All Forum Posts by: JJ P.

I don't mind the sin of omission or downplaying that you live adjacent, at least during the initial phone call, but not beyond that.  I would not call myself a "caretaker" if I were the owner to someone that I'm entering into a business relationship with.  That would start the relationship out with a lie.  The contracts are going to be in your name, so the lie would be exposed almost immediately, and surely very shortly after they move in.  

Also, as enumerated many times, it's not the mere fact that you live next door that would be a deal killer for many tenants, it's what happens after that.  Do you respect their privacy?  Have reasonable, neighborly expectations that are not excessive due to proximity?   Is it comfortable or uncomfortable for them to have you so close by?  

I'm sitting tight.  All houses are paid for, all tenants have paid. 2 tenants look more unstable than the rest.    We have no cash flow problems and plenty of reserves, which I hope we don't have to use in the new tenant friendly climate.   Just because we have our hard earned reserves doesn't mean I want to pull them out to supply free housing to formerly paying tenants because the government forgot to help small landlords. 

 We're looking out of town for new purchases and will carry on with the plan.  If prices drop as we're searching (now), all the better! 

Well, since you already own the house, have the 15 year mortgage with a high payment,  and have a vacancy, some of this advice isn't realistic.   I'd say your top priority is the obvious one, get it rented!  

Drop the price, as pretty much everyone has said.  Anything will rent or sell at the right price point.   In the long run, you're far better off renting for under market than having a long term vacancy.   But this is a lesson you are learning the hard way, so just process it and plan accordingly.  

Now, logistically, something is wrong.   No well priced rental would be vacant for that long.   So, first, get your new ads going with the lower price.  When you talk to people, be professional.  Don't sound too desperate, as that vibe will leak through and might scare people off since you're next door.   I suspect that this may have occurred already.    No body wants to live next to a weird landlord.   I'm not saying you're weird, but a management company is arms length, you are not, and you're right next door.  That might be off putting.    If you can't shake the vibe, then a PM will save you money in the long run.   Also a Realtor might list it for a flat, one time placement fee, no costs if they don't get the tenant.   

 Assess or reassess these things:  Are you marketing online?  Do you have good photos? Is your place cleaned up and desirable to live in?  No bad smells or deferred maintenance.  It should show beautifully, with all repairs done,  and be spotless inside and out.   Tenants are also put off when you've got a list of excuses-- "I meant to fix those screens" or " That grease spot doesn't come out." 

We've been kicking around the idea of a Portugal house for years.  I get lots of Golden Visa information from the real estate brokers.  It's a very attractive idea.  I do believe the investment can be split among more properties, correct?

We are currently looking in these areas, esp for already rehabbed Multi family with tenants in place.  It seems like the area is stable and cash flow is good.   I think you are lucky to have such golden opportunities right in your own backyard.  We  live in a high cost of living area, and the investment potential in our area is eclipsed by the entry prices and costs.  The Great Lakes area offers much better returns, and even more if you can put in some sweat equity and self manage, which we would not be doing.  If I were you, I'd stay as close to home as possible, it will make your life much easier.  

 For us, we're casting a broader net.  Send me a pm if you have any in the pipeline that you aren't buying for yourself. 

I don't necessarily "Love" property management, but, as owner/operator of 10 rentals all located within 30 minutes of my home,  it's my job and I strive to do it well. 

 To echo what's been written above, nobody is going to care as much about my money as I do.  These are our investments, our retirement plan, and our wealth building path.  A property manager gets paid for a bad job or good one, and it might be a while until I know which one.  Mostly, good homes with good tenants are on autopilot.  We have Class A houses at a low rent.  The well screened tenants usually stay for years.  The house is sound and doesn't need much, the tenants pay on time and don't need much.  Barring turnover, most of our properties need less than one hour a month, mostly via telephone communication, but occasionally, a repair here or there.  There's just not that much to do.   If you keep your turnover to a minimum, the demand on your time isn't high.  I would say 10-20 hours a year for most of our places.  In cost per hour, it's hard to want to outsource that.  

