All Forum Posts by: Michael Campbell

If you haven't done so already just look at the comps in the area.  You need to determine how much value is gained by adding the bathroom and how much value is lost by losing the bedroom.  Obviously you also need to account for the cost of building the bathroom as it won't be cheap.

In the PM agreement I was given, it states that if they find a tenant and they move out within the first 9 months, they will find a new tenant free of charge.  Is this common?  Seems like more of an incentive to use them for placing a tenant.  Still, the cost seems high to me.

@Peter Mckernan Thanks for the input!  Sounds like the right approach.

Thanks for the input... I didn't even think of that as a potential issue.  I think I'm going to call the PM company and see if they'd be willing to accept a lower leasing fee.  I certainly don't want to start off on the wrong foot with this PM company.

@Christian Hansen thanks for the feedback.  That makes sense that the PM could become somewhat resentful if it turns out to be a problem tenant.  Any suggestions for things I  could do to prevent this from potentially becoming an issue (other than paying them to place a tenant)?  

Hello BP,

Just wanted to see what people thought of this... I like the idea of using a property manager - I really don't have much interest in dealing with tenants, collecting rent, scheduling maintenance people, etc. so I've decided that it's worth it for me to pay a property manager 8% of the rent to handle these things for me.  However, I do have an issue with the fee of 1-month's rent for placing a tenant.  I talked to the PM company and they said they do not recommended going in this direction, but it is still allowed.  

Just wanted to see if anyone has done this and what is your experience?  Would the property manager look at my situation any differently since I'd like to find my own tenants?

Annie, thanks for the input.  I agree that tenant screening is critical for all tenants, affordable housing or not.  I've already had some issues with tenants, and I've realized I need to be more strict and diligent when screening tenants.  I like the idea of making properties a little bit nicer than the nearby rentals.  I believe that properties in poor condition tend to bring in poor tenants.

Joe, as you said it will depend a lot of factors.  However, for me, I would like to have at least an additional $5k in reserves above all of your anticipated expenses.  This isn't a recommendation, and I have zero experience with Section 8, just the minimum amount that I would feel comfortable with.  

People often bring that up as a benefit of renting to Section 8 and I look at that as one of the positives. 

However, I would still be sure that you have enough cash reserves to handle unexpected issues.  Local housing authorities will usually require inspections for Section 8 housing, so a failed inspection or an untimely inspector could result in some unplanned vacancy.

@Joe Manfredi  If you're concerned that a short vacancy will cause significant issues with your personal finances, I'd recommend holding off on buying any properties until you're confident that you have enough of a financial cushion moving forward.  You don't want to run into a situation where you can't afford to do necessary repairs or pay your mortgage if a tenant moves out.  However, that doesn't mean that $15k isn't enough to get started and many people have started with that or less.