All Forum Posts by: Stephen Shelton

I have empathy for both you and your tenant. Asking them to sign a new lease would seem like bait-n-switch at this point. I would take the fight to the property manager. 

Here's a great video comparing tank vs instant water heating:

https://youtu.be/vRUgFmBaSCM

Well, at least I think this is the video I watched a few months ago because I'm in a noisy environment right now and can't confirm! :)

On the one hand I can understand a tenant believing they should not pay for the days the home was not livable due to the home itself but:

25 days / 30 day month = 83.3% habitability

Also the lack of hot water does mean the home is 0% habitable... 

but on the other hand it was a bit arrogant of them to take it upon themselves to deduct 25%. 

If your local cellphone tower is down for 5 days what happens if you pay 75% to AT&T without even brining the issue to their attention?

It does prey on the people who want to get rich quick, but they allow themselves to be preyed upon! Every few months I get the "gift" of free tickets to the limited seating of Flip or Flop's Tarek and Christina's live show. I have no intention of going because I have a feeling it is nothing but an infomercial with a timeshare-style sales pitch. I believe real estate is attractive to the "get rich quick" mindset because everyone is familiar with a house. You aren't trading international currencies or digital coins. You aren't buying stock in some tech company when your knowledge of tech is limited to cat videos. It's a house. It's rooms and plumbing and all that other house stuff you've interacted with your entire life. Construction is geometry not calculus. It's all familiar and not foreign like investing in annuities so it gives people a false sense of ease. So then you turn on HGTV and see someone buy a $50,000, spend a few weeks repainting, and then sell it for half a billion dollars. It's no wonder people fall for these infomercials and marketing scams.

Word of warning for those considering PayPal in the US. A transaction will cost you 2.9% of the total payment plus $0.30, and that's assuming they also have a US account. If their account is based internationally (for example you are renting to students) then the fee is 4.4% plus $0.30.

Example: I'm a small-timer. One of my units is $875 a month. If she paid by PayPal I have a fee of $25.68 a month. If I pick it up and take it to the bank I save $308.16 per year and I'll get paid back roughly $0.52 per mile at tax time to go to a nearby town I'd probably need to goto anyway for lunch or something.

But at least it's quick and easy, right? Not so much. Chances are your rent payment will go onto a 21 day hold as part of their security system. That hold can be reduced, but it works best for transactions with tracking numbers. Here, there is nothing to ship so you have to go back into PP and mark it as "processed" and reduce the hold to 7 days. But then the money is in a 0% interest PayPal account. To get it to your bank you can send it on a 1-5 *BUSINESS DAY* trip to a checking or savings account for free, or a 30 minute trip to a debit card for $0.25 until you find that the 30 minute trip is stalled in a 72 hour security review. Yea real fast. A check in the mail is easily faster than all of this.

This is also assuming the system will even let your tenant pay through their system. PP wants to bring order to the chaos of online transactions, nobel pursuit, but it will err on the side of caution. Now the rent's due today, PayPal won't allow your tenant to pay, and now they're calling you to make accommodations because they tried to pay but PayPal won't allow it. What do you do?

PayPal has a lot of benefits, but as a means of collecting rent payments is not one of them.

I swear I've never heard the word "Garburator" in all my life. I had to look it up! lol The rule of thumb I've heard is that they are suitable for homes with public sewage but not for homes with a drainfield because they debris they create fills up the tank. That being said, I grew up in a home with a drainfield and a garburator (I think I like that word!)

If I lived in an area hostile to landlords or a place with a voracious appetite for tax dollars I'd certainly consider investing outside my home area (actually I'd probably consider moving), but I think it would be hard owning property that I can't work on, see, or visually inspect easily.  You'd have to trust other people way too much for my comfort level.

For example, last September I was disconnected from the world when Hurricane Irma hit. The morning after my first goal was to visually inspect my house and then them my next goal was to visit my rentals. If I was where I used to live, 1000 miles away, I'd been climbing the walls waiting for information. I also wouldn't have been able to do anything to prepare those houses for a beating.

... but on the flip side if some of my rentals were a few states away then I wouldn't risk a single natural disaster taking all of them out at once.

I'm curious, what is your relationship with this tenant and why aren't you renewing with them? Would it be possible to go to the property and simply ask what's going on or has the relationship become hostile and potentially violent?

I agree that the seller would be flying nothing but looking for the first warm body with a pulse to sign that lease.

Another advantage is that you'd start with a clean slate once you own it, and you will have some time to do all the necessary repairs while the house is empty. Working on an empty house is significantly easier than working on an occupied house.

Are the property taxes in those beach towns brutal? I'm on the western side and I'm sure they're lower for a comparable house but the taxes have been racing up pretty fast.