All Forum Posts by: Shain Ismailovski

You're just under the 1% rule in terms of rent price. If you're pulling in $667 a month that would be $8,004 a year, but with taxes at $8,401 that alone is wiping you out. Your other expenses further net you into the negatives. 

I usually go by FICO scores and a "good" FICO score starts at 670. Per Experian, only 8% of people in this group (670-739) ever run into delinquency issues on their bills and anyone below 670 is considered subprime. so I use that as my baseline. There isn't much need to modify unless you are targeting lower income areas or subsidized housing but even then I'd be careful. Ultimately, this is to protect you as a landlord and if you lower your standards you may find yourself appealing to a lower grade of tenants and running into all the "fun" issues they bring. 

Building for the sake of renting may not work out too well from a cash flow perspective. Since rent is a "slow drip" so to speak it may a long time to make back all the out of pocket expenses it took to build the properties. Also, the costs to build may be substantial enough that you may be better off just selling the land and using the money to either flip, like you mentioned, or buy already built rental units. You could also build homes to sell instead of rent that may net you a better return depending on the area you're in, the lot locations etc etc. The concept of building is fun and exciting but once you get down to the numbers it oftentimes doesn't work for smaller scale investors/developers 

You can always expect competition in the rental business, but more so when you are competing against bigger apartment buildings. A lot of renters prefer actual apt buildings because they offer more features and are new compared to most standard multi-fam homes. While you should hopefully be able to still rent your property you may see an increase in the length of vacancies or may have to maneuver a little more to get your units rented out, and unfortunately that often times means undercutting the bigger apts rent prices. 

I have a tenant that is currently running up their water bill to an absurd degree (Hot water is something I am responsible for). My last water bill was $1300 (It's never been more than $300 before bringing these tenants in.) It is a two family home, but I have never had an issue with my other tenants this only started happening when these new tenants moved in. I thought I had a leak but have had the whole system looked at and nothing was found. These tenants deny they are responsible for the increase. What course of action should I take as a $1300 water is not sustainable? 

Welcome to BP! Jersey City is an interesting rental market with lots of potential. I've been looking at it for a little while. 

Only if something significant has changed for the property or you feel like the current description hasn't been helping. 

You would want to get a mortgage from a cash flow perspective and use as little of you savings as possible. If done correctly your mortgage and expenses will be paid down by tenants and you will inherit a property essentially at little to no direct costs to you, while it's continued to appreciate in value. This where you will see a larger return on your investment.

Remember to keep your hands on 10 and 2 :)

I'd be surprised if this was a deal breaker or would affect rent prices. There are houses that are built next to graveyards that don't have any problems with vacancy. It will depend on whether or not the property looks like a crypt itself that would have more of an impact. Houses built pre 20th century tend to come with a plethora of issues I'd be more concerned about that. They're usually priced competitively because the costs to bring everything up to modern times will be extensive. Roofing, piping, electricity, plumbing, and the foundation should be your main points of focus in a home as old as this along with what you mentioned.