All Forum Posts by: Kyle M.

So I have tenants lined up to rent my property and they want to rent it ASAP.  I have done their background checks and all went well.  I forgot to mention during the application signing that I require renters insurance.

1. Do I wait for them to acquire renters insurance before they sign the lease?  Or can I proceed knowing that they will get renters insurance?

2.  If I have to wait for them to get renters insurance, should I keep showing the property?

thank you all for the help, makes it easy

 Thanks Jon, perfect!

 Thank you! What is the equation that I use to find out rent amount for the prorated month?

So I have received applications from two tenants who meet all requirements.  More than 3x income, no evictions, and clean records.  I also called employers to check on their employment status.  The only thing is they have a young son who was sliding around on the floors at the time that they were signing the applications.  I will have "tenants responsible for all floors" in the lease. 

Questions:

1.  Are their any additional things that I can do to limit the risk for myself?  I obviously cannot deny them because of their kid.

2. Also, how do I prorate the rent? I know to prorate on the second month, not on the initial rent collection.  Lets say hypothetically the rent is $1000, and they move in on the 8th of January (which is a month with 31 days).  What is the equation that I will use to calculate the amount that they pay?

Isn't this all about ROE?  My thought is the only way I'll have my rentals fully paid off is when I am retired and do not look to make any future purchases.

@Rob Donovan 

Rent - P&I - Insurance - Taxes - Maint - Vacancy = Cash Flow

1425 - 590 - 65 - 190 - 140 - 115 = +325

Cash on cash is 325x12 = 3900 / 13000 = 30% Cash on Cash

- I didn't calculate the balloon

- What am I missing here? +325 per month and 30% cash on cash looks good to me.

I'm newer here so someone double check me but it looks like a slam dunk deal.

@Tony Dragoo 

Tell us a little more about yourself so we can give you a more informed answer.

In general I don't believe there is any right or wrong answer.  However, I do believe that house hacking is the best way financially to start building a rental portfolio.

Personally, house hacking isn't for me.  I wouldn't like living a few steps from my tenants.  The multi family that I could afford are not in areas I want to live.  I also wouldn't like to keep moving from house to house.  Again, these are all area dependant and personal preferences.

Get a relator and ask them for rental comps for the area you are looking in.  Rentometer in my area is fairly accurate but I would never rely solely on it.