All Forum Posts by: Sean Smith

@Zillur Nazia great questions and warranted concerns. 

In my experience:

- Nightmare scenarios are few and far between. The stories you hear are often outliers and typically a result of ignorance. Not keeping up to date on the changing rules and regulations, not updating your leases regularly, lax screening, making exceptions with tenants, etc.

- I am continuing to buy in Snohomish and King county in 2024 much like others in this forum. The deal just has to make sense.

- I've never had a client use Rent Guarantee Insurance to my knowledge, nor do I use it myself. I won't knock it down as a bad idea, but in my perspective I'd rather hold that insurance premium myself and use only if needed. The risk of a non-paying tenant isn't high enough for me to invest in a policy like that, at least not today. Also worth noting that insurance companies are quite good at finding ways to challenge payouts.

- Section 8 and Housing Voucher programs are helpful in that they "guarantee" a portion of the rent. From personal experience they can be a challenge to set up and communicate with, however once the rent is coming in it's not too difficult. They do require more oversight into your leases and increases year over year. My perspective: if you're only trying to find a Section 8 tenant, you're missing out on a large renter pool of qualified applicants searching for housing.

- I have successfully recovered unpaid rents/damages through the collections process. When done correctly these often arrive in small monthly installments over a multi-year period. 

- The best shield for a small investor when you're actively in a non-payment non-payment scenario is the confidence to navigate the unlawful detainer process. Serve notices correctly & timely, document everything in writing, have a rock-solid lease that you update annually, and use a great eviction attorney. Proactively, you should be holding a reserve, screening diligently, and handling maintenance items swiftly (slow maintenance is where tenants are typically most frustrated and contentious).

- It is not clear that we'll see a major shift in favor of rental property owners here in the Seattle area, however navigating the current market isn't overly challenging if you're playing by the book and keeping up to date.

@Enes A. The risk is having it improperly installed/not up to code, it getting flagged by a city inspector in the future, and having a major headache down the road. A few years back I took on a condo with a large custom window I later found out was unpermitted. During winter it severely leaked and I had to move the tenant out from how much damage it caused. Couldn't replace the window 1 for 1 because of a multiple month back-and-forth between us, the HOA, and city inspectors. Turned out to be a very long and expensive project just because of a poorly installed window. I'm sure it's not the answer you want to hear, but there's always an up-front cost for peace of mind.

I've managed properties in some of the toughest markets across the country (SF Bay Area, Sacramento, now Seattle) and this article sums up exactly how challenging it can be for the small time landlord. Legal "goal-posts" never stop moving, and if you aren't running your investment property like a true business you can get burned. Give an inch to a professional-tenant and they'll always take a mile.

@Maleek Martinez welcome to the BP community! There's a great network of Seattle folks on here to help you along the way.

@Anna Bee no matter who you rent to (or even if your property is vacant) squatters can be a risk. Section 8 doesn't necessarily reduce the risk of squatters in my opinion. If anything, limiting your property to only Housing Choice Voucher programs may reduce your chances of finding a great tenant quickly. 

Your best protection is a comprehensive screening process and professional operating procedure for when tenants are in place. Quick repairs, great communication, and proper serving of notices go a long way to ensure rent is coming in routinely.

 Sounds like the right place to start! Best of luck @Wayne Lee

@Wayne Lee the Seattle market can be a tough one to break into, especially with median home sales hovering around $800k. In my opinion, the location of your investment should be largely driven by your overall investment goal and risk tolerance. 

Are you looking for strong cash flow? Seattle is getting squeezed making cash flow harder to find.

Are you looking for appreciation and population growth? Historically, Seattle is a phenomenal market for this. I suspect Amazon, Microsoft, and the other tech giants' push for return-to-office is going to drive more high-income activity into the rental market again. Especially in areas near SLU, commuter lines, etc.

How risky is our market? Of course Seattle (and even the surrounding metro's like Tacoma) is less landlord-friendly than others. Check out Pierce County's Measure 1 that just passed this week. It's aggressively favoring renters, putting more restrictions on landlords. This should be a point of consideration when looking locally.

My advice: whichever market supports your investment goal (cash flow/appreciation/etc) and your risk tolerance (laws & restrictions) is a good place to start looking for deals.

@Chris Hixon congrats! I bought my first Seattle property (Shoreline, actually) a few years ago. Sounds like you've knocked out most of the work already, but if you need recommendations for some solid vendors on future projects I'm more than happy to share. I've churned through a lot of bad ones to find the great ones.

@Tom Server As a property manager I managed homes across a wide geographic area, sometimes 1.5+ hrs away. It's not impossible, but there are absolutely moments where you (or someone you trust) need to get out to the property. If you don't mind the occasional mini-road trip and you have confidence in the tenants/team you have in place, it shouldn't hinder you. The real question is: how much is your time and peace of mind worth? More or less than 10% per month?

@Jessica Sawyer it very much depends on your area. Reno NV isn't traditionally a HCOL market if that's where your rental is. I'd ask your property manager if they have a second vendor willing to bid on the job to choose the most cost effective option. If you are turning the property over though, consider the time (aka lost rent) it will take to source more quotes and compare vs moving quickly and filling the vacancy. Best of luck!