All Forum Posts by: Penny Clark

Yes, if you have already accepted applications for the property for review, you shouldn't change the rental price. One way to get the additional $100 would be to have the tenant take on cost of water, sewage or garbage utilities. If these costs are already the tenant's responsibility, then consider doing a six month lease (if your state laws permit that) and increase rent after that with a renewal. 

For a tiebreaker in choosing a tenant, I would review each applicants' debt to income ratio and go with the lowest one. However, if all three applicants are equally qualified by similar credit scores, income amount and landlord references then you should go with the first come first qualified. 

Good luck!

I am not a lending expert but I have taken out my fair share of home loans to purchase properties and refinance. I also am a retired property manager and know that those types of inquiries are soft pulls and do not impact a person's credit score anymore than if the person or an already existing creditor of that person were to run a credit check on the applicant. In terms of impacting your credit score, I'd be more concerned about late pays, charging all credit lines to the limit (overutilization of debt), and obvious stuff like judgements and active collections. Loan underwriters and astute property managers /self managing landlords also review debt to income ratios no matter how high the score. Just remember if you have a high score and get reported for a late car payment, the impact is more severe than if you had a lower score to start.

Hope that helps!

Sounds like you need to work on developing your rental criteria; for example, requiring all approved applicants to meet a minimum credit score, income amount and provide rental references for both previous and current landlords. Post criteria in your marketing ad to all potential applicants. Doing so will let everyone who applies know you are a professional and the deadbeat and hard luck applicants will weed themselves out. If you must  veer from these requirements for an applicant, such as if one of the criteria items is weak ( no or little credit history) make sure the applicant is very strong in the other two areas such as income and rental history. If the applicant is weak on income, you'll want to pass.

Good luck!

If possible stick with one trim/accent color and one wall color for both units and consider using sheen of eggshell, satin or even semigloss for easier cleaning. Label the buckets for quick  touch ups  when you turn the unit. Going gray is a refreshing alternative to off white, white or tan. Incorporating one accent wall in a complimentary neutral color will make a room pop.  Swiss coffee may be old school for trim  but it's a timeless classic and compliments just about all colors.

Good luck and congrats on your first rental!

Given the recent changes in current rental climate with rent increase restrictions and just cause eviction , I would consider investing in a duplex if you can find a decent one at your price point and live in one side or invest in a SFH with the intention of renting it to business travelers as a short term rental.

Good luck!

@stephaniechiramberro, I think the  this action by the California legislature will result in the following:

- Landlords who had previously been reluctant to raise rents on good tenants will now do so every year without fail.  Installing a new tenant at a higher market rent may be preferable to landlords who once feared the possibility of unit becoming vacant due to rent increase. 

-  Application process will likely become more stringent for screening tenants which may include, requiring higher credit scores and/or lower debt to income ratios, in depth rental reference checks, and income verifications. 

- Leases will be longer with more restrictions and requirements such as mandatory renter's insurance and tenants paying all utilities. Landlords may remove option of automatic renewal to  month to month once lease term expires. There is no strong incentive to keep the tenancy going past a year. 

- Landlords may lower or increase security deposit from the standard equal to 1 month's  rent. 

- Cosmetic improvements may be restricted to exterior of home. Landlords may only approve necessary repairs to satisfy City and County codes. 

- More landlords will move into the short-term rental market

I'm sure other landlords out there can add their own predictions. I am glad that most of our rentals are already getting market rent.

We bought a half plex in South Sacramento for around 40K; renovated and rented it for a couple years for $1100, then sold it for $180K.

@Scott Doyen, In a market as expensive as this one, you'll want to make your money at the purchase of sale by finding a fixer, foreclosure, or REO. Deals are still out there - just more difficult to find. House-hacking may be the way to go if you're looking to get into a multi-unit. Remember, not all investors in high price areas, however, purchase for the reason of cash flow only. Some investors do it for the purpose of building long-term equity through appreciation.

Good luck!

@Tracy Minick, We recently sold a rental property with tenants in place and I have represented owners selling their rentals with tenants as part of the package. For it to work and be attractive to an investor, I'd recommend these tips:

- Keep rents close to market rate

If you're in a seller's market, try to restrict showings to serious investors - those who have financing lined up and are willing to make an offer subject to inspection

- Provide tenant some flexibility for show times  - for example a time window for weekday and a weekend. . Offering a small cash incentive to keep place tidy for those appointments is helpful.

- Provide investor with outline terms of lease and a rent roll. Do not provide tenant personal information until close of escrow. 

- Provide utility cost information

- Provide receipts of completed work for upgrades or improvements

Even if you decide to sell with tenants in place, issue your tenants proper notice. This serves two purposes: It provides your investor buyers an option to keep existing tenancies active or start fresh if they decide to act on the notice . It also provides a reminder to your existing tenants to present your property and their tenancy at its best if they wish to stay.

@Vinh Huynh, How would you describe your property and area it is in? If it is a B or A class property, think outside the box on creating cash flow.

For example, instead of renting your property to a long-term tenant, consider renting it out to short-term business travelers via AirB&B (travel nurses or a layover alternative to a hotel for a small trucking company) Or you could rent it by the room to three or four long-term tenants providing them with their own bedroom but shared furnished common areas. There's an upstart company called Copious, which is doing just that and managing it for the landlord.  Another option is being a landlord and contracting with the US government seeking housing for military transfers which are given housing allowances that also include paying for all the rental's utilities. You can provide housing for victims of disaster.  Insurance companies will often pay 30 to 40 percent more than typical rental rates for their clients who are in need of a short-term stay because they lost their homes to a fire, for example.

 Oh and since you're a California landlord, I wouldn't bank on raising rents to create cash flow because there is a string of legislative bills now up for review that seek to cap rents and put restrictions on how and when landlords can do rent increases. 

I hope this was helpful to you. Best of luck!