All Forum Posts by: Mike B.

@Kyle J.

A local investor is mentoring me through the process. I sent the application to him for the background check and he shot it down in about 5 seconds. :-)

Glad he has my back and glad I can ask questions here.

@Steve Rozenberg - I’m sticking to fixing toilets and doing accounting from now on. :-) We will just have the realtor handle listings and tenant screens.

@Brian Tome That is really my question. When I have two adult applicants do I automatically treat them as a family unit with a combined household income? Or do they each have to qualify individually?

I really like them and my gut tells me they will be good tenants, so I want to rent to them, but when I got the applications and looked at them on paper my brain tells me no.

Firstly, her credit score falls below my posted minimum score. Also she is currently living with family and her previous landlord left he country. So I can’t speak with her old landlord.

The second applicant listed a bankruptcy and credit problems.

I think my best course of action is to pass along the application to my Realtor so he can review everything and make a professional decision. Moving forward I may want to use a realtor for the entire process.

@Steve Rozenberg My realtor will do the application review and final screening. There just seems to be inconsistent information on the application.

I found my first tenant and everything seemed fine. I went over the requirements with her. Gross income three times rent, Credit score greater than 600, etc... All is good she says.

During the showing she mentioned her domestic partner owns a house in another state and so she (gay couple) doesn’t have rental history. She is “wrapping things up over there” and wont be here to see the rental. Not a big deal to me. What seems odd is the applicant has a couple children too. But hay it is 2021 and I live in a progressive city. So I suppose it’s possible she is a lesbian with children from a previous heterosexual relationship.

Now she turns in the application and I see her income is just below $40,000/yr, so she doesn’t meet the income requirements for the house by herself. She needs to gross $67,000/yr to be at 3 times rent. Also, she states some credit issues with at least one of her scores falling below 600. She lists her relationship status as “domestic partnerships” and the other applicant as her partner. So I’m supposed to consider them a couple with combined income? They aren’t married.

Now I look at the out of state applicants information. She also makes about $40,000/yr, but I notice she has lived in the other state for over ten years. That’s one heck of a long distance relationship. Also zero rental history and she mentions bad credit too. Under her relationship status she says “Single” but what throws me off is she lists the primary applicant as her Partner and the kids as her children.

I’m kinda torn here, because if they are indeed a lesbian couple they meet the combine household income requirements. But they live in different states and both of them have stated credit issues.

My wife says...no. They aren’t a couple. If they were married they would be a couple, but since they aren’t married we shouldn’t consider them a household and they both need to qualify individually. The wife also says they don’t make enough money and really we are almost doing them a favor by rejecting them. And she says I’m not allowed to screen tenants moving forward. :-/ Ugh...

@JD Martin

She turned in her application and there are so many red flags. Now I see why people use realtors to find tenants.

My rent is $1850/month - Which is slightly below market value in my area of Austin. The applicant earns $40,000/year and has lived here for her whole life. She doesn’t meet the income requirements for the house alone. Her “domestic partner” earns $40,000/year. The issue is her domestic partner is relocating from a different state where she has also lived most of her life. On the application she lists her relationship status as single, but put the other woman down as her “partner” and the kids down as her children. I don’t buy it and I think she just found a roommate online.

The primarily applicant has been living with family for the last three years and her previous rental reference lives outside the country with availability only via email. The domestic partner also doesn’t have any rental history because she is a homeowner in the state where she resides.

They both state on the application they have bad credit with at least one of her scores below my requirement of 600.

There are rentals available in nearby neighborhoods that are starting around $1600, so I almost feel like rejecting them helping her financially and i would be doing them both a favor.

I have a tenant for my first rental property. We are still screening her, but it should be fine and I expect to have the lease signed soon.  

During the showing, my future tenant asked to have a security system installed before they move in. She wants a system with a video doorbell. I didn't realize the cost when I offered to pay for the equipment and installation. The tenant will just pay the monitoring fee. 

This is my only rental property. Should I just sign a 3-year contract for a security system and then add the cost into our rent? Or just buy equipment outright and then let the tenant pay for monitoring herself? What do most landlords do in this situation?  
 

We moved to Austin Texas in 2017. In August 2017 we built a house in Phase 1 of a new master-planned community on the outskirts of Leander for $230,000. Three years later the same floorplan would cost us about $325,000. 

July 2020 we went under contract to build a 2809 Square Foot house in the same area. In July the starting price for this floorplan was $308,000. Today the starting price is $355,000. We are about 25 minutes from Apple's new campus and about 1 hour from downtown. 

Many of our neighbors are working-class people from southern California that could never afford to buy there. When they transfer to Austin it's an immediate pay increase. I'll never forget the husband and wife, who worked together at a California Costco. They both transferred from their California Costco to an Austin Costco. In 2017 they built a 2200 SF house in our neighborhood for just a little over $200,000. Beautiful four bedroom with nice hardwood floors. That house is probably worth about $325,000 right now. 

Sorry if I'm rambling, but it's hard not to be excited. I hope everybody from San Francisco comes to Austin. Keep Them Coming! :-)  

I'm loving bigger pockets. We are getting ready to rent our primary residence and these kinds of conversations are so useful to me. This will be our 2nd dive into rentals, so I'm still learning. 

The gentlemen mentoring me did mention it's hard to cash flow a property nowadays. What are the expectations within the local community about the future? I mean... are rents expected to increase in relation to property values? As somebody coming from Houston it's hard to fathom the high prices in Austin. 

Hello,

I'm a first-time landlord, so take everything I say with a grain of salt. 

There is a big difference between newer southern cities and the older coastal areas like San Fransico. For example, Houston, Dallas, and San Antonio are all large sprawling metro areas that continue to expand into vast areas of underdeveloped Texas land. This has helped to keep housing affordable for the people willing to drive. In my humble opinion, Austin is a bit of an exception just because traffic is so awful. Every major highway is either suffering from gridlock or is a tolled road. Those toll roads really act just like a mountain or river, dividing the city and limiting transit. Middle-class people are really going to adjust their behavior due to those tolls. Because of this, Austin has artificially created a denser population than the other big cities in Texas.  

I expect businesses will eventually start migrating more of their offices into the suburbs, and that will offer more jobs and balance the city's ever-increasing housing prices. Once there are more and more jobs in these suburbs, the people will follow. I think it's smart to look 20 years into the future and think about what the city will look like. As the metro area is expected to grow by close to 2 million people, those far-flung outer cities will become new suburbs offering affordable living.

I happen to live on Hwy 183 in Leander. The housing out here is still somewhat affordable, and with the toll road set to expand, I imagine this area will attract a lot more buyers looking for affordable housing. There is also Buda, Kyle, Hutto, etc... 

Just a quick note - I live minutes from the last stop on the Austin Metro Rail and minutes from Hwy 183. It's a 1-hour commute to downtown Austin. My neighbor has goats in his backyard. So there is still lots of land around Austin for new housing.