All Forum Posts by: Jim Adrian

Tearing it down would be my last option.  If you build a tri-plex are there others in the neighborhood that would allow this to blend in?  Assuming there is not.  To build new, you lost 8 months of rent that covers your mortgage that you would have to cover on top of new construction cost.

You should look at your insurance numbers as they seem low (48*12=$576).   Cash flow looks good.  Look at the management fees.  Will the 11% cover both units?  Typically I see people say 10% for one sfr. 

When the tenant leaves take photos of everything and video walk thru the unit.  Save this for proof.   A tenant of 7 years I would let break the lease with no fee.  I would not charge for nail holes and painting as this is wear and tear.  I would give the walls a good cleaning and see what they look like.  Most likely you will need to repaint the entire place.  Review your lease to see what you can charge them for.  You should have this spelled out, if not update your lease.  This should include fees as well.  Items  truly damaged and or with holes needs to be replaced and fee charged.  Keep all receipts of work for proof.  Fix the water leak.  Now would be time to rehab the unit.

I have added (suggested) after some of my requirements in fear of scaring people off.   At the same token, scaring them off, help weed out the problem people.   I do have score sheet as well.

Big cost items are moving plumbing, moving mech etc.  Why is this a complete gut job?  I bet there are areas that don't need to be gutted.  Plans and scope of work is key.  Having plans established quantities and eliminates the unknowns.  Maybe create a list of "needs vs wants" and see what you can cut out.  Someone is going to have to draw up plans to get permits before any new work can start.  You can demo without a permit typically.  May be its time to regroup and get plans first.  Then get multiple bids.  Chalk up the extra cost as lesson learned.

@Rocky Lalvani

If the holes are from nails hanging pictures then that's wear and tear but if its 6" or bigger that's a fee.  If the carpet wasn't brand new when the moved in then its wear and tear, no fee.  A lot times the cheapest carpet is units and wont last 3 - 5 years.   Be careful about nickel-and-diming.  You should (need?) receipts showing proof of work or materials.  

Sounds like a lease update is needed to include "Condition of Property Assessments" that include a price break down for damages.  This way damage fees are already defined and agreed to at the time of lease signing.  Simply reference the item.   I include move out instructions on here as well.  Here is a portion of my fees.

Assigned Assessments:(if applicable)Assessment Charge:

1. Refrigerator to be clean$75
2. Range/Oven to be clean$75
3. Bath/s to be clean$25 per fixture
4. Painting of Woodwork fee$30/sq ft
5. Garage to be cleaned out of trash & swept out$25
6. Driveway to be clean of oil and debris$25-50
7. Gutters to be cleaned (yearly)$75
8. Yard to be mowed & trimmed properly including shrubs/bushes$50+
9. Walks & drive to be clear of ice and snow$50
10. All light fixtures are to have the proper sized working light bulbs$20/bulb
11. Rooms to be in good clean condition$75/per room
12. Attic Ventilation – Repair (per Care of Premises)$200+ minimum
13. All trash to be removed and hauled out (dumpster rental $200)$25 or at cost
14. All keys to be returned$20/key
15. Carpet replacement$15 sq yard
16. Carpets / floors to be professionally cleaned$75+
17. Carpet / floor stain removal$15/stain
18. Basic Labor Hourly rate for repairs$40 per person
19. Plaster wall repairs ie nail holes and etc$25/hr
20. Drain lines pluggedAt cost
21. Wood floors scratches or repairs beyond wear and tear$50 or At cost
22. Ceiling fans cleaned (blades and light fixtures)$40
23. Items not covered$25 or at cost

It helps to inventory the condition of the place and note remaining life expectancy on equipment.   Ie AC&Furnane is 10 yrs old so it has 10-15 yrs left. Replacement cost at ~$7000.  So $7000 / 10 yrs = $700,  $700 / 12 months = $58.   But this depends on the condition of the house and not everything will break at once.  Remember to look at the numbers and see what you can buy for that amount.  % may need to be higher due to buying power.

I use 10% for capex, 10% repairs, 6% vacancy (1 month of mortgage and utilities) and 10% PM.  I like to keep at least 5-10% of the property value on hand.

Here is a link to typical life expectancy of items.

www.nachi.org/life-expectancy.htm

Backlund.

 All this is true. All depends on the conditions of the building.  Too many unknowns to give a single answer.  If you have the slope of 3:12 then go for asphalt. 

This would be considered an alteration to the property and this is not allowed in my lease.  Would I get upset, no.  Would they be removed, most likely.