[Coronita]

I shelled out $338 for a brand new fridge recently…… Oh well. Yes, it wasn’t stainless…lol…

[Coronita]

I think the OP is just venting frustration that happens every so often with a rental property, especially when one is starting out…

I (hope) cooler head will prevail, and the realization that it isn’t *that* bad. In fact, I’d say it’s not bad at all…..

There are plenty of people that probably with the itchy rental/landlord finger that either haven’t gone through this yet or missed out over this cycle…

It’s all good.

[Coronita]

still no inventory in MM….

And Qualcomm stock is still close to 52 week high….

[Coronita]

[quote=no_such_reality]Any one have a good tile guy? Our tenant moved out and it’s dropped something coming down the stairs and put a one inch by inch by 1/8th inch deep gouge chip out of the center of the 18 inch tiles

Since the tile was original builder upgrade prior owners didn’t leave any spares.

Unless a temecula area tile guy knows where to find a match I suspect we may rip out the very nice tile and put in engineered wood. I heard we can maybe patch it however the hole is right about where a woman’s heel will land coming of the stairs so I have very little stomach “good enough”

For the OP you may wish to figure out how a simple move out accident affects your $100/month[/quote]

So this is interesting. What do you plan on doing wrto the the tenant’s deposit? Are you going to bill them for the entire tile replacement? It seems like if you do, they will pushback and tell you just to replace 1 tile .. I’m just curious in this situation, would you end up eating most of the cost?

Tile suck for high traffic areas in a rental… It’s cheaper per sqft than say laminate or vinyl or wood these days (material wise), but I’d be worried of tenants dropping stupid stuff on it….But then again, I’m not someone that can afford to do high end rentals (yet)…

Can you take out that tile and maybe 5-6 tiles around it, to make it look like a pattern of some sort…

[Coronita]

[quote=EconProf]I guess I didn’t make myself clear.
The market rent for one’s particular unit incorporates all the factors you bring up. The market rent for an extra nice unit, or a better location, or an ocean view, etc. will naturally be higher. A unit with negatives would command a lower market rent.
Accordingly, one should never charge “above market rent”. Again, the hard part is “price discovery”–to objectively look at comps and find your proper rent.[/quote]

You know I’m not so sure about this…

Call me old school. But I think a some (not all) of these bells and whistles extra might help you get more eyeballs in people interested in renting your place, BUT, personally I haven’t seen a situation in which having these fancier bells and whistles actually increases the price people are willing to pay for rent, IF there is a like-unit that is priced slightly lower that doesn’t have the bells and whistles.

I’ll give you an example comparing one property of mine to a comparable right next to me…

The “comparable”
1) Is 20 sqft bigger
2) Is upstairs instead of downstairs
3) Has granite counters, stainless steel appliances, tile, and upgraded bathrooms.

That condo, whom I spoke to the owner recently, rented out for a whopping $5/month more than my unit. Person also paid $15k more than i did in the purchase.

So I’m not convinced all those bells and whistles are really helping to increase what you can charge for rent. I think there is a threshold in which people say “this isn’t my house, and while fancier stuff is nice, I’m not willing to pay for it”

[Coronita]

…The santee thread that keeps giving…..

[Coronita]

[quote=paramount]To me even .01 is a liability, this is the explanation I got from WF:

Currently, we are collecting the following monthly amounts:
Real Estate Taxes: $209.78
Property Insurance: $54.58

Beginning June 1, 2014 we will start collecting the following monthly
amounts:
Real Estate Taxes: $247.79
Property Insurance: $57.33

Your escrow account also has a minimum balance requirement equal to two
months’ base escrow. Base escrow is the amount of money collected each
month for the future payment of taxes and insurance, as indicated in the
figures above. Because the base escrow amount has increased to $304.12,
your minimum balance requirement has increased to $607.24.

At the time of the analysis, we reviewed a twelve-month forecast of
anticipated escrow activity. This forecast indicates your projected
escrow balance over the course of the upcoming year. In March 2015, the
projected escrow balance would be -$18.59, which is $624.83 short of the
minimum required balance. In order to maintain the minimum balance
requirement, a deposit must be made in the amount of $624.83. Therefore,
I have provided the details regarding the two options for repayment of
your shortage below.

The shortage may be spread over twelve months and paid in monthly
installments of $52.99 beginning June 1, 2014. With this option, your
new payment breakdown would be as follows:

Principal and Interest: $1,183.75
Real Estate Taxes: $247.79
Property Insurance: $57.33
Shortage Adjustment: $52.99
Total: $1,538.86

If you were to instead pay the shortage in full prior to June 1, 2014,
your new monthly payment would exclude the monthly shortage collection
of $52.99. With this option, your new monthly payment amount would be
$1,486.87.

****************************************************

Adding in the $100 HOA this property is now a liability.[/quote]

Parmount your cost went up $53 . where did you get $100?

