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HLS
ParticipantI’m well aware of what goes on but I don’t see how it’s possible for anyone who had “a bankruptcy AND foreclosure” in the last 6 years to have bought another house since then AND have enough equity to do a cash out refi recently.
I don’t doubt that you have ‘personally heard’ about 4 different people doing this but do you happen to actually know any of them ?
I’m just curious. I’d like to speak to any one of the four and understand how they did it.ParticipantThe best way to increase your odds of having a problem tenant is to have the lowest rent.
The lower your rental rate is the more applicants you will have.The more applicants you have, the more confused you will be about who is the best choice and believe it or not, the more likely you are to be slapped with a lawsuit for discrimination by someone you turned down.
In a land where anybody can sue anybody for the cost of filing, there are perils.My suggestion is to maintain the properties that you own. Charge top rent and let the tenants know that you do this but will maintain the property if there are any issues, and don’t get emotionally involved with your tenants (and their problems)
You might want to have someone else show the property for you and take applications.
Review the applications before you meet the applicants face to face. Charge an application fee to cover the cost of running their credit (with their permission) and require proof of income.Charge the maximum late fee that you can and NEVER ever. EVER waive a late fee.
If rent is due on the 1st but not late until the 5th, you can still deliver a 3 day notice on the 2nd.Do not EVER let the inmate run the asylum.
I believe that month to month agreements are better for the landlord in many cases.With a lease you cannot get rid of a miserable tenant as long as they are paying their rent
(unless a violation of lease, which they often correct)
My longest month to month tenant stayed over 13 years and only moved because I sold the property.A happy tenant may stay longer than they thought without the pressure of a lease.
If they don’t want to be at my property for any reason then I don’t want them there either.Don’t screw tenants out of their security deposit.
The rent they pay you INCLUDES wear and tear.
Be fair with what you charge them for.
They probably need it worse than you do, and I believe in karma.If you are uncomfortable charging high rent, another option is to offer a half month or full month credit after 12 months of paid rent on time.
Baker’s dozen. 13th month credit. Equates to a 3.85% or 7.7% discount.Don’t micro manage your property and keep tenants waiting when a repair needs to be made because you cannot get over there to fix it yourself.
Find a good handyman that is available to go check out the problem and provide a temporary solution quickly if a follow up by a professional is required.If your tenant is inconvenienced by a flood or interior damage, hop on Priceline and find them a decent place to stay for a couple of nights without them having to ask you for this, and apologize for the inconvenience.
MOST IMPORTANTLY: Read the state handbook on tenant/landlord rights and talk to someone who can explain anything that you don’t understand.
There are plenty of other ideas. I suggest mine with over 30 years of experience with many tenants.
PS: Don’t worry about nail holes in walls. 😉
ParticipantAN,
I don’t think that ‘normal’ inflation like the 70’s is possible again anytime soon.I believe that 2 other extreme scenarios are more likely,
(1)Hyperinflation such as Weimar Republic 1921-1924, Argentina inflation and Zimbabwe inflation 2008.
(2) The collapse of the US Dollar that would make the 2008 ‘crisis’ look like a walk in the park.The more likely scenario is several decades of sluggish economic activity and jumbled, confusing, manipulated reports released by the govt to give the average person an illusion and false sense of security that ‘things’ are in fact improving.
The biggest threat to this country (and possibly the world) that virtually nobody is talking about would be the collapse of the 401K system that people have been fooled into believing is a ‘safe’ vehicle for a secure retirement.
It’s a myth that has been perpetuated by an industry that makes a fortune managing these accounts of ‘pre tax’ dollars, whether the investor ever makes a decent return or not.
Here’s a link to an interesting article:
http://finance.yahoo.com/news/retirees-suffer-401-k-rollover-040100455.htmlThese are real dangers that most people (including experts) would tell you could never happen….just like the experts said that the housing market could never collapse.
It was only due to govt intervention AND irrational emotional people that kept the housing market from REALLY collapsing.
In an extreme situation, the govt is only capable of so much.
Participant[quote=spdrun]So you list the two properties $250 under market and rent them to bus drivers or grad students for a year. Shouldn’t be that hard to rent if you drop the rent by $250, and you’ll still break even.[/quote]
You sound like a real estate agent that has a simple answer for what could be a huge problem.
Assuming that the folks that lost their jobs agree to leave quickly & peacefully and leave the place clean, you may have limited down time.I have seen divorces & job loss change people 180 degrees. The nice calm friendly tenants who pay their rent on time become the enemy squatter from hell and not only does an eviction cost you money for legal fees, you could be facing up to 6 months of unpaid rent and a destroyed property.
It doesn’t happen to everyone, but be a landlord long enough and you will deal with problems that you never thought would happen to you and that usually comes with expenses that you never expected either.
Flippantly saying “just lower the rent $250 and your problem will go away” is naïve at best.
Participant[quote=ljinvestor]HLS- Besides agents selling people on investing in property, what else out there currently doesn’t seem right to you?
[/quote]
Not a subject that you want to get me started on.It’s not selling people on investing that concerns me, it’s the misinformation that SOME agents provide in an effort to make the sale.
IMHO an agent has no business EVER telling a buyer that a property is cheap OR that it is a good investment. Using phrases like charming, and needs TLC etc are just opinions. Even a view is subjective.
In an effort to make money, surgeons perform surgery, mechanics repair cars, used car salespeople sell used cars and real estate agents sell used houses.
The average net worth/financial knowledge of many agents is horrid, yet many people look to these ‘experts’ for what is probably the largest financial decision of their lives.
I gladly counsel buyers from the financial side with options and information that their agents
are either incapable or unwilling to share.
