All Forum Posts by: Roger Vi

@Scott A. After owning/living in a home for 3+ years and owning/renting a home for 2+ years, I would have to advise AGAINST buying the home you are living in. That is if investing is your main priority right now.

Owning a home is really an expense unless you are occupying a multi-unit. The lenders and agents will tell you how great appreciation and equity buildup is, but the truth is you can get both of those with a rental property. Only difference is someone is paying you money in your rental and you are paying your mortgage company in your personal home. Either way, you are responsible for repairs, capex, etc... Owning a rental will teach you everything owning a home will teach you plus more. That's my opinion at least.

It will be a headache when a tenant calls for maintenance requests. It will be more of a headache when you have your own maintenance request and it comes out of your own pocket.

I could go on and on but the point is I've owned both and am looking to sell my primary home for a rental at the moment. 

Hope this helps! Congratulations on the baby and good luck with the exciting times that come ahead for you!

The way I interpret the laws in my state, animals do not have housing rights, only humans. You can discriminate against animals, just not humans.

A service animal is a different story and I would seek advice from a lawyer in that case.

Hope this helps!

Welcome to the PNW @Pete Perez ! 

I live and have all my rentals in Everett, WA (Snohomish County). We are about a 30 min commute to UW Seattle. I attended UW back in 08 and used to take a 45-60 min bus ride to school every morning (no fun, would not recommend, but it works).

I follow both King and Snohomish County Multi-Family RE, but focus on Snohomish County with a main focus on Everett. I grew up here and the numbers make more sense for buy/hold rentals in my price range here. In general, prices/rents are lower here. King County/ City of Seattle is getting over populated while growing at a record pace. This is pushing a lot of the population to live in Snohomish County and Commute daily. I personally know a lot of people that commute as far as Monroe and Arlington to King County. It is a 40+ minute commute one way but people seem to enjoy the extra space.

I could talk about and compare Snohomish / King County all day. For rentals, I would say it depends on the style/age of building and type of tenant you are looking for. From there, I can give you specific neighborhoods/areas and general price ranges. Feel free to connect for more info, I would be glad to share my knowledge and get some input from an out-of-towner. 

Good luck and hope you enjoy your stay in the PNW!

@Robert P. Excellent news that your rental is so desired! While it is good to have lots of applicants, you really only need ONE good one. Seeing so much interest should make it easy for you to be patient. Signing a tenant is a big commitment and just keep in mind whoever you choose is going to be there for at least 12 months or however long you decide to lease for.

Your goal now is to narrow down your 30+ applicants to the one perfect tenant. I will second the comment about your rent being too low. The easiest way to shrink 30 tenants down to 5-10 good ones is to up the price. Re check your comparable rentals in the neighborhood. If you are one of the nicer ones, charge the most! 

I personally like doing open house style showings. Some object it, but here's my take. If you establish an open house time/day, then everyone that calls you can just tell them to go to the open house for a viewing. This eliminates all viewing scheduling, which is probably the most frustrating part for me in the past since each viewing takes 30+ minutes out of my life and not everyone will be interested or qualify. I will invite people I know are not qualified just to make it clear the unit is in hot demand during the open house. Keep the open house short unless your time is not too valuable to you, 1-3PM is plenty of time on a weekend. 

Another way to speed this up is to pre-type an email template with an application attached. Everyone that emails, just send them this template and have them email back an application. There are some great email programs you use to send these out automatically as soon as someone inquires about your rental. Probably not necessary at this point, but in the future I hope you have 100+ units and this will be a helpful tool!

ONE LAST TIP! I'm going to PM this one to you and see what you think.

Keep up the great work and good luck the rest of the way!

@Robert P.

I think it is time to get an attorney familiar with WA state evictions. After consulting with attorney, you will know whether or not it is worth it to pursue the lost money. I would not rent to someone in that situation again. Especially if you are in Bellevue, most likely there is a long wait list for your property if you clean it up and advertise it. Good luck!

I purchased a 4plex that was drastically under market rent in 2014. I am in Everett, WA, which is 25 min from Seattle/King County, which a lot consider to be the next San Francisco in terms of real estate and rent prices.

We are in a very similar situation where rents are increasing faster than they ever have. If you haven't done rent increases every year, you are at least 5% under market. If you've waited longer than a year (such as your property), you are way under market.

