All Forum Posts by: Jennifer T.

I think the toughest thing you will run into with a bank is proof of income, even with a 20% down payment.  Many banks won't consider rental income as income until the property has been rented out for 1-2 years.  Though perhaps some would.  Also keep in mind they will be comparing your debt to income ratio, which will include whatever monthly minimum payments you have now plus the monthly note for the food truck loan.  I'd think the banks would also be unlikely to consider your potential income of a brand new business you are just starting.

Do you have other streams of income that are more long standing and will be continued when you move?  If so, they might be able to base your loan on that income.

But, even if you can't get a home loan now, you can always rent for one year and try again, once your rental and business income is more established and has a history.

Sounds like an exciting plan, however you slice it, and I wish you luck and success!

I absolutely would.  If anything, I might make it 4X, lol.  Just because it can become a much stickier situation if someone living in your own home with you is too low on cash.  They might start eating your food, using your toiletries, etc.  To me, it is even more important that a roomer can comfortably pay the rent.

That's actually standard advice you'll see on the other side of the coin also.  Financial advice given to people is to not spend more than 30% of their income on housing, sometimes with a caveat that up to 40% is okay for a HCOL (high cost of living) area.  It's just a good rule of thumb all around.

Good for tenants because they (hopefully) won't feel stretched too thin.  And if tenants aren't stretched too thin, they are more likely to pay their rent and pay it on time.

I've never owned a condo, so keep that in mind.  But it sounds like a decent monthly cash flow.

1% maintenance seems extremely low, though. While I'm assuming you won't face some of the capital expenditures (CAPEX) that a SFH would, maintenance expenses are typically the wear/tear/replacement/repairs of items/services inside the home. Like the fridge goes out and you have to buy a new one. There is a bad clog in the bathtub and you have to hire a plumber. That kind of thing. I typically assume 10% of rent for just maintenance. This percentage will vary per investor, but somewhere around 5-10% seems to be the general rule of thumb.

I would require your tenants to pay for their own utilities.  Though, depending on your area, it might be common that LLs pay the trash/water.  If so, factor that expense in also.  But I personally would never include energy/gas in a tenant's rent.

I'm guessing you do still need to have some type of insurance for the unit, especially since you are financing.  The insurance you buy will basically cover damage to the interior of the unit as well as liability, though it should certainly be cheaper than normal because it won't need to include damage to things like the building's roof/siding/etc.

Also, if you haven't already, make sure the condo board allows owners to rent out their unit.  Some of them don't, at least where I live.  Or they put a limit on how many units can be non-owner occupied rentals.

FYI, I wish I'd know then about the going to court and putting the rent in escrow trick.  I bet they would have been super quick to bring their extinguishers up to code and permanently fix my A/C.

I realize this is very situation specific, but I was renting when Hurricane Katrina hit NOLA.  Before I returned from evacuating, my LL had already dragged out the (now) nasty fridge and replaced it with a new one.

My worst experience was an apartment complex I lived in.  Although they were good about sending their maintenance staff right away when there was a problem, they only did quick "band aid" fixes instead of fixing the actual problem.

For example, my second summer there, 1x/week my A/C would suddenly stop blowing cold air.  Because it ran out of Freon.  So, every week, I'd spend one night incredibly uncomfortable in my 90-100 degree apartment.  They'd send a guy to fill the Freon the next day.  And then it would run out again about one week later.  I pointed this out to them and begged them to just fix the root problem.  They refused.

Same thing in my last winter.  The heating kept going out every few days.  They had a maintenance person there 5-6 times.  It would get fixed, but then go out again a few days later.  They refused to call a real heating/a/c company, until I threatened to report them for providing inhabitable housing due to lack of heat.  Only then did it actually get permanently fixed.

Last, but not least, I reported numerous times that the fire extinguishers in my common hallway...which are all required to be checked by the fire department every year...were all three years past their last check date and all showed the arrow in the "recharge" position.  But apparently they don't care if their building burns down and kills their tenants, because they did nothing about this very easy to remedy issue in the two years I lived there.

If they would have just fixed my A/C that was apparently leaking Freon like a sieve and the dangerous fire extinguishers, I would have stayed living there another 2-3 years...because I loved the location and everything else about my apartment and the complex.  Instead, I moved right before summer started so I wouldn't have to spend one more miserably hot night in that place. 

 I agree with @Mark Ainley for the rental portion, but I would return the security deposit portion right away.  Because they didn't move in, so they didn't cause any damages.  Potentially additional damages could be if it takes you longer than the one month of rental you have to rent the place, but I'm assuming it shouldn't take that long.

Hello--

I'm a fairly new REI in NOLA. I've been renting out the other side of my shotgun for four years and recently purchased a duplex in a nice, safe residential (but lower income)neighborhood in the East.

I can rent it out without Section 8, but should definitely be able to get more rent if I accept Section 8.

I've read posts on here on about the pros/cons of Section 8 in general, but I would really appreciate hearing from any folks who have or had experience renting to Section 8 in specifically the NOLA area.

Good idea?  Bad idea?  Is the local office difficult/easy to deal with?  Do the tenants tend to always be terrible or be a mixed bag?

Although the duplex I purchased was not gutted, it did need a lot of rehab.  I know I'd be super bummed if all the painting, new flooring, and a thousand other improvements I've made got trashed with my first tenants for the property!  Though I do realize that is always a risk when being a LL.

When the question comes up, most BPers seem to say no smoking is no smoking, because tenants won't just smoke outside.

But my experience has been different.  My husband is a smoker and we were renters before I bought my duplex four years ago.  He never smoked inside the houses we rented and doesn't smoke inside our house.

I write it in the lease for the other side of my duplex that it is no smoking, except outside.  I've had two different tenants who smoked and both of them always smoked outside.  At least, I always saw them smoking outside and there was no sign of smoking on their move-out.

With all that said, I do live in a fairly temperate climate.  It gets hot as Hades in the summer, but the winters are mild.  That unit also has no carpeting at all. 

Here's another article I found.  Ironically, advising tenants to make sure their landlord/PM company reports on-time rent payments, but then (of course) gives little information as to how a LL would do that.  But there are enough kernels I am going to try and track down what the process is.

http://www.investopedia.com/articles/personal-finance/050814/use-paying-rent-boost-your-credit-score.asp