There are often options that buyers aren’t aware of.There are many great agents but the majority just seem to have the attitude that it’s always a great time to buy & real estate always goes up.
Simple negotiations that often do not occur can cost or save people many thousands of dollars over time.
ParticipantSome people cannot handle losing $500 a month.
It isn’t always easy to sell a property in many areas without taking a huge loss.The payoffs ‘years down the road’ are not guaranteed. Most people who become landlords aren’t looking to learn a lesson, they are looking for a decent return.
Major expenses like roofing, piping/plumbing,
professional deadbeat tenants, and other problems
can cost multi thousands to solve, and payments need to be made even when the property is vacant and not producing any income.My point is that many people are just not realistic
about the long term potential problems/expenses.ParticipantArticles like this one that are printed every day are just silly.
The writers are repeating govt propaganda.
Opinions are expressed as facts, details are misleading, individuals are mentioned to support their idiotic claims, and the worst part is that people believe and quote the misinformation as though it is verified.There was a huge refi boom through May 2013, but I do not believe that the majority of fixed loans today are sub 4%.
Only a small % of savvy people played the game of multiple refi’s all the way down.Adjectives used in all articles are subjective & opinions
“Soaring, tight, potential, undermining” etcWhat is the definition of ‘housing recovery’ ?
Back to the highs of subprime & no doc loans??
the houses were never really worth those levels, it was only the easy financing that pushed prices.
Most people are delusional about housing, including experts & policy makers.
It’s pathetic & sickening.ParticipantIt concerns me when agents sell people on ‘investing’ in property when they have zero experience themselves.
Like investment advisors that have no skin in the game but their income relies on advice to their clients.
Many real estate sales agents are dangerous.I see a lot of discussion about buying rental property and only talking about income vs. monthly payment.
Worst case scenario isn’t brought up.
I’ve been a landlord for over 30 years, a major expense is going to happen. Not everything is covered by insurance.Being a landlord isn’t for everyone. There can be a lot of pain associated with it that can cause personal & financial problems.
Real estate has become a ‘generational disease’
and I do not think that all the benefits will repeat themselves.
Something just doesn’t feel right to me about what is going onParticipantDo you really believe that property at these levels is really a good ‘investment’ ?
Do you think that they will be worth more in 10 yrs ?With realistic maintenance & vacancy factors, you are possibly looking at a zero or negative return on your $100K investment.
How long will interest rates be kept artificially low and what’s going to happen to the price of average real estate if mortgage rates go back to the 6% range
What’s going to happen to the country if there is a stock market crash and the untested 401K system
collapsesApril 9, 2014 at 7:28 AM in reply to: Advice sought on renting out old house versus selling and taking the money #772673Participant1. Take the tax free gain NOW, before the option is taken away.
2. Buy newer property elsewhere (multi units, or 3-4 SFR)either all cash or 50% down and get $5k+ a month income.
3. Use a good property manager.Part of the benefit of rentals is depreciation AND doing 1031 exchanges.
Your current cost basis is low. Establish a higher cost basis with the same equity.I think it’s silly to rent out a $700K house.
You generally get more income (and potential appreciation) from 2x $325K houses.
Do not count/expect any appreciation.When interest rates go up, it’s going to be harder to qualify for financing.
I think we’re in a bubble inflated by low interest rates.
Most people do not care what they pay for a house, they only care about their monthly payment.
If they cannot qualify for a loan they cannot buy.ParticipantNic…
What was the end result ?
Epilogue please!ParticipantWhy bother asking for a list ?
If their statement to you was more than 21 days after termination, just ask for a FULL refund of your deposit. Period.
Why would you want to get in a discussion with them about what was done/not done… needed/not needed. ???Regardless of what a tenant does, a landlord can always say that they weren’t happy with what you paid for to have done, and have it done by ‘their people’ and charge you for it anyway.
Unless you have a specific understanding IN WRITING with a landlord that they will accept the work that you have done, just leave a place broom clean and lock the door on your way out.
There are so many idiot landlords, there is a good chance you will end up paying for the same item twice.
This is such a simple subject that so many tenants make complicated.
Your rent includes ‘normal’ wear & tear.
If you don’t know what that means then take your landlord to small claims court and let the judge decide.Participant[quote=carlsbadworker]But couldn’t the FHA borrowers just refinance after LTV drops below 78% to conventional loan?[/quote]
IF and when someone with an FHA loan gets to 20% equity, who knows what rates will be at that time OR if they will be able to qualify for a non FHA loan.
**There is a very high % of people with mortgages today that cannot qualify to refi to a lower rate for one reason or another. Regardless of equity, income, credit score or assets. They are stuck.The govt programs like HAMP, HARP, CRAP & PIMP only helped a small % of people.
Taking on a new FHA loan today is going to cost a small fortune over the life of the loan.
The compounded cost will be huge. If the same ‘extra’ MI dollars were used to pay down principal, it would reduce the interest paid by tens of thousands of dollars over the life of the loan.
Most people wont careIMO if FHA didn’t exist and at least 10%-20% down was required to ‘buy’ a house, prices would be a lot lower and less people would be ‘homeowners’.
This is not what the govt. wants!ParticipantBG,
it is all part of the ‘entitlement’ culture and the short term views that most people have.
No sacrifice! The word austerity is not in their vocabulary….“most Americans are only focused on the short-term because the mainstream media is only focused on the short-term. Things are good this week and things were good last week, so there is nothing to worry about, right”?
Many articles have been written that have interesting perspectives, but most people either want to dismiss them as nonsense or just ignore that they exist.
2. http://theeconomiccollapseblog.com/archives/why-is-the-world-economy-doomed-the-global-financial-pyramid-scheme-by-the-numbers
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Ignorance is bliss. -
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