All Forum Posts by: Joe Splitrock

 Barring just one tenant could appear retaliatory. I understand their lease may not grant access, but they previously had access. Singling them out could create troubles. If you raise their rent, them moving out may be the best possible outcome. You could raise it to $1200 and tell them it will go to $1400 next year. It is not your responsibility to solve the affordable housing crisis. Tax payer money goes to subsidized housing and section 8 programs. You can donate to local rent assistance programs. Keep charity separate from business. I assure you that your utility company, tax auditor and insurance company could care less about keeping your costs low. Failure to plan for these increasing expenses will put you in a bad financial situation. 

 I use Schlage wifi connected deadbolts on my short term rental. You can give everyone a unique code and control hours of entry. You can issue and take away codes on the fly remotely. You can remotely lock and unlock. You can see who locked it, who unlocked it and what time of the day every even occurs. I would also strongly encourage a self closing door. Odds are good that someone is leaving the door unlocked and not fully closed, then wind is blowing it open. Self closing prevents this in the case where someone fails to lock. With remote lock, you could check it and lock it. This solution would cost about $400 total and you would need access to someone's wifi. It wouldn't use any actual bandwidth, so not a burden on your tenant.

If you want my honest advice as a landlord of 15+ years, I would remove laundry. Explain to your tenants that the cost has become too great due to negligence. I would also send your legacy tenant a rent increase letter to $1400 a month. Explain that costs are increasing and tell them you understand if they choose to move out. Being flexible and forgiving will mean that tenants take advantage of you. I had to learn this lesson the hard way like you did.

Treat people with respect and fairly, but protect your investment. A flooded basement could be thousands of dollars in damage. You can't risk this again.

This can be regional. Having a fridge is expected in most parts of the country. Every rental in my market includes a fridge, even low end properties. I have had a couple cases where the tenant removed and installed their own. The higher quality the rental, the nicer the fridge. Don't put a tiny fridge in a big house. I try to put the biggest fridge that reasonably fits. Nobody wants a tiny crappy fridge.

@Russell Brazil I think most of the midwest does have appliances. It is just a couple rougher markets where it seems optional. 

Some options:

- Install cameras and have each tenant sign a use addendum that states they are responsible for any damage if they are caught leaving the door open. Any apartment commons area should have cameras.

- Install freezer door alarm. These are battery operated and set off an alarm after being left open for more than 1 minute or other programmable time.

- Install a self closing door, so it swings shut after they leave. This should be on any commons area apartment door.

- Install a freeze alarm that will remotely alert you when room temperatures dip. 

- Install anti freeze wrap on the pipes and cover in foam wrap. These are common under mobile homes. They have a sensor that turns on and heats the pipe at a certain threshold.

- Put a code lock on the door to get in and out with each tenant having their own code. Tell the tenants last unlock code is responsible for damage. This also keeps strangers out of your laundry room. I have heard of neighboring multifamily using a laundry room in the building next door and causing problems.

Removing may be the easiest solution, but it could alienate your tenants. It is a pain to not have on sight laundry. I am sure they would understand, but they may choose to move when their lease is up. How do you secure the room currently? Is the outside door even required or could you lock it.

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 The government subsidizes and supports real estate, including paying rent for tenants during COVID. That is because housing is a fundamental human need. Bitcoin is not a fundamental human need. There are thousands of other crypto coins that serve near identical function of Bitcoin. Some are actually more environmentally friendly, more stable and more secure. Bitcoin has first mover advantage. Most of the reason that crypto gains value is hype and emotion. This is true of every investment to some degree, but the difference with crypto is no underlying value. Even if a company runs into financial trouble, there is generally underlying assets. Equipment, real estate, intellectual property, etc. In the case of crypto, nobody owns the intellectual property. Coin holders don't own the hardware network required to run it and the only incentive to keep the network operating is mining or transaction fees. Mining hardware and electricity are expensive, so if the value tanks or transactions fall to low levels, the miners shut down. The only way that value increases on crypto is if more people are willing to buy it. In that way, it is really a digital Ponzi scheme, because it needs more and more investors for it to go up in value. Compare that to a business/company. A company can go up in value by increasing it's customer base, increasing it's product offering or increasing its prices. 

Everyone is happy when their investment goes up, but as the only financial warning says, "past performance does not predict future returns". 

People made massive money from DOGE, AMC and Gamestop over the last few years. It is all junk, but if you can understand the emotional appeal, you can make money. It is just knowing when to get in and when to get out.

To get the designation means doing real estate professions full time. There is no way to hold a full time (non REI) W2 and qualify for real estate professional status, unless you are married and your spouse has that status. That being said, you can still use tax losses to shield your real estate income from additional taxes. I think sometimes the "pay no taxes" part is over stated. It is not that simple and it may be more accurate to say deferring taxes. That is because when you sell real estate, there is depreciation recapture and capital gains. If you do like kind exchange and hold unit death, that is your only way to totally avoid taxes. That sounds great, but how many 90 year old are active in real estate. I know every 30 year old says, I will be, right...

