All Forum Posts by: Kimberly T.

@Tom Shepard looks like Michael gave you some good info. Another thing to consider are the costs you'll have every month with a MF. With a SFR, you typically have the tenant pay all utilities, clear snow, etc. For a MF, you will generally be paying some utilities yourself every month (water/sewer, trash, maybe others too) as these are often done for the whole property instead of being individually metered, and you'll likely have to pay to have the parking lot cleared when it snows, so you have to figure those costs in when determining what your ROI will be. Something to look out for when analyzing potential deals: see which utilities are separately metered, and which utilities the landlord pays for. I've seen large complexes where the owner pays for everyone's electricity - yikes!

Loopnet is geared more toward the bigger (more expensive) properties, and commercial stuff.  There will be properties on Loopnet that aren't on Redfin, there will be properties on Redfin that aren't on Loopnet, and there will be some that are on both sites.

Some others have already said these, but I will state them again...

- My husband and I show the unit together - it would be pretty hard to take us both down without some noise

- We schedule multiple showings around the same time (say, one or 2 showings every 15-30 minutes).  This keeps a consistent flow of people coming through so we're rarely alone with one prospect, and they know that even if we're alone at the moment, we won't be for long.  My husband and I both wait out front for the first showing, then one of us goes with the first prospect to show them the unit while the other waits out front for the next prospect to show up (we tell the first prospect that's why the other is waiting out front, so they're aware that other people will show up any minute).  Scheduling multiple showings together also has the added benefits of saving us from making lots of trips to the rental, and also creating a sense of urgency to apply since they see there's a lot of demand.

@Frank B. That is actually what we started doing, because I thought (like you) that doing it as a % of the rent is absurd.  We have rentals in CA that rent for more than twice the amount that our rentals in AZ rent for, but things don't cost twice as much to fix/replace here as they do in AZ.

I also agree with @Neal Bratton that your planned holding period will affect your estimates.  We only plan to hold our CA units for about another 5-ish years, so we're not setting money aside for some of the bigger ticket items (like roof), because they won't go bad before we sell.  We have no plans right now to sell our AZ rentals, so we do set money aside for that stuff.

I literally sat down one day and did what you did, just wrote down all the stuff we spend money on, estimated the cost, estimated the frequency, and then figured out how much to set aside each month.  For our CA units, it came out to about $25/unit/month (again, not planning for big ticket costs since we're going to sell it), but for our AZ units, it was something like $85/unit/month.  That's for everything - capex, maintenance, repairs (not PM, though).  I'm considering breaking it out into separate amounts for capex, and maintenance/repairs.  I'm also considering figuring it out as a % of the rent and updating it accordingly every so often, because setting it at a fixed dollar amount doesn't account for inflation.  In other words, I can't leave it at $85/unit/month for a decade because that won't be enough in 15 years due to inflation.  So I'm thinking I'll convert it to a % of rents and adjusting it, say, once a year.

But I absolutely think these numbers need to be figured out on a per property basis.  It is very dependent on things like the type and quality of roofing, type of hvac system (boiler? gas furnace? central a/c?  no a/c?), amenities (does it have a dishwasher I'll have to replace?  fireplace I'll have to sweep?  garage door I'll have to service?), etc.

Well, off the top of my head:

- Pros with using a realtor: you don't have to screen/interview prospective tenants (saves you time/effort)

- Cons with using a realtor: they don't have an incentive to get a good tenant (assuming you will be managing the property yourself once the tenant is placed), costs you money

- Pros with advertising/showing it yourself: you can set your screening criteria and make sure you get a good tenant, you don't have to pay a realtor

- Cons with advertising/showing it yourself: you have to know the fair housing laws (ie, discrimination), takes a lot of your time to show it to people

Do you have access to good applications and leases (and other landlord/tenant forms) you can use?  Do you know what you can and can't discriminate against?  Do you know what good screening criteria is?  Do you know if you can trust the realtor you might use?  Only you can determine which route is better for you.

My husband and I handle it all for our local units, but we have PMs who handle all that for our out of state units.

