All Forum Posts by: Patricia Steiner

Your experience is not my norm - and my clients and I self-manage our own properties.  A couple of recommendations:

1.  Do a pre-move-in walk of the property with the tenant and take photos of every room - and make note of condition.  Have the tenant initial/sign a checklist showing the condition at move-in and explain both verbally and within your lease that the property is to be returned to you in that condition (less ordinary wear and tear).  Give the tenant a copy of the checklist signed by both of you and provide the photos.  Gets pretty tangible then.

2. Note in your lease and then verbally with your tenant as to what they are responsible for repairing and what you will be.  If they break the garbage disposal by over-filling it or the like, they are responsible for its repair/replacement.

3.  Require Renter's Insurance with Landlord As Additionally Insured.  It's a cheap date and it should be used along with the tenants' personal funds to make any needed repairs.  

4. When requests are made, have the tenant (and this is part of the lease as well noting exception of emergencies like a broken pipe) email you with the photo of the item and an explanation as to what happened to cause it to break/stop working.  You would be surprised what comes your way:  "my kid flushed something down the toilet" (that's on them)/"I have no idea how the door came off the hinges" (that's on them) / "The sink is clogged" (they used it, they clogged it - you know the drill by now).  Things like a window/roof leaks, termites, AC/Heat not working - that's landlord stuff. 

5.  Don't rent any property until everything is in good working order and make all repairs thoroughly (versus a make it do for now approach).  

6. And, do an exit walk-through at termination end - using the move-in checklist and photos.

Tenants need to know before moving in that you maintain your properties, value them, and that you expect the same from them.  Be sure to do property checks (quarterly or so) which you can explain as your check of the property to determine any upcoming upgrades.  

Hope this helps...what you do before they move-in sets the tone for what happens while they're there.  

Just my opinion - but it's too early.  My recommendation is don't move forward in your head until you pass all the contingency phases like inspection, appraisal, financing...at this stage, the mindset is to vet the properties and make sure what you thought was a great deal at contract time remains one now.  

Congrats on two finds...fingers crossed that they're both winners.

Are you giving them the full purchase price?  Then yes - they can take the cash and buy the property.  But if you're giving them the down payment funds, it will have to either be acceptable to a lender as "gifted funds" or it will have to be seasoned and most likely explained.  

Down Payment:  20% or more for an investment property.  

Why not set-up an LLC and purchase the property in that entity - and then allow your in-laws to manage the house hack for you. LLCs are inexpensive to set-up (you can even do it online) and offer asset protection as well. You will need a lender who will be agreeable to lending to an LLC but they're not in short supply.

Hope this helps...

I recommend a couple of options to get you the highest return and the quickest occupancy:

1.  Check the market to determine what will give you the best return.  It's not unusual to find - contrary to standard investor logic - that renting a multi-structure property to one party commands higher rent than offering it as smaller square footage options with no private yard space.  This even applies to vacation rentals; we discovered that marketing a duplex with a shared common area to one party - versus two guests - commanded more rent and the demand was even stronger.

2.  List it both ways.  As one property, it would be great for an extended family situation (mother-in-law suite thing) and more. Separately is a little tricky because you'll want people who don't want/need that private yard...and that applies to a lot of people.

Good problem to have...please let us know how it plays out!

Great counsel from everyone...and who knows, you might be able to rent it for even more.  Check the market rent for that area and move on to even greater profitability. Congrats on having such great tenants!  

Paying rent isn't building or preserving your wealth. It's a downright use of cash.  You're subsidizing your boyfriend.  Bottom line financially:  he wins, you lose.

If you purchased a property as owner occupied - which has a lower interest rate and may even help you with closing costs as a first time homeowner - then no, you would be contractually prohibited from renting it out and using it as an investment property.  People do this but it comes with risk if you're caught - including with the property appraiser's office in your city if you claim as a non-rental property.

My recommendation would be to take care of yourself first and start putting your money to work for you in building and preserving your wealth.  When you start to value yourself more, others will too.  Put yourself first - and quit subsidizing other people's wealth.

Never...it isn't possible in all markets.  High-priced markets with low inventory and high demand just aren't the place for it.  Stay away from those and know it won't be an easy hunt anywhere but worth it as long as you stay within valuation when completed. Best.

I recommend that your friend actually go to the Building Division and meet with an official there; he should explain that what his understanding of the code was when he started the work and in no means meant to circumvent any regulation or building code.  Have him go in under the guise that he is wanting to understand what was required and how this can be amicably resolved at this time by a property owner.  When he seeks to understand first, the chances of having an official walk it all back is a lot greater than letting an inspector prove that he can own you for life.  Just saying...they got big titles and little paychecks so the payback is hell.  The goal here is to - again - share what he thought the code was when he started (did I misread this?) and how to get this back on track (what can I do to make you feel better about what I'm trying to achieve?).

Hope this helps...

Depends on the property condition and the market.  Take stock of what capital expenditures are going to come your way in the next 1-5 years and get a real number.  A new roof may be more than some random percentage so get planned out and schedule it.  Vacancies...in my market, it is the seller who causes a property to go vacant because the demand far exceeds the supply.  Do a quick search of what is for rent in your zip code and determine the demand to supply. From there, you can get a more true estimate and avoid the financial pain of just plugging in a number.

And, kudos to you for asking these tough questions and planning for tough events.  That's the stuff of real investors...

Don't borrow problems that don't exist.  

It may not happen.  This "economic funk" is expected to last only a couple of years versus the normal 7 to 10 years that the historical downturns have taken to reverse. 

I recommend operating at all times like "a boyscout."  Be prepared.  Worry doesn't solve anything and it sure doesn't help. So look at how you can minimize expenses (it's always the right thing to do anyways) and how you can ensure that if push comes to shove, you have the property that is in solid condition with the curb appeal to boost any appraisal and attract investors like me who buy year-round regardless of the economic cycle of the moment.  And, as a former banker, I can promise you this:  banks don't know squat about real estate. They don't want to own it. They're not good at disposing of it.  Stay current on your payments and if you think you're not going to be able to, call the bank before they call you.

All is well...