All Forum Posts by: Karin Crompton

Thanks, Steve Babiak!

Hello! I have a general contractor who is about to begin work on a single-family rehab. However, we've had to replace a water line and have the house de-winterized before he could begin. For those jobs, I hired both an excavator and a plumber, outside of the GC.

Do I need to 1099 the excavator and plumber? What's the delineation for when to 1099 someone and when you don't need to?

Thanks!

Hi, Ann Bellamy - yes, our housekeeper does turnover for us and she's great. A good housekeeper is the most important hire if you're doing this from some distance. We get up there every few months on average, so she's our eyes on the property. I wait to return security deposits until I hear from her on the condition of the house (again, very rarely an issue but I like to play it safe), and if there ever has been an issue, she takes photos of the house and what she found prior to cleaning it.

We have a lockbox at the house with the key in it and change the code for each group, and our housekeeper changes the code for us. This alleviates any issues of how to get a key to the renter and gives them the flexibility to arrive whenever they need to after a specified check-in time. If we were able, I would use one of those electronic lockboxes instead - the type where the guest punches in a code and then the door unlocks, rather than having a physical key - but it wasn't in our budget.

Another key hire for renting from a distance hire would be a local handyman to handle any emergencies that come up while guests are staying there. If something breaks during a weekend stay, I'm not going to be able to get there to do it (nor do I want to anyway, even if I was local!). Luckily for us, our housekeeper's husband is our guy for this kind of thing. He has his own construction business so he normally handles bigger jobs but has treated us great on these smaller issues that sometimes arise. I'd really like to find more of a handyman who does these little jobs instead of bothering our housekeeper's husband (though of course we pay him for his trouble), but he's been great. I just haven't found a local handyman who's quick enough to respond as of yet.

That's probably a longer than necessary answer! In all, we've found the returns to be great and I think it's probably a lot easier than renting it to a traditional tenant. Plus we get to use the place as well, and it's all paid for!

And yes, you do need to check the laws for your city and state on short-term rentals like this. And we do pay occupancy tax. HomeAway doesn't issue 1099s, but we keep track of our own records and pay taxes accordingly.

Great, thanks!

Question - I checked out your template, which I like. How do you agree upon what it means to have a "substantial" completion of exterior or interior work? My idea of substantial and my contractor's might vary.

Also, do you have a percentage in mind for the first payment? I'm wondering how you came up with the $800 initial payment on a $5800 job. I've heard some investors talk about paying for the first week's worth of materials and work, then laying out other milestones after that.

K. Marie Poe, that scenario sounds about right! I'm definitely hearing the, "Oh man, you'd better replace the entire line because if one section failed, the others are bound to fail," etc etc etc. And also that it's allegedly "not that much different" to replace the whole thing rather than fixing one section. Or that it's best to just have it all be new.

We haven't dug yet, but I'd really like to be armed and ready. :)

Hi - I have a couple of templates but am not in love with any of them. Are there any samples here on BP or can someone point me in the right direction?

I'm looking for a good scope of work template that helps detail the work to be performed so there is little to nothing left out; and one that would detail the costs as well, plus, perhaps, milestones.

I'm finding that contractors will quote for an entire job, which is of course better than trying to give me an hourly rate ... but at the same time, how do I know what they're charging for different aspects? Ex: I'm embarking on a rehab that includes new windows, sheetrocking, painting, refinishing hardwoods, etc. I need to spell out milestones so we're clear on when the payments are coming, and I'd also like to know what each aspect costs me. If we have an unexpected expense, ideally I'd love to be able to point to another area of the rehab and tell the contractor to ditch that work b/c of this other cost that arose.

Second - maybe this would be included in the scope of work, but I'd also like to have the contractor sign paperwork that spells out that he/she is an independent contractor.

Thanks!

We bought a house in NH with the intent to do just this, and have had a lot of success w/the strategy. I love it. We advertise on HomeAway and have no trouble getting rentals year-round. We have a 2-night minimum (I learned early NOT to rent for 1 night) and our rates vary by season, plus length of stay varies by season (minimum of 1 week in the summer, for example). HomeAway is the only site we use; we had VRBO as well for our first year and our experience was that we had a different type of renter that came from there, plus I had more tire-kickers and people looking for something cheap who came from VRBO. The ones who come to me from HA are a more sophisticated renter who are also looking to book with the first owner who gets back to them. They've already comparison-shopped and have it narrowed down.

I can't recommend HomeAway highly enough. They have some helpful blogs on there and paperwork; I got our contracts and invoices from there. Also, get a book by Christine Karpinski, "How to rent vacation properties by owner." I read that before we ever bought our place and have very strictly followed her advice. She is right on. Karpinski also has a blog on the HomeAway site.

And here's our property! http://www.homeaway.com/vacation-rental/p255140 We currently have it rented to a family for the winter season. I need to update our spring and summer rates, as the inquiries into those have started already.

Good luck!

Thank you for such quick replies and the great details as well. I'm going to take notes for when I speak w/the contractor again tomorrow. Yes, many variables. Fortunately it's not under a driveway, tho it's a bummer to go under an asphalt walk (about 3'wide) that leads to the front porch.

Joel Owens, the house was built in 1900 but I don't know when the water line was put in. The guy from the city figures it's copper. K. Marie Poe, our plan is to flip the property - it's a single family house - so yeah, the idea of replacing the entire line is giving me heartburn. haha That is, unless it's similar in pricing to fixing a portion of it (which seems doubtful but I'm pretty new at this).

Thanks again to everyone here who gave me some great details. I know nothing about this, all I knew was to stand there and think, "Crap!!!" when I heard the news. And that of course is my family-friendly version of my reaction. ;-)

We just closed on a bank-owned property w/city services and today I had an appt to get the water turned back on at the street. The city water guy told me there's a leak somewhere between the curb box and the house.

I'm looking for some info on what I can expect for work and, possibly, some ballpark on $$. The house is in CT, but it's been in the 40s this week and ground is not frozen solid. Not this week, anyway.

The distance from curb box to house is about 35-40 feet. There's one square of concrete sidewalk to possibly contend with, and the line likely runs underneath an asphalt walkway to the house, then under a front porch of about 6 feet. I don't know where the leak is.

Is it appropriate to expect someone to replace the entire line, or just the portion where it leaks? One excavating company told me it's better to replace it all to guard against future problems, and that it isn't a much bigger deal to do so. I was hoping a company could pinpoint the problem and replace just that section (it is likely copper pipe under there).

Also, I understand cost varies by state and city, not to mention what they run into, but what should I look at as reasonable estimates? I have one right now at $3500-$4000.

Thanks in advance for any advice!

Thank you, Chris Martin, that's fantastic info and I will use it to research the local banks we're considering.

And Jim Lien, thank you for suggesting the construction line - I will research those as well and see what shakes out when comparing the two. You touched on exactly the challenge I figured we'd face: not enough assets in a rehab company to support a business LOC (especially when you can't use the property you're rehabbing as any type of collateral). We will build up reserves as we go, but it's not like we're going to have tons of money in there; our overhead is extremely low.

Thanks again!