 A vacancy is a different animal altogether...it's time consuming and expensive.   This is the important juncture to get right. No, I don't love it, but it's crucial to my operation and business success.  I need to get the place in good shape and find a great tenant.  This means spending time and money on  coordination, move out inspections, clean and prep, rehab or recarpet when necessary, advertising photos, advertise, screen prospects, show,  meet new tenants, etc etc etc.  This is our time to go in and do any deferred maintenance on the unit.  Our last vacancy got new fencing and new water conserving landscaping.   A vacancy usually costs us $1000-5000, depending on what's needed and how long it's vacant.   The new tenants always find little issues that have not been noticed and addressed, such as door or window that won't properly latch, a sticky lock,  or a plug that doesn't work.  

With this being the dynamic, keeping our existing good tenants happy is a priority.  Tenants that are nickel and dimed with fees don't feel valued.  There's a bazillion ways to piss off a tenant and erode trust.   I think I can keep open lines of communication and goodwill with my clients, the tenants, better than if I outsourced it. 

Wow!  That's impressive savings.  If I had to do it over, I'd buy a duplex or two houses on a lot and live in one of them.  

If they truly want to help the tenants, then they should be offering relief payments directly to the landlords. Especially of the noted but not compensated 1-4 unit category.   If restrictions were in place, like with food stamps or Section 8 vouchers, it would assure that the funds are being used as intended.  It's not just free money to toss around willy nilly while enjoying the rent eviction moratorium.  I foresee this killing Seattle as an investment market completely.  

I've collected only about $100 of court ordered judgements against deadbeat tenants.  I had 3 bad tenants that cost me over $20K total in lost rent, eviction fees and (massive) clean ups and repairs.   Court judgements don't mean you get your money.   I would imagine that a deadbeat will view this as a free 6 month ride, then drag out the evictions.  I just hope you don't too many bad tenants.   I'm sorry, Seattle Landlords, because you poor people just got shafted.  

I love the comment that "my houses don't know they're worth less."  We're just carrying on.  We had a house that needed to be sold this year, and it's in escrow.  We're replacing it.  The same plan we had, no changes due to market variability.    That means that today, we're selling one and reinvesting the 1031 funds.  We could wait to see if the market dips, before committing to the reinvest on the 1031, but, might as well just lock in the good turnkey one that I've already found,  and get it rented, and then, business as usual. We're minimally leveraged, have good tenants, and don't need the extra work of rearranging the portfolio.   The cost of transactions and the increase in property taxes is also a deterrent.  I'm not going to sell and then hover around with cash in hand looking to swoop on deals.  I might have done that at an earlier juncture in my career, but not anymore.  

 Things are on autopilot and it's all going swimmingly.  We're confident in the viability of our long term buy and rent strategy.  The taxes are low, the mortgages are low and the tenants are stable.  What works for us is to buy nice houses (or make them nice) and rent to nice tenants at below market rents.  They move In and stay for a long while.   We won't be changing a thing.  Well, actually, we're just going to be very, very cautious about the stability of any new tenants.  There are eviction moratoriums and we're in a tenant friendly state to begin with (California). 

I'm a pet owner, and my pets put a lot of wear and tear on my own house.   This very morning I had to scrape rat innards off of the carpet.  SUCH a lovely way to wake up!  The cats hunt and that's just how it goes.  Thanks kitties!  Even great pets have accidents or quirks.  

Most of our homes have nice fenced yards, and lots of people, especially those coming from apartments, want a nice outdoor space to share with their animals. In our semi-rural area, it's more a question of keeping pet numbers down.  The cost per pet keeps a tenant thinking about it.

  Our philosophy is to have a great house to attract great tenants.  While I agree with JD's post above, we do charge extra for pets.  It's been $25 per month per pet, per month (dogs and cats only) plus (usually) $100-150 extra deposit.   

1) Our places are generally on the low end to very low of market rent in a strong market.  Most of them are $300 or so under market. Charging a pet fee helps offset that.  That $25x 12 months is only $300 a year. 

2) We have nice, well kept homes. So flooring, screens, door jambs, etc will be repaired or replaced if  damaged.  Odors lurk, so the carpets are usually replaced.  Venting and ducts might have to be cleaned and filters will get replaced. Deep cleaning is a must, and that takes hours.  Our Merry Maids are $32 EACH per hour!   Exteriors have to be cleaned up and manicured, holes filled in, etc, especially with big dogs.   We try to give a pristine unit to the tenants when they move in, and restoring them time after time to this condition is costly at turnover time, even with good tenants.