 That is not what I am saying. I am saying you can and should retain great long term tenants. I am just saying you can do that AND increase rent or at least keep it the same. You believe your discount is why people stay, but it is not. They stay because they like the property and it suits their needs. Of course your rent needs to be market competitive but not decreasing over time.

Think of it like a seller that is selling their house for sale by owner. They offer it for sale at $200,000 and every comp in the neighborhood is $260,000. They tell you "maybe I could have gotten more, but I sold really fast and no realtor fees". Any good realtor would quickly point out that you could price it at $250,000 and it would STILL sell fast. After realtor fees, the seller would walk away with more money. In other words, there is no benefit to grossly undercut the market.

 Yes, seen this movie before. Peer to peer file sharing, tax free online purchases, open source software and all the other technologies to change world. In the end corporations and the governments win. 

There is no rational debate I could ever have with you, because you ignore everything negative relative to crypto. 

Bottom line, I am pretty unbiased about crypto. I don't own it and don't care if it succeeds or fails. Even if USD failed and everyone switched to BTC, I can just collect rent in BTC. I don't care what the currency is because I own physical assets with intrinsic value. BTC has no intrinsic value.

 The reason crypto is appealing is the reason it will fail. Transferring billions across country boarders without paying taxes. How do you think we pay for social programs and entitlements? Do you think the crypto millionaires will win over the masses that are seeking hand outs? Do you think the government will transfer financial power to some decentralized collective? Our national debt is 130% of GDP currently, so how does this machine keep running when the Fed loses control? No control means no way to manipulate the money supply. Sounds good to you, but not people holding power. If you think an economic crash will see Bitcoin rise higher, you are sorely mistaken. 

Another reality is that decentralized doesn't mean free to operate. The miners are compensated on transactions and more importantly rewarded with coins. If prices collapse, miners lose incentive. If it crashes far enough, the electricity to operate costs more than the reward. It takes a large number of computers validating the blockchain to keep it secure. Take 95% of them off line and you open up to an exploit, where controlling miners rule (51% exploit). Take away incentives and theft becomes a motivator. You have places like the Ukraine and Russia where hacking is a life career and these countries would happily see the US fail.  

The problem is once crypto collapses, it becomes worthless. Nobody will want to buy it. The media will hate it and there will be no mass adoption. Billionaires who promoted it will be hated and blamed for people loosing their retirement savings. Miners will liquidate assets, cancel lease contracts and default on utility bills. 

These next few months will be very telling. As interest rates increase and money supply tightens, we will see what happens with Bitcoin. 

@Eric Carr all this wonderful news you keep posting, yet Bitcoin is worth less today than it was one year ago! Maybe it is the news you are ignoring that is the big story.

Biden is issuing an executive order on crypto directing government agencies to study crypto. The main objective is regulation and taxation. The government realizes that crypto has been a haven for money laundering and tax evasion. People buy things with crypto and don't report the gains. People who buy things with cryto are not aware (or more likely don't care) that they need to pay taxes on the gain. Buying things with crypto comes with a big tax bill, for those who got in early. This is the trouble with the idea that accepting Bitcoin will force its value up, because it forces a huge tax bill on people. You are actually better off as a Bitcoin investor if nobody accepts it, because then nobody sells it.

The second goal is for the government to explore a crypto based USD. Some have argued nobody wants a government based crypto because the decentralizes aspect of regular crypto keeps it out of government control. This is the problem. The government will control crypto in the end. People who think this won't happen have a fundamental misunderstanding of power. So what is the appeal of crypto once the government has control?

Notice that the value of Bitcoin surged when the government started flooding the economy with cash? Notice the value has stalled as that cash has all been spent. It isn't adoption that is driving up value, because Bitcoin has had more "good news" in that last 12 months than the previous 12 years. Despite that, Bitcoin is worth the same it was 12 months ago.

Notice how the super bowl had several crypto commercials? Crypto is reaching a feverish level and they need new customers to feed the frenzy. I have referred to it as a digital pyramid scheme. You need more new investors continuously to pay off the ones that are cashing out. At some point there are no new investors, the music stops, everyone runs for their chairs and you have a crash. 

@J Zev J. made a good point that "scarcity doesn't necessarily mean it's valuable". Keep in mind that Bitcoin is artificial scarcity. A good analogy is baseball cards. I used to collect them back in the 1980's. The value skyrocketed due to limited run sizes. Up until the 1980's there was one baseball card company, Topps. Then Fleer, Donruss, Upperdeck and others came out with sets. They all released "limited edition" runs in an effort to create scarcity. In the end, the value of ALL baseball cards plunged, including Topps (the original). The point is although Topps was limited, baseball cards where not. Other brands substituted and were the same. The only advantage that Bitcoin has is being first. The main reason to pick Bitcoin over substitutes is historic raise in value, which gives investors like you confidence in future gain. The problem is new investors want to ride up 400% gains, like you did. They want new emerging currencies. This hurts Bitcoins value and hurts confidence in future gains. The point is, you are not buying a scarce commodity. It can be copied and it has been copied. It can be made better and will be made better.