All Forum Posts by: Steve Smith

Originally posted by @Nathan Gesner:

Originally posted by @Forest K.:

@Steve Smith, I do want the tenants on my lease eventually, but I don't want them to think any changes are coming. I'm also not sure what leverage I have regarding incentives to sign since their rent is already ~30% below the market rate. Though, maybe they'd be happy to simply sign something with their current rent as it would alleviate their fears of us increasing the rent?     

Why would you sign a lease if they are 30% below market?

When tenants are that far below market, trying to get them up to market is more likely to cause problems down the road and you may end up having to kick them out in the end. Give them notice and move them out. Clean the place up and rent it at market rent to tenants you've screened and selected.

 Nathan,

Good point, but don't believe I said sign a 30% below market lease, however, I'd sign one for perhaps 20% below, depending..... I'm generally below market but demand more from my tenants and it's working find. I believe we're talking about buying a property with tenants IN there. If they were good and trainable, I'd keep them. But I'd approach it with a positive "I'm going to keep you" attitude, and eventually get them on my agreement. But, if the property is a mess, most likely I'd move them out, clean it up and re rent closer to market.

Absolutely, take a course. But take one from someone that practices what he's preaching, and has accomplished what he's teaching many times. A course should cost somewhere in the $300 a day, give or take. Most of the really good guys have websites and they have references to other gurus. You never need the 10 and $20k courses, and most of them are taught by flakes anyway. There's also good books.

You can do MUCH better with training than just "guessing"....

ABSOLUTELY, I'd argue strongly to invest where you live. You don't say, but agreed, FL is expensive. However that doesn't mean you can't get a good deal or perhaps go to a town close by that has more reasonable prices. (but the rents will adjust, too.)

Lucas,
Well, not in my state. Local county law do quite well in restriction and they vary a lot. ADUs might ad value in the right neighborhood, but doubt they'd do well where I invests. I'll stay with one house at a time. Don't do multi.

ADUs would not be my thing, and wouldn't work in my area. First, I like SFHs and they work well. When you add a unit to them, they often go DOWN in value. And then you have two tenants. And a lot of county codes would prevent this. Besides, construction costs would make it a poor investment.

I'd rather have ONE good tenant in ONE good house, which has worked great for years.

Good start. For the next, I could argue to do your own management... MUCH better, but you need to learn how. Also, rent out on a two or three year term (with option to cancel), and with good tenant selection, you'll minimize tenant damage.

And next time around (if the marker softens a bit) consider seller financing on your next house.

Good start!

So, you're going to buy and resell with terms? Gotta ask why? Gut feeling there's better things to do.

I've never shown a rental or sale home to someone. I always use a lock box and give them the combo after I've qualified them. They have to fill out a reasonable app with info, SS no. and a copy of their drivers license first. Never had a problem with that. I do change the lock box combo occasionally.

Interesting ideas. Best to find one with an ADU already built in, or very easily converted, preferably separate entrance and parking. Another option is look in the USF area for a larger home with extra BRs and a rec room and rent to students. A bit more hassle but you'll probably have a better tenant and much easier to collect the rent (semester to semester in advance).

Live there a year, and buy another one for yourself, and keep the other for income. Buy another the next year... etc.

Goal would be to get 10 houses free and clear, and get out of living with a tenant asap. 

You'll want to have YOUR lease with all your tenants, so you need to get all of them on your lease. May take some time, but easily done if you offer some incentives. However, having the lease signed gives you control over how they behave, and would address the unregistered car. And you can have a long term lease with the option that either party can cancel it in 30 days notice, perhaps with some conditions.

My tenants know to fix their own plumbing problems, it's in my lease. And I give them a discount for doing that. Most comply and I never hear from them. I'm not in the business of doing maintenance on their rental when they are suppose to to it. You must train your tenants properly or they will walk all over you.
If it's an issue that I'm suppose to cover (spelled out in the lease) I have my handy man jump on it NOW. Personally, I don't do maintenance work... their are handy men, tradesmen that will do it much cheaper than I will. I make money buying and collecting rent, not doing low cost work.
Over time, I reward the good tenants and get rid of the bad ones.