All Forum Posts by: Jennifer T.

Thanks for posting this.  I'm a fairly newbie investor, currently looking for a second rental and have also been struggling with the right "mix" of these more variable costs to account for.

One thing that has never really made sense to me is CAPEX/Maintenance being based on the monthly rent. Because a new roof or a new hot water heater is going to cost roughly the same for a 1,000 sq ft. house, whether it rents for $400/month or $2000/month. As such, I am finding I shy a little more away from lower rent houses because, although they are also cheaper to buy, just one major repair over a few years can blow away a lot of my cash flow.

I am striving to be a buy/hold, set it and forget it type of RE investor. When I buy a property, I fix it up and fix it up properly, so that it will hopefully be a long time before it needs any CAPEX/Maintenance. And, just for my own thinking, basically consider those repair costs as part of the purchase price for buying the home.

I do analyze a total 10% of rent going to CAPEX/Maint., with a minimum of $800/year per property. So this can end up being higher percentage for lower rent properties. I also don't expect to spend much on CAPEX/Maint. for the first few years because the house is fixed up on purchase, but still include that expense for analysis.

I also look to buy properties that will rent easily, so I use 8% vacancy.  However, if I was worried about a property not renting as easily, I'd up that percentage. 

Depending on where the property is located, I calculate either $0 for PM or 10%.  If it is within an hour of where I live, I'll manage myself.  Further out than that, I'd still manage myself, but it is within the realm of possibility I'd go PM at some point in the future so I want to account for that.

I also look for at least $400/door/month cash flow after all expenses so, either way, I'm not "riding on the edge" if I end up with higher expenses than what I planned due to either my inexperience and/or bad luck.

Now I'm waiting for the Judge Judy episode where Tenants A sue Tenants B because some of the stuff Tenants B let them keep over there was missing.

Congrats!  I've been doing the exact same thing for the last three years and am now actively looking for my second rental property.  It's been fantastic!

The "smart money" thing for me to do would be to rinse and repeat...ie buy another multi owner occupied, move in, and then rent out both sides of my current duplex.  But, from a lifestyle point of view, I love my house and have zero desire to do that.  However, that might be a good option for you all.

If you go the traditional bank lending route, it seems to be pretty standard they require a 25% down payment for an investment property that will NOT be owner occupied. 

A bit off topic, but one of my pet peeves is neighbors who actually think they own the street parking next to their homes.

I went to the showing for a house I was considering purchasing.  A neighbor came over and start screaming...yes, actually screaming...at the seller's agent because she had parked on the street next to his house.  Although it didn't deter me from purchasing the house...though I didn't for other reasons...a lunatic neighbor was definitely something else negative to ponder!

In my own neighborhood, I am two blocks from a huge, annual two weekend event called Jazz Fest.  Tens of thousands of people attend this event and there are literally ZERO parking spots available at the event itself.  The same few neighbors (some on my block, some the next block over) every year block off and "sell" the street parking that is available.  It's pretty ridiculous, IMO.  However, although it is very illegal, it is not enforced.  And there are a ton of police strolling around, so it is not like it is a big secret.

At least for the neighbors, like myself, who don't have off street parking they do "allow" me to park in one of their spots without charging me, lol.  Which is a good thing because I would hate to turn total b**ch, considering they are my neighbors and we are pleasant with each other.

And you'll see the same thing...selling street parking...in the neighborhoods around the French Quarter during the Mardi Gras season.

@Roy N., haha, I missed the double entendre also.  Apparently it has been too long since I was in college.

Thanks for sharing your two negative experiences with int'l students, though it sounds like overall they've been positive since those were the only two.  I bet you were surprised as heck to receive the letter and back rent from the one student!  But it certainly speaks to their integrity that they eventually made things right...albeit a few months late.

I had forgotten one of the women in my sorority was an exchange student from Luxembourg.  She came from a wealthy family who paid all her expenses, including a fancy apartment one block from the beach.  Must be nice! :).  Fast forward to the present and I'd be thrilled to have a tenant like that.

@Roy N.  Wow!  I love the "Take me Home" card concept.  Way to think out of the box and make sure everyone stays safe.  I bet that impresses the parent cosigners, as well.

I've heard international students are usually great tenants because they tend to be more responsible and an eviction can cause them to lose their student visa, so they and/or their parents make sure rents are paid on time.

I have only had four sets of tenants.  Two of them were moving in from out of state.  Those folks were required to send in a holding deposit for the first month's rent as well as a signed copy of the lease.  Upon move-in, they needed to also provide the first month's rent and their holding deposit turned into their security deposit.

For the other two sets, they needed to provide a security deposit and first month's rent before moving in.  They signed the leases with me, in person.  I went through the lease with them, basically paraphrasing each section, but also encouraging them to read through the entire lease before signing.  They seemed to appreciate the paraphrasing.   

I used to live in a multi (didn't own it) and one of the units...fortunately it was mine!...had the coveted gated driveway of the house.  The rest of the units had a gated parking lot at the back of the property that they used.  Those spots were not assigned.  It seemed to have enough spots for all the residents...though just barely.

In my rental, I have both gas heating (wall units) and window units that are both A/C and heat.  A few months ago, the heat went out on the window unit (A/C still works).  I offered to buy a new one, but my tenants said it was fine, they prefer the gas heating anyway.

But, in my area, gas and electric come on the same bill anyway. 

I don't see any harm in asking your tenants to pay early, IF you give them some kind of incentive.  Like $50 off the rent, just for that month.  And just as an option, not a requirement.  Depending on people's pay schedules, some might be able to swing it.

Of course the down side is, some people might take this as a precedent and push for this discount all the time.

However, if an incentive is not something you are willing to do, it would not be appropriate to request an early rent payment.  During my renting days, if my landlady had done that, I would have been annoyed by the request and ignored it.