All Forum Posts by: John Clark

Quote from @Sujith C.:

Hi,

With Williamson county appraisal for 2022, my rental property tax due increased by 35%!!! I already raised the rents by 16% last year and now this.

Would you think rents will grow to catchup with property tax increases? I am afraid that people would stay away if I increase the rent by 35% and would be difficult to rent it out. If I do not increase, I would be under the water. Suggestions/thoughts?

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First, rents do not have to increase by 35 percent in order to "catch up" with property tax increases. Property taxes are only one component of all expenses, so the question is whether the sixteen percent rent increase covers your total increase in expenses plus additional risk and return.

If your expenses (and reserves are an expense) are greater than rents (which are set by the market), then sell or go bankrupt. Otherwise, your rents should be determined by the market, not by expenses, and certainly not by one component of expenses.

How much is the principal worth to you?

What evidence do you have that the furniture was yours?

Did your lease mention the furniture?

What evidence do you have that it was the tenant that actually took the furniture?

Are you willing to go through the time and aggravation?

Did you file a police report at the time you discovered the furniture missing? Residential burglary is a serious offense, so if you cannot prove tenant took it, then why would you let a serious offense slide?

I wouldn't City subsidies I wouldn't mind if they were means tested. Cutting taxes means that the whiners complain about tax increases when the taxes are restored.

Personally, I would do means tested CTA bus/train card give-aways. Good for the environment, cheaper. Bring your paystub to prove both that you work outside of your neighborhood and your low income and City Hall gives you a reduced fare buss pass.

Who are your neighboring landlords renting to? If your area is a college undergraduate area and always will be, then you probably have limited upside potential for rent increases. If it's graduate students, you have more leeway. If it's to natives and not students, then you have he most leeway.

I would get the kitchen flooring replaced, as that takes a professional, and when done will last for years. It also can't be explained as just "style" -- it's worn. Everything else leave alone. See if you can raise the rent to cover the flooring.

A condo will put you at the mercy of a condo board, which may not allow renting out, or there may be too many renters to allow additional renters, or whatever. That means you could be stuck with a slow-appreciation, expensive, unit that you cannot unload.

How about looking at a duplex? Live in one unit, rent out the other. Just one tenant (who you must thoroughly screen -- no glad-handers or drama queens) and see if you like being a landlord. After a few years see how you like the life and move on from there.

It's not important to get big fast. It's important to start.

"...change request of 12 acres of land from single family residential zoning to planned development zoning."
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Not enough information. What types of buildings are allowed in a "planned development" that are not allowed in "single family residential" and to what extent are such buildings allowed? Also, what is the economic mix of the planned development? If the PD allows 100 apartments, how many of them have to be affordable housing? There are lots of other factors, but you get the idea.

First, check with your renter's insurance policy company regarding claims and reimbursement.

Second, see a lawyer about a breach of your rights. Don't let landlord tell you to contact homeowners' association and vice versa. My motto: Sue 'em all and let God sort 'em out.

Quote from @Dominic Castleberry:

Seller verbally agrees to sell their property at a agreed upon price but changes their mind,. . .  I do have the agreement recorded.

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What do you mean you "have the agreement recorded"? Were you wearing a wire during your conversation? What is the state law regarding recording someone, with or without consent? If you were recording a telephone conversation, you need to check federal law too, as your phone is used in interstate commerce.

Talk to a lawyer before you do anything, including maybe slandering the guy's title.

Quote from @Jake Paul:

For him to avoid capital gain tax, should he gift me the property?

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You make no sense in most cases. Gifts above a certain amount (circa $15,000) are taxable to you (the recipient) as ordinary income, which I suspect is more than 15 percent -- with, of course the deductible of said $15k. Offset that with whatever deduction your brother might be able to make from the gift (above the self-same $15,000).

Long term capital gains tax is what, 15 percent? Which can be offset by long term capital losses.

You cannot focus on just one tax. You have to look at all potential taxes and plan accordingly.

Quote from @Tristan Moylan:

Should I buy three $100k houses with cash, refinance and use the money to invest into another 3 houses. (or buy one $300k home and do the same.)

Buy three cash properties and save the cash flow until I can buy another all cash.

Buy multiple homes using traditional mortgages.

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You have no experience as a landlord, right? Any you are in the service, which is not conducive to landlording for beginners. And now you want to leap in and buy 3 houses? You may not even like being a landlord!

How about you use your time now to research the area you want to buy in and what's available there? Then use your VA loan and buy a three-flat. Live in it and get some tenants. With any luck you'll have one good tenant and one prickly tenant and you'll learn something (like how to screen tenants) from your first couple of years living there. Then you will know what you can handle and how to handle it. At that point you can refinance out of your VA loan (restoring your VA eligibility), buy another/more multifamily properties using VA again and living in it, and THEN decide how to use your trust fund.

Keep in mind you're going to need capital for your start up costs as a contractor. Also, it's important to start, it's not important to get big fast.