All Forum Posts by: Jim Windgassen

Quote from @Kristian Sexton:

How does your lease read in regards to utilities? 

Kristian,

My properties are at present, all long term rentals where the tenant pays their own utilities in their own name.  I have a few more thoughts for you:

1) If you want to continue with the utilities in your name, then institute a cap on the dollar amount included per month, with any overages being billed to the tenant.

2) Most EVSE (EV car chargers) have an app that shows you how much power has been used over a period of time.  If you are going to buy anything, just buy an EVSE from a reputable company like ChargePoint or Tesla and you should be able to see the usage.  In order to deter abuse and have a safer connection to boot, I would gravitate to a hard wired (no plug) 240V EVSE installed by an electrician that does not have an outlet that a sneaky tenant can unplug and then plug in their own EVSE to steal power.  Also, I would do something to secure the dryer plug so that it cannot be easily unplugged to plug in an EVSE and steal power.  Furthermore, I would make charging an EV using ANYTHING other than the provided EVSE an evictable offense.

3) You really don't want tenants messing with power and create a fire / shock hazard.  I have seen tenants do some really dumb things with regular 120VAC plugs.  Doing dumb things with 240VAC high current circuits can make really bad things happen.  That's why I spell out what the rules are in mind numbing detail in my lease for charging electric cars.  I am an electrical engineer, so I am very well aware of what should and should not be done.

4) Electric cars are becoming standard things nowadays, and 5 to 10 years from now, everyone is going to have one; you may as well adapt to it one way or another.  Not allowing EV's at yur place is going to start deterring a lot of people.  Whenever I look for hotels and AirBnBs, I always filter for ones that have onsite EV charging.

I may start installing EVSE's in the future in some of my houses as it is going to become a standard item.  At present, my offer has been to install a 50A NEMA 15-50 outlet that a tenant can plug their own EVSE into which is from my approved list.   That said, a hard wired EVSE is going to be somewhat safer than one which is plugged into an outlet.  There have been some cases where cheap builder grade NEMA 15-50 outlets stop making good contact and get hot and burn, particularly when they are repeatedly plugged into over and over again vs. just being left plugged in.  A hard wired EVSE does not have this weakness.

I have two other reasons for considering installing a hardwired EVSE in my rentals, and I am thinking about revising my EVSE clause:

1) If you are not careful when plugging in a 15-50 plug into an outlet, it is pretty easy to touch the prongs on the plug when it is only halfway inserted and get a shock.  The design of a NEMA 15-50 plug leaves a lot to be desired.

2) As of the 2020 edition of the National Electric Code (NEC) it is required that 240V outlets including those used by EVSEs are connected to a Ground Fualt Circuit Interrupter (GFCI).  EVSEs are required to have internal GFCIs as well.  Having two GFCIs in series with each other is not the best situation and can lead to niusance trips.  Hard wiring an EVSE addresses this problem, and another GFCI in the breaker panel is not required since the EVSE has one.

Hope this helps !

If you are interested, here is my post from last year where I was discussing the EV charging clause that is in my lease.  I am more than happy to work with my tenants on EV charging, but I insist that it is done safely with proper equipment.

https://www.biggerpockets.com/forums/52/topics/1060498-elect...

Quote from @Chris Seveney:

Quote from @Jim Windgassen:

My partner and I bought a condo in Fort Myers in the Bellasol community in 2022 to provide housing for her brother's family after they lost their home in hurricane Ian.  They have since moved out and gotten a new home, and we have this condo now that we have to figure out what to do with.  We purchased it for $235k in 2022, but I would have to list it today for $199k which means we'd take a $36k haircut minimum.

We tried AirBnBing the condo which is fully furnished, and it was working well but we got in a bit of a tiff with the condo association as they have a rule that they have to approve every tenant with 30 days notice and fees for background checks.  This makes AirBnB a difficult proposition.

Monthly holding costs for the condo excluding repairs / capex are approximately:

Mortgage: $1783

Condo Fee: $403

Electric: $100

Water / Sewer: $200

TOTAL: $2486

We would never have bought a condo as a rental property, but as I said, we bought it to provide emergency housing in a pinch.  I think we have the following options; what would you do ?

1) Just list it, get it sold conventionally, take our lumps now and move on with life.

2) Try to rent it as a mid term or long term rental likely at a loss for a 3-5 years hoping that prices will rebound after the present oversupply of homes in FL is soaked up.  We could likely rent it at $1900 per month as a furnished mid term or long term, but our total holding costs are close to $2500 per month, so any potential price gains over 3-5 years will be muted by our losses in holding costs.

