All Forum Posts by: Jose Remor

Hi @Brandon Garcia, I think most first time landlords make this mistake. They do not set up the right systems and then pay for it later. I can guarantee you this will happened because I made the same mistake with my first rental. Whatever you do, I strongly recommend avoiding Zelle. I understand you want to get your cash instantly but you're leaving yourself open to many risks with using a Zelle, Venmo, cash app, etc. 

Use a system that allows you to do the following 3 things: automatically charge a late fee, track all paid and unpaid invoices in a clear ledger, prevent tenants from paying partial payments.

At this moment, you're also just asking about how to collect rent. Let me ask you a question - How are you planning to mange all of your rental property finances (vendor payments, taxes, insurance, mortgage, reconciling rent payments, understand how much money you're actually making, have clean financials for tax time, etc.)?

The reason I ask is because the second biggest mistake I see new landlords making is not organizing their rental finances. This may seem trivial now, and not something you need because you only have one property. However, let me reframe it for you. If you want to scale, and be a pro investors, It's about building the right habits, and establishing the right systems and processes, now, not later. That's actually why I joined Baselane 3.5 years ago to build a platform I know I needed to run my rental business and to help 15M landlords in the U.S. do the same. Hope that helps. 

1) The tenant should ask the construction company for reimbursement. 

2) how much money we talking? In Vegas 1,000 gallons would be $1.10. And that’s in the desert. A hose uses about 1,000gph wide open. So MAYBE you’re talking 5,000gallons? Or 10,000 if it was all day? So $1-$5-$10?

3) They definitely shouldn’t have used water without asking. How does the tenant know they did? Came home and made them stop? Came home and said ok? Or just “The bill is high so it must be them”? You;d hate to accuse them and then find out they bring their owne water, or use hydrants, or don’t even have garden hoses. 

@John Williams, a few comments:

1. IMO the 1% is just rule of thumb for filtering potential deals. If you are looking for cash-flow, you can apply the 1% rule and scan through many deals and then only focus on ones that have potential cash-flow. That's about all its good for.

2. Cash-flow is KING! Yes, appreciation has the potential help you hit the jackpot and make you more wealth. However, cash-flow is better for a number of reasons. Perhaps the most important of which is that its more predictable and more CONTROLLABLE. Except for forced appreciation, you have no control over appreciation after you buy a property whereas you can make decisions along the way to improve your cash-flow. Raise rents, reduce expenses (shop insurance, appeal taxes, refinance, etc).

3. You mention tax benefits. That is where cash-flow shines as you have an income to use those tax benefits with.

4. Appreciation is EXPENSIVE! Yes, it costs you money!!! Its locked up in the equity of the property and it will cost you money to touch it. If you sell, you pay closing costs, commissions, taxes (including depreciation recapture), etc. Even if you refinance, you have origination costs, appraisals, etc.

So, while cash-flow is tax advantaged aka CHEAP; appreciation is EXPENSIVE!

5. Most beginning investors need to and should invest for cash-flow. Most small time investors can't afford the risk to buy and hold a property that doesn't make money in HOPES that it appreciates enough. In additional new investors are more likely to understand cash-flow than how to predict appreciation.