My 4plex collected ~$2600 when I purchased and my goal was to raise to to ~$4000 within 3 years with minimal vacancies. The units were in rough shape so I pushed the rent increases to see if the tenants would move out since I wanted to update anyway. I raised them 3 months after purchase, 6 months after that, and one more time 6 months after. I've experienced three move outs in 16 months but currently collect $1100 more each month between 4 units since purchase. Because the rents are still rising, I have added another $450 to my initial goal and hope to achieve these rent raises in the next 2-3 years.

The good thing about rising rents is that it means your property is wanted. If you have money to do repairs, I would not be afraid of someone moving out. My last 3 move outs combined I had about 17 days total vacancy. If you plan right, it should not take you longer than 7 days to move a tenant in AFTER cleaning up.

Communication is KEY during this process. I always try to be as friendly as possible with the tenants I inherited. People's emotions are often times directly linked to their money situation. No one in the world likes to hear their landlord tell them rent is going up. You might see it on the news everyday and hear it from your friends, but the problem is not real until your actual landlord tells you its happening. Local government is a great scapegoat, I usually blame the increases on rising property taxes.

To help answer all your questions, I would post a test ad on Craigslist for one of the properties you want to raise rents for. Run the ad for 2-7 days and see what kind of response you get. If you get 20 calls/emails a day, your price is too low. If you get 5-10, your price is probably appropriate and I would consider this "market rent."

The day you run this ad matters. You will get more responses on Thursday-Saturday than on Monday-Wednesday. In a market like the Bay, this really shouldn't matter too much. Just more of something to keep in mind if you see huge differences in numbers day to day.

ONE LAST POINTER! I would make sure to increase the security deposits for current and future tenants if you haven't done so already. Security is usually 1-2 months rent. If you are under rented by that much, the security deposits may not be appropriate. This was one of the first things I noticed when I took over. The rent was $800-1000/month and everyone's security deposit was $300-500 because they've been there for years.

Hope this helps! Feel free to message me if you need any help. I've got some more random pointers for achieving max rent and low turnover.

Good luck!

@Account Closed That's good to know, I've never heard of it. Main reason I don't do 13+ month leases in WA state is because they require a notary. With a yearly rent increase pre-scheduled that notary may be worth it.

I prefer yearly. 6 months is too short because turnover is one of the biggest inevitable expenses you will have and you want to do that as little as possible. Anything longer than 12 months and you lose your chance to increase rent every year. I've seen many people prefer longer leases and make it work. If you can sign someone for 5 years you should if your priority is not having to deal with turnover. I personally like the option to increase rent every year but every year I lean more towards signing a longer lease. Another thing I will throw in is I've done weird lease lengths like 10 months and 8 months. The point for this is you don't want to end your leases at a bad time during the year. If you end December 1st, you could have a hard time finding renters because no one likes to move during the holidays. When I took over my property everyone was month to month and I strategically timed the leases to end February-April. I think this is the best time to do move in and move outs. Staggering the leases is also nice. A completely vacant apartment building is a bad idea for many reasons. Best to have them leave one at a time of they have to leave. Hope this helps.

I am in a similar situation and here is my plan of attack:

Step 1) Identify markets where I like the numbers and where the properties in my budget fit my long term goals. 

Step 2) Identify the key turnkey providers and property management players in the desired location.

Step 3) Phone or Email Interview every TK and PM company I find with a website (sorry, but you cannot work with me in 2016 if I can't google your name and go straight to your website). 

* In this interview I am looking to accomplish 2 things. 

One, learn about the operations of the company and see if they meet my standards and I can see myself working with them. They are the most important member of your team and I would go as far to say that if no one in the city meets your expectations, FIND A DIFFERENT CITY! Rent income and projected ROI does not matter one bit if your PM can't collect.

Secondly, I am looking to learn about the market from the actual pros in the area. Ask them questions that test their local knowledge and improve yours at the same time. Tell them to break down the neighborhoods by street. Are there areas to avoid? What streets do you personally own rentals on?

Hope this helps @Sheldon Alex ! Please PM me if you decide to continue with this route. Maybe we can trade info on different areas and save some time! Good luck on your search!

@Nick L. Just read the part about everything being in the basement... I would still compare the cost of getting the set up done for 6 W/D but if they are sharing the room anyway, I would only supply 1-3 actual W/D instead of 4-6 W/D units.

And absolutely have a way to make this passive and as little headache as possible. Either have someone else operate the W/D room, have a handy maintenance guy ready, or make an enough additional rent income to replace the thing every time it breaks. The reason I would do 2 or 3 set ups is if one breaks you don't have to rush to fix it. This can usually turn a $200 repair bill into a $50 repair bill.

Hope this helps.