All Forum Posts by: Chris Herbert

@David S. Here are my thoughts on the properties you are inquiring about and college rentals in general:

Ralland: these are in a less desirable neighborhood and @Dylan Vargas is right, someone would need to come in and purcahse and renovate the entire street for these to hold much value. 

Arcadian: this area is just far enough away from campus to get a mix between potential college renters and non-college renters. This property is close enough to Enloe hospital that if well renovated may attract some employees. I am not sure why these 4-plexes have been on the market so long.

Klondike: true, these properties are located close to campus, however, they are located in an area that has become a lower income area with less student renters and more of a lower income clientele. It may be difficult to find a property manager to take on properties in this area.

Regarding college rentals: college rentals can be a very attractive investment. A college rental in the right area generally has very stable demand (unless the college drops enrollment like what happened about 5 years back and the demand went down). College rentals generally command a premium on rent, while I don't think it is a good idea to rent per room (individual leases per room) the students generally look towards the amount of rent per room that they would pay as opposed to the total lease rent. College rentals generally turn over every year, however this offers a few distinct advantages (1) this will happen at the same time every year and it will happen when demand to rent is at its highest, this makes for a cycle that is easy to predict. (2) because turnover happens at the same time you can find out 3-5 months in advance if they are going to be renewing their lease you are able to prepare accordingly by advertising and pre-leasing the property months in advance. You can keep your vacant days to a minimum by pre-scheduling all maintenance and cleaning and advertising for a specific move-in date. (3) you will be able to go into the property each year, make the needed repairs and cleaning and keep it properly kept up to your standards. There are other advantages to college rentals: (1) college rentals in this area are not just leased for the school year and are leased for the entire year (12 month leases) including summer whether they are at the property or not so you are not losing rent during the summer months (2) most students cannot qualify without a cosigner so you have often times multiple cosigners that are guaranteeing the lease. 

The downsides to college rentals are that they are generally going to turn over each year so you will have to build some vacancy costs in to your financial models (though you can fairly accurately predict this number because of #2 above). The other downside is that generally college students will be harder on your rentals so wear and tear is higher and items like carpet need to be replaced more often (finding the right long lasting flooring is very important in college rentals).

Good luck in your investment property hunt and let me know if you have any questions about properties, neighborhoods or the market up here in general.

Hi Mick, and thanks @Jeff Macdonald for the intro. I am a property manager and investor here in Chico and can certainly help you out with advice on the management and the team building side. Send me a PM and we can connect.

Jason A. Yes it is absolutely a good idea to make sure that your property manager is checking smoke detectors, CO detectors, air filters as often as they can per your local or state law. This is something they should be doing as part of their management service. We perform an interior inspection every 6 months and test all and replace batteries and filters as necessary. Make sure your lease clearly outlines that the tenants are responsible for ensuring the detectors are operational and the air filter is changed at least every 3 months. Your manager should also be checking all faucets, pipes and water connections for leaks, checking for unauthorized occupants or pets and inspecting for other work needed but not reported during these inspections. Regarding door locks I recommend that you change them or have them rekeyed during each turnover. The best thing to do is have Kwikset Smartkey locks installed so you can rekey everything in seconds. You do not want to be liable for someone getting into the house when your next tenants have possession. You will have no idea how many key copies are out there even if they turn in "all" the keys they were issued.

@Matt Boettinger here is a version that we modify and use:

Notice of Rent Increase

Dear :

This is to inform you that effective ___, the rent for the unit you now occupy at _____will be increased by $___ per month from $___ to $___ per month, payable on the ___ day of each month.

All other terms of our rental agreement continue to remain in effect.

Thank you for choosing to live at ____. We appreciate your tenancy and hope that you will continue to live here for a long time.

Sincerely,

__________________________________________
, Landlord

@Michael Campbell I had a flooring guy I use install it a few years back so unfortunately no longer have the brand or thickness

@Michael Campbell I installed sheet vinyl in a few rentals in place of carpet in the living room and hall areas. In one rental it lasted only one year due to scratches and tears, some likely from furniture. The subfloor cannot have any bumps or they will show through and be visible and tear. It can also be difficult to patch as you would need to cut out the "plank" that the damage is on and glue down a new "plank" to fit. I was also not too pleased with the look of the vinyl sheet over a large area. I will not be using the sheet vinyl in living rooms going forward. I recommend using the vinyl plank flooring even though it is more expensive.

@Jon S. I would offer a short term summer lease (1-3 months) at a heavily discounted rent (low enough to get someone in asap) with the option to renew in August for 12 months at the full market rent. That way you are at least getting some income until August. I would make sure that your rental listing clearly explains the terms so that you can avoid wasting time with calls for the August term.

@Joshua Leite Thanks, I had seen that book but was unsure with so few details on Amazon, I'll pick it up. I'll pm you if any questions come up, thanks for the offer. 

@Gabriel Amedee yes, I used the wrong word, I should have said "honest". If I have predetermined that I am replacing the carpet when a tenant moves (usually only because it is old and worn) then I am not going to charge them for a carpet cleaning or damages. If I am not planning to replace and they damage it then I am charging a pro-rated amount for the replacement based on the useful life of the carpet (If I am repairing damages and not replacing then I am charging the full cost to repair). I may be in the minority here and I understand everyone's stance but I'm not in business to squeeze all the money I can from a tenant's deposit. That said, I will usually be telling the tenants my plan for the carpet during the pre-move out inspection (mainly to let them know if they should be getting the carpets cleaned or not). If I tell them it is getting replaced beforehand I am not charging them for damages. 

@Account Closed how old was the carpet? If over 5 years, you probably shouldn't be charging them as it has fully depreciated. I'll argue on the tenant's side here, even though the burned carpet would make me angry: regardless of carpet age, if you were going to be replacing it anyways I would not charge them. There is something to be said for being fair as a landlord. I also would not make up charges like $200 unless you can provide them with a receipt for that charge.