Just inspected my rental property for the first time in two yrs.

[VaSteve]

Just take the money you feel entitled to and send them the rest. Both parties will be happier and nobody will kwibble about a few dollars here or there. No need to review lease and whatnot. They won't fight you.

[nostatic]

Originally Posted by Rick Lee

Just not adult-like behavior.

Are you their landlord or their parent?

It's the price of doing business. imho you're taking all of this way too personally, and you kinda sound like you want to be their mom or something and teach then what is right and punish them for what you think they did wrong.

[Rick Lee]

Originally Posted by nostatic

Are you their landlord or their parent?

It's the price of doing business. imho you're taking all of this way too personally, and you kinda sound like you want to be their mom or something and teach then what is right and punish them for what you think they did wrong.

No, their behavior is costing me money. Otherwise, I couldn't care less. I only care about the money.

[McLovin]

Originally Posted by Rick Lee

Perhaps I'm too critical of my tenants because they did stuff I never thought of doing as a renter. I've been renting in Phoenix for two years and personally deposit rent in the landlord's bank on the first day of each month.

By Phx renter standards, the fact that they didn't strip out all the appliances when they left already puts your former tenants in the top 10%.

[Gogar]

Originally Posted by VaSteve

I had 20 somethings rent my place and they deep fried a turkey IN THE HOUSE and ruined the basement carpet in the process.

Wow. I mean . . . . wow.

[fintstone]

Rick

Don't forget to document your expenses/receipts including travel and advertsing to deduct on your taxes. That will help defray costs somewhat.

[mossguy]

Originally Posted by Rick Lee

No, their behavior is costing me money. Otherwise, I couldn't care less. I only care about the money.

Once again, repeat after me: Operating Costs....Operating Costs..

Best,
Tom

[fintstone]

Unlike many landlords, I have no intent of receiving monthly income from my rentals. I have more than one, and my goal is that if the rents and expenses of all summed together, there is no net loss each month. Any extra goes to paying down principle or repairs/improvement. Eventually they all are paid off...just in time to help fund my retirement. If you put a rental into service with a 15 or 20 year loan the year your children are born, you will likely have enough equity to pay for their college when that time arrives (better yet if it is near a colllege they attend as they can stay there when the time comes). I did so with my daughter, but she received a full scholarship for her undergrad, grad, and PhD...so I did not sell that home, and it will add a significant amount to my retirement. Since it is long paid off, the rents have helped provide her with any funds that she might have needed for school, car, etc...so she could concentrate on her education and the entire college experience.
I have lived in all my rentals and selected them as my own home based on quality of construction, schools, neighborhood, etc. I make the home as nice as possible before I put them in service and keep the rents relatively low to reduce turnover. Preventing the loss of one month's rent per year would allow a landlord to charge at least 10% less rent and still make the same net.

[mossguy]

Fint, I like your style!!

Best,
Tom

[fintstone]

Originally Posted by mossguy

Fint, I like your style!!

Best,
Tom

Thanks Tom. That means a lot. I appreciate the maturity and open minded discussion you bring to Off-Topic and PARF.

It seems that many forget that life is a marathon and what you do in the first mile has a large impact on the last. Getting rich slowly with less risk is just fine with me.

They key to real estate investing is time and leverage (and tax avoidance). If one only breaks even on cash flow and achieves a 2% increase in value of the home...you do very well over the long term if you have little money invested. Most of the time, you can get into an owner occupied home with about 5% down...and almost never more tan 20%. If you move out and put that home into service later, that 2% gain is on the entire value of the home...not the amount invested (leverage). At the same time, if breaking even (including the significant tax break through depreciation and interest and other expense deduction)...you benefit from the gradual payoff of the mortgage (time). If you are able to pay off a home over 15 or 20 years...you can add that amount to the profit since the renter actually paid it off..and not you. So..if you purchase a $100K rental with 5% down, it is very likely that you will turn that $5K into $100 to $150K with relatively little actual work. You can multiply the scenario as much as you have income and assets to support short term periods of vacancies and repairs (which are tax deductible). Catastrophic problems are covered by insurance.

It is best not to be too greedy and the first rental is the toughest nut to crack. If all my rentals were vacant for several months, I have enough reserve to cover the costs. Just like purchasing a residence, over time, the mortgage and upkeep on a rental home seem less as inflation pushes your income and rents you recieve upward. Eventually, those mortgage payments seem more like car payments (which I choose not to have). The payments on my first house seem tiny compared to my that of my current residence.

Another advantage is that, unlike other investments, historically home values and rents have acted somewhat inflation adjusted...so a fixed rate (and fixed payment) works in your favor.

Tax avoidance. After deducting expenses, mortgage interest, and depreciation...it is typical to report a loss which subtracts from other income. Taxes are effectively deferred until you sell the home. This is quite helpful if you have significant other income and a high tax rate.

Finally, as compared to other investments...worse case scenario is that you own a home that you can choose to live in if necessary. I have considered using a rental as a primary home..or possibly a second vacation home upon retirement. You can keep the house well maintained (tax deductible) so that it is in prime condition.

[silverwhaletail]

Originally Posted by Porsche-O-Phile

Two aphorisms come to mind immediately reading this:

"You reap what you sow" and "if you build it, they will come".

I agree completely.


And frankly, given the current economic climate I can't understand why people would be looking to get into the landlording game right now anyway. I've looked into it several times and it never seems to pencil out.

I have not had a tax refund under $20,000 for the last 10 years.

Rental income has made my house payment for probably the last 10 years or so.

Rental Income currently makes the house payment on the 5,046 square foot custom home that I built in 2008.

Rental Income allows my wife to be a full-time mom. (She does all our accounting/bill collecting from home and of course embezzles the heck out of me...)

all in all a very comfortable life on a 45 yr old's street cop salary. Hate real estate all that you want, but for alot of people, as a long term investment strategy, real estate is a solid strategy.

And I'm a damn good tenant who always leaves my places better than I found them.

If you were in my target rental applicant demographic (SoCal, $600-$650 for 1 bedroom, $700-$900 for 2 bedroom, NO HOUSES-ONLY MULTI'S) then you wouldn't leave it better than you found it... All of the good intentions in the world mean nothing when moving day arrives, and "Uhaul needs a credit card", and "my uncle is coming but his truck had a flat tire" and every other reason why the apartment wasn't cleaned before you left. (don't these savages even own vacuum cleaners???)

Here is a great story... I was doing a walk thru of an apartment that had just come vacant that week. A very nice, spanish speaking family walked in and asked if they could rent it, as is. (The adult children, 19-21 yrs, spoke perfect english). They were "desperate" for a place to live, close to the University, so I said okay. The carpet was serviceable but needed to be cleaned. They told me that they would rent a "rug doctor" and clean it themselves. Idiot me offered to let them use some electric fans, lights and extension cords so that the carpets would be dry the next day when they needed to move in...Of course "someone" stole the fans, lights and cords during the night. and of course the tenants didn't replace them or offer to pay for the loss. The idiots in this story are not the tenants. The idiot in the story is me. "You reap what you sow."