If it makes you feel better one of my properties HOA is $400/month with a special assessment. But it then again was bought dirt cheap and its still cash flow positive. That and I am waiting for the nice appreciation that will happen

FWIW:

You can choose not to do impound I think… Call up your lender. BUT

You do realize in the state of CA, impound accounts pay a 2% interest rate on the funds impounded, which is more than that 1% CD rate…….

That’s why I impound as much as I can now….. lol…

BTW. I don’t see real estate in your area or San diego coming crashing down. It might slow down or might trickle down. But there’s plenty of sideline money looking for property. I think people continue to underestimate that. I sure do.

[Coronita]

.

[Coronita]

[quote=scaredyclassic]If $100 a mo. Gets you this upset maybe it’s time to sell just because the investment is too irritating.[/quote]

That is a good point too….

But 5% return cash on cash wouldn’t be *that* bad considering a CD is what, 1%? Which brings back it back to the original point.

$100 to jeopardize a nice steady, stable tenant…. Imho not worth it.

[Coronita]

[quote=EconProf]My policy is to look at market comparables and put your rents slightly below the average. Rental comps are just like for sale comps–location, size, condition, neighborhood, etc. all factor in to one right price for your rents. The reason you should come in slightly under the market rent is to keep your vacancy periods to a minimum, and to keep good tenants happy.
What is utterly unimportant is many of the factors people have been bringing up here: higher costs, your mortgage rate, how long you have had it, taxes, etc. The market doesn’t care. Supply and demand results in one single number for your market rate, and that is what you need to discover. Craigslist is a great tool for that. And yes, people, just like appraisers, disagree about that number. So you have to really do your research, and take a cold-eyed, clinical view of the evidence. With that ammunition, raise your rents as much as the market allows, minus a decent margin, more for a good tenant, less for a bad one.
This way a good tenant will have no reason to move, especially if they are rational consumers and also look at comparables.
I run 35 apartment units in a depressed part of the country. I have not raised my rents in six years, because the market remains weak and it won’t let me. My tenants think I am a nice guy for not raising rents. I’m not. I’m just listening to the market.[/quote]

I brought up the subject of mortgage rates not because it is a factor of rent prices. But in OP’s contemplation whether “he should sell right now” (if indeed it has “turned into a liability” and he’s running negative each month….)

[Coronita]

[quote=paramount][quote=spdrun]G-d bless you, I like your way of thinking. May there be many more people who think like you in SD in the upcoming year![/quote]

If a property is a liability, why keep it?

Tax benefits? The only significant tax benefits in my experience come from depreciation. All depreciation does is defer tax liability.[/quote]

Someone else is building your equity…for you…Are you actually negative each month?

[Coronita]

[quote=paramount]
What is prevailing market? The zillow rent estimate?

Right now I’m 6% under market based on zillow.

[/quote]

Craiglist, minus seasonal adjustments due to availability…

For example, rent differential is +- $100/month for a 1/1 depending on if you’re trying to rent it out close to summer may/june/july or trying to rent it out in the winter… october/nov/dec..

(In MM, it also depends I guess on Qualcomm’s hiring mood :))

I dodged a bullet recently…Rented out my place at a time when the inventory was low and demand was higher due to a flux of new hires… Right now there’s more inventory on the market right now, though it’s still pretty tight…Price differential is about $100-$150/month right there….

[quote]
The reason the $100 is an issue is because the numbers don’t work.

I bought this property over 1 decade ago (early 03) – probably time to sell.

I owe 210k – I can probably get 310k.

Appreciation is slowing – the time may be right to sell while:

*Pricing strength still decent
*We’re in the selling season
*My carrying costs are up, now a liability[/quote]

How much did you pay for it (total)?

What’s your loan rate?, payments?

Assuming around $300k, 5% cash on cash for it isn’t terrible.

[Coronita]

.

[Coronita]

One side note… What I do think is *fair* game at lease renewal time is changing what is considered “included” in the rent, if something changes..

An example would be utilities.

Suppose you property is in an attached community with initially water/trash included, and in your original lease agreement….

In your lease agreement, hopefully you included a statement that says that water/trash is free only to the extend that it is provided for free by the HOA….

If you didn’t do that in your first lease, and let’s say water/trash is no longer free, I would put that into the lease renewal that water/trash is now paid by the tenant… (You shouldn’t be in this situation to begin with, frankly…)

[Coronita]

[quote=scaredyclassic]The next renter, no problem raising the rent. It’s psychological though for the current guy. Make him feel unappreciated. I disagree though, maybe a 2 or 3 % Inc is a good compromise. I was a good tenant same place 5 years LL raised it I think 2 perc. One year….. didn’t bother me at all. $30.00 FOR YOUR GUY. DOUBT THAT WOULD HURT OR BE QUESTIONED. Sorry for the caps.[/quote]

I don’t raise prices because my costs necessarily go up. I raise prices if my rent falls behind the prevailing rent prices by more than 10% comparable to someone else.

[Author]

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