3) Pay off the mortgage on the condo by turning our Roth IRAs into SDIRAs. Then do an owner financing deal where we can ask for a premium on the price. There is higher risk here in some ways and there is the opportunity cost of having to sell off our stocks in the IRA. In addition there will be a substantial amount of fees and work to set up the SDIRA, the cost of setting up the owner financing deal etc. The best possible outcome here is that we might be able to ask for something like $220k for the condo so we might reduce our loss to $10k. This seems like a high risk option with limited upside potential for the work and risk taken.

4) Other ideas ?

 Sell it and eat your losses. You are delaying the inevitable - unless you want to hold it for 5+ years and have negative cashflow, which I would not recommend.

Could you sell it subject to? What is your interest rate?

My present interest rate is 7.125% so it is nothing to write home about.  I don’t think that is going to excite anybody.

I think we have pretty much decided to just take our lumps and list it for sale.  If for some reason we cannot get a reasonable offer, we will try the MTR or LTR path.

Thank you all for the feedback !!

My partner and I bought a condo in Fort Myers in the Bellasol community in 2022 to provide housing for her brother's family after they lost their home in hurricane Ian.  They have since moved out and gotten a new home, and we have this condo now that we have to figure out what to do with.  We purchased it for $235k in 2022, but I would have to list it today for $199k which means we'd take a $36k haircut minimum.

We tried AirBnBing the condo which is fully furnished, and it was working well but we got in a bit of a tiff with the condo association as they have a rule that they have to approve every tenant with 30 days notice and fees for background checks.  This makes AirBnB a difficult proposition.

Monthly holding costs for the condo excluding repairs / capex are approximately:

Mortgage: $1783

Condo Fee: $403

Electric: $100

Water / Sewer: $200

TOTAL: $2486

We would never have bought a condo as a rental property, but as I said, we bought it to provide emergency housing in a pinch.  I think we have the following options; what would you do ?

1) Just list it, get it sold conventionally, take our lumps now and move on with life.

2) Try to rent it as a mid term or long term rental likely at a loss for a 3-5 years hoping that prices will rebound after the present oversupply of homes in FL is soaked up.  We could likely rent it at $1900 per month as a furnished mid term or long term, but our total holding costs are close to $2500 per month, so any potential price gains over 3-5 years will be muted by our losses in holding costs.

3) Pay off the mortgage on the condo by turning our Roth IRAs into SDIRAs. Then do an owner financing deal where we can ask for a premium on the price. There is higher risk here in some ways and there is the opportunity cost of having to sell off our stocks in the IRA. In addition there will be a substantial amount of fees and work to set up the SDIRA, the cost of setting up the owner financing deal etc. The best possible outcome here is that we might be able to ask for something like $220k for the condo so we might reduce our loss to $10k. This seems like a high risk option with limited upside potential for the work and risk taken.

4) Other ideas ?

Quote from @Michael McVety:

Hi Jim.  I would be happy to help.  Are you looking to rent your property long-term or short-term?  Having a furnished annual rental can happen but it is harder to market.  We do annual rentals only.  If you are looking for a vacation or short-term rental, let me know and I could refer you someone.

Michael - I should have been more specific that our intent here is to turn this into a mid-term furnished rental.  The condo association limits the number of rentals to no more than 12 per year.  We may want to come down and use it occasionally ourselves.  We have 18 years of experience with long term rentals.

We will soon be having a very nice fully furnished 3/2 condo in the Bellasol community of Fort Myers ready for rent and are looking for recommendations for property management firms in the Fort Myers area.  Recommendations (or places to avoid) are welcomed !

We are long time property investors with properties in other parts of Florida and other states.   We purchased this unit to help a family member who lost their home during hurricane Ian, and they have found a new home and will be vacating the condo in the near future.

Colleen - I see your point and agree with you.  I will take your advice here and edit my lease.

Thank You !

Quote from @Colleen F.:

@Jim Windgassen  Everything about making accommodations for a level two charger you state before "existing 240 V outlets" I would strike. It is basically a promise to maybe install a charger why put that in a lease? define reasonably accessible. No extension cords over x feet may be used might be better.

If I can install a 240V outlet in my property for a limited amount of money, say $200-250 which I can do if the panel is reasonably close, I am willing to do that as it isn’t a huge cost and may help keep a tenant.  Soon enough this is going to just be an expected amenity in a house, and once done, the outlet can provide service for decades.  That said, I do agree that perhaps I need to add some additional caveats stating that the decision is solely the landlord’s.

Bryce - The NEMA 6-20 is an interesting idea for a low cost install, and while not as nice as a 50 amp outlet, it is still much better than a plain old 120V outlet.