All Forum Posts by: JD Martin

This was an interesting thread. Personally, I wouldn't allow it, and not because I have any real objection to it in principle. I wouldn't allow it because of the ambivalence that exists between state and federal laws regarding this issue. I don't want to be the test case on the legality of seizing property, amassing fines, or facing prosecution as an accessory to anything. There are just too many other people to rent to for that kind of risk. Yes, you might be able to make more money, but you can also do lots of other things, legal and illegal, if more money is your only objective.

Actually, it sounds like the neighborhood was already sketchy, if there were vacant houses to be targeted by arsonists. I wouldn't worry about the tenants so much as the long term viability of the house as an attractive rental. I'm not sure what I would do; it would depend on what I had in the house, what the profit margin was, how much turnover.

 I think that is the takeaway from this discussion is that it makes good sense at a small level, can be a hassle and complicated if you have a lot of properties. It probably also depends on if your state is landlord or tenant friendly.

It depends is what I would say. If the market is hot, I would rent at market, if it is saturated I would probably go a hair lower to get a better crop of applicants. But I like to be positioned stronger against my competition so that the potential tenant knows this is the best thing going. Other people are willing to wait and have more money, which is not wrong, just different as a philosophy.

 It's all good! I was replying to several different posts at the same time, sorry that it appears that my comments were directed towards you; I was actually agreeing with what you said :) . PS: Being new here means absolutely nothing, just as being old here means absolutely nothing. Plenty of people with 10,000 posts just like to hear themselves talk, while lots of people with 10 posts have something good to say (again, not referring to you personally :)  )

 I couldn't have said it better myself. And you also made a good point in eviction proceedings, depending on the state you are in; TN is similar to Louisiana, in that the process is very fast in cases of non-payment, so worrying about someone stopping things by depositing half the money is a non-issue.

Marcia, if you are talking about hundreds of properties I can see it being an issue. I deal with a few of my own properties, have good tenants that have been carefully screened, make good money, and are genuinely good people. Is it possible that this could cause me an issue? Sure, anything is possible, but I just don't see it. One of the advantages of being a small, hands on owner is that I know all of my tenants, properties and situations intimately. There are so many variables that just blanket stating that direct deposit into your account will cause problems is a poor claim not backed up with facts for the majority of landlords. If one assumed some outrageous figure like 20% of all tenancies ended in eviction proceedings, and then expounded on that by saying half of those would be professional scammer tenants, what you would have is a scenario in which 90% of all tenancies were problem free. I just think we need to keep perspective in that the possibility of a rare problem should not preclude one from employing useful tools. Maybe we know different people, but my own anecdotal experience from myself and the landlords and tenants I know says it is a non issue.

I'm not sure if I would take them on or not. I would be more concerned with their long term ability to pay than being able to come up with an additional month of rent or deposit.

It does sound like you are on the right track. 15 or 20 year mortgages are not going to allow for much, if any, cash flow. What you are doing is building your overall net worth rather than producing a monthly income. That said, it is impossible for anyone to answer without seeing real numbers. You may have overpaid for the property; you may be getting ripped by the PM; you may have rent set too low; or maybe everything is fine - no way to tell without posting up real numbers, which you probably don't want to do in a public forum.

For someone like Steve I can see how allowing the tenant to deposit would be unmanageable, with 500 properties. I am nowhere near anything like that so I can do it this way.