All Forum Posts by: Kevin McGuire

@Pat L. well put! 

@Josue Vargas and @Pat L.  in that sense I can think of the ideal landlord-tenant relationship as one of mutual benefit, with some goals aligned and some differing.

@Vincent Marec I’ve not heard of it but am interested in the area so thanks for this post. Do you have any research you can shoot our way?

Thanks all for your answers.

@Allan Smith I'm trying to define the tenant-landlord relationship I want, and therefore the informal and formal policies. Is it relationship-based or purely transactional? Do I simply seek to net out ok financially or should I constantly be striving to extract more money? Some specific examples:

1) I have a tenant who I inherited with the unit I bought. The appliances were her own. She wanted to get rid of them and she asked if I would supply new ones. Usually rentals come with appliances so I said sure. It required a new lease. I could've asked for more rent on the new lease to cover my increased costs but I did not. She's a really great tenant: pays on time, takes great care of the place, and has said, "I'm happy to rent here forever". I view her as an asset; you would love to have this tenant in your property. 

2) I have a new property that wasn't in very good shape. I live in a different country than my properties and didn't see the place myself when I bought it. The new tenant was complaining about various issues. At first my property manager interpreted her requests as "high maintenance". When I was in town we toured it with her and, you know, she was right, the place wasn't great. Some issues turned out to be quite important and we hadn't realized it (e.g. plumbing issues which didn't show on inspection but could've been disasters down the road). Some were just cosmetic though and I could've said, "rented as seen". But I kind of like the fact that she's picky because I think it's an "ownership" mentality and she'll take good care of the place. But if I don't, she probably won't either. She's either a liability because she's time consuming and requires me to spend more, or an asset because I know she'll be a good custodian of my property.

3) I have another property that's in poor shape cosmetically. The rent is commensurate. The tenant has a pretty easy going attitude about it all. As my property manager put it, "I kind of wish she was more demanding", because I don't think she's a very good custodian; there could be issues needing attention she'd not say anything about which in time could get costly. I think of her more in the "necessary inconvenience" sense like @Thomas S. said.

@Robert Biggerstaff, @Pat L. I think I tend to think of them as assets in that good ones produce value through being good custodians. Likely being a remote landlord affects my approach: I am more reliant on having good tenants who are "the eyes and ears" in my property. @Jason D. I also have been thinking of them in terms of customers, but the custodial aspect adds a different dimension to my thinking.

Do you view your tenants as an asset or a liability? 

I'm curious whether folks here view their tenants as an asset or a liability? I'm sure many will say "both" but if you had to choose, which would you pick?

Some starting thoughts:

Asset perspective:

- They are your customer for whom you provide a service and receive revenue.

- A good tenant treats your property as their own, takes care of it.

- You want a good tenant to stay.

Liability:

- They can be demanding and constantly be asking you to improve the place.

- They will squawk at every small rent increase even if you're just trying to keep up with costs.

- Tenants with below market rents are difficult to get rid of or raise the rent on especially in rent controlled areas.

Thanks @Joe Splitrock @John Barrett.

@John Barrett your tenant was correct in labeling it a terrier, “Pit Bull”’ is not an AKC breed, it’s a non specific designation which usually includes various terrier breeds. From Wikipedia:

“Pit bull is the common name for a type of dog descended from bulldogs and terriers. Formal breeds often considered to be of the pit bull type include the American Pit Bull Terrier, American Staffordshire Terrier, American Bully, and Staffordshire Bull Terrier.[1][2] The American Bulldog is also sometimes included.[3] Mixed-breed dogs which physically resemble these breeds often get labelled as "pit bulls" by shelters. Additionally, the pit bull type is particularly ambiguous as a "breed" encompassing a range of pedigree breeds, informal types and appearances that cannot be reliably identified.[4] “

Question to all, I don’t have properties in the US so curious: Why is it the landlord’s responsibility to be in the business of enforcement of local breed restriction laws? (Assuming you yourself don’t have a pet policy)

@Megan Kline I don’t know if anyone has said the following, there’s a lot of great content here:

My goal is to ensure that I am never in a position where I am forced to sell a property because I can’t make the payments. I could lose my job but the rents continue to cover the mortgage and expenses. Thus I look for a cap rate that is at least the mortgage interest rate. My Net Operating Income budgets for op ex, cap ex, vacancy. Not that I’m worried about losing my job, but it does allow me the freedom to quit, and financial freedom is why I’m in it. Thus I first manage for risk and a sustainability. After that you can optimize for cash flow or appreciation.

Apologies for typos and mangled sentences, it got posted before I intended and I can’t figure out how to edit or delete. Hope it made enough sense!

Hello PB folks,

I am wondering how folks model purchasing/holding of land. I don't actually want to buy land on its own, I want to buy houses with lots of land but i can't find any that will the rental income doesn't cash flow positive. Since so far I have six townhouses and one apartment based on capex this model won't work for such land focused properties .a capex floor sufficient to cover the mortgage. I'd prefer to own fully detached SFH especially those with a good amount of land since land appreciates but buildings depreciate. However the prices in my preferred locale do not equate to a sufficient rent to cover the cost of money. I figured if I could understand how people model the purchase of land without income I could then model houses with good land value but insufficient rental income.

I am able to financially sustain the purchase of land where there is not cash generated, so this is a pure appreciation play.

Thank for your time,

Kevin

@Paul Sicotte Personally I prefer financial partnerships, where the other has some accountability and there’s shared success. For example, I’m fine paying real estate agent fees for completed transactions. This doesn’t sound like a partnership. The company is selling you something for which you by definition have no ability to judge its value (hence the question here) and I assume no recourse if you are dissatisfied with the product. Sounds like a suckers game to me.