reaction would be to give them 30 days (or whatever the law is in your state) and get them out.  Clearly, if they can't pay the rent on the 1st, they can't pay the rent.  And what do you do when market rents increase and you have to increase the rent?  Wait until they don't pay and then evict them?  Better to get it out of the way while you have the best "reason" to do so (rehab because you're a new owner).  

After 6 months of buying a duplex, I increased the rent on an inherited tenant.  A few days later, all 4 tires were slashed on my minivan.  4 months later, all 4 tires were slashed again.  

If I were in your situation, I'd get them out ASAP.  

But if you need peace of mind or to feel like you're not a bad guy, you could just make them qualify based on your criteria.  There are ways to do this that make it seem "routine" and "just part of the procedure that must happen when people sign a lease with you."  You could even hire a PM to do this for you.  But do it for both units, not just the one with the water shut off.  

Then when they don't qualify, you won't feel so bad.  

Side note: Investing in occupied property that's in bad shape/bad neighborhoods/has very low rents is not for the faint of heart.

 Well like I said, Steve B., I do what I do because that's just what *I* think is the best choice.  It's my opinion, but what I do may not make sense for everyone.  

I allow pets.  Ergo my rents reflect that I allow pets.  If I didn't want to allow pets, I'd charge a corresponding rent.  But I don't want to have "conditions" on the rent amount that say rent is higher if the tenant has a pet, because I already stated in my listing that I allow pets.  To me, that seems a little bait-and-switchy.  In my opinion, either allow pets--or don't--and charge accordingly.  Badabing, Badaboom, done.  

To those people who mentioned insurance, that's a big one.  I have State Farm.  They don't have breed restrictions, and that's why I chose them.  I have a pit bull that has done less damage to my property over his 10 year lifespan than some children have done to their homes and belongings in a single day.  And I have good insurance with an umbrella policy because with ANY individual dog or dog breed, you just never know . . . 

I allow pets because it increases the number of potential good tenants, and I can ask for a higher amount of rent. I do collect a pet deposit for each pet but it is refundable. The amount will depend on you and your risk tolerance, but I don't believe that pet parents should be penalized for having a furry family member when human children can be just as bad if not worse when it comes to damaging property.  

I do stipulate however that all pets must be well behaved, licensed, and spayed or neutered. Referrals are a plus. 

I have seen rental listings where pets are allowed with extra "pet rent."  I don't do this. I just list the unit for the total amount that would hypothetically include said pet rent. that way pet owners don't feel penalized, but if I get a non pet owner who wants to rent from me at that same price, then so much the better.  This method also seems to have more integrity to me. In my opinion. Plus it's simpler. 

That said, there are many pets in Portland. You may have a different strategy where fewer people have pets.

Regarding pet deposits, in Oregon it is illegal to call anything that is nonrefundable a "deposit" on a lease. You can call it a fee, if you want, or ask for a refundable pet deposit. Yesterday a fellow landlord informed me that if a pet incurs more damage than the pet deposit, you may have no recourse to pull it from their security deposit in Oregon. She instead simply asks for a higher security deposit when the renter has a pet. That law seems a bit nutty to me and I had a hard time believing that to be the case, but she got her advice from the Oregon Landlord Association. 

Really beautiful job, @Isaac Frost!  Even the work beneath the work (electrical, insulation, etc) looks really clean. Someone is going to get a nice quality home.