Oh my, there's too much to see in CA for you to see it all in 2 weeks.  My husband and I spent nearly a week in Yosemite National Park for our honeymoon and still didn't get to see it all.  There is camping there, but I think you'll have to check what available/open for when you'll be here, as I think the weather might make it inaccessible, but I'm not sure.

There's plenty to see in the LA area - Hollywood walk of fame (where all the stars are on the sidewalk with people's names), Griffith observatory (which I think is open again, but verify that), La Brea tar pits (yes, legit tar in LA), museums, Reagan presidential library, missions, etc.  I honestly avoid LA county, though, just personally.  Orange County has some awesome beaches, museums, missions, hiking, etc.  Laguna Beach is very hipster, if you're into that.  Going up the coast is beautiful too, up into Santa Barbara.  The Santa Barbara mission is gorgeous (it's the "queen" of the missions).  Up into San Luis Obispo/Morro Bay, that's all amazing-looking area, lots of open land.  There's lots of wineries in Paso Robles, which is another cute town there, so if for some reason you can't make it up to Northern CA, you can get your winery fix there.  Or in Temecula (down in Riverside county), they also have some wineries.  That's a cute town too.

If you're looking for real estate, you're kinda late to the party, but I've been hearing that there are better deals inland than there are in LA and Orange counties.  You can check out the Inland Empire (Riverside - San Bernardino - Ontario area), I've heard of people getting better returns out there.  I grew up in Riverside myself, and there's some stuff to see there, too.  Dowtown, oh and the Mission Inn!  If you like architecture you can check that out. It's not an actual mission, it's an old hotel made to look like a mission.  Lots of US presidents have been to it; Nixon even got married at it.  Don't need to stay there (it's super expensive), but you can walk around the area and check out the architecture.

There's camping all over SoCal, but I'm not sure what you consider "camping" as I'm assuming you're not bringing a tent and stuff with you to AZ.  You can rent cabins up in the mountains, like around Mt Baldy, Arrowhead, Big Bear, etc., if that's what you're looking for.

I don't know how much you've dug into landlording in CA, but CA is incredibly unfriendly to landlords. Something to consider. My husband and I personally won't buy any more rentals here, and plan to sell our current rental in the not too distant future. If you're interested in rentals in the southwest, you may actually want to look in the Tucson and Phoenix metros. AZ is more landlord-friendly, is cheaper, and has better ROI than CA. Just an idea.

Hope you have a great time on your trip!

Hmm, well I can tell you the things I researched when looking to invest in other markets. In no particular order, off the top of my head: landlord-friendly laws, no rent control, population trends, total population in the metro (I won't invest in super small metro areas/towns), unemployment rate trends, vacancy rate trends, income trends, rent trends, economic trends for the metro, weather (as it pertains to potential expenses - i.e., I don't have to worry about clearing snow from a parking lot in Scottsdale AZ), purchase price, expected ROI, how fast you can evict, insurance rates, and property taxes. There's probably more, but that's what I can think of right now. Obviously there's no market that's going to have great numbers for every single one of those aspects, but we kind of weighed them all together to come up with a few metro areas that looked good.

Once I found some markets that looked interesting, we then narrowed our search to specific areas within those metros.  That was generally based on things like crime rates, schools, etc., in different towns, or different parts of town, within a metro area, so we found which neighborhoods we were willing to buy in.

We do the same as Dawn.  We keep our rents a little below market, only show the unit once it's ready to move in, and always maintain our properties in order to stay competitive; our tenants just can't really find a better deal than what we offer.

I agree with @Mike Krieg , assuming you don't currently own your home (well, maybe even if you do).  The one thing my husband and I wished we'd done differently was buy a multifamily first, THEN the house for us to live in.  Oh well.  Depending on the area you plan to buy in, that amount of money may very well be enough to put 5%-10% down for an owner occupied multifamily.

I have heard of tenants suing landlords for libel/slander if a previous/current landlord said anything negative about them.  I don't know of any cases personally, but that's the reason I've heard as to why some landlords don't divulge any info about current/former tenants - they don't want to get sued.

I've heard of similar situations about employers not saying anything regarding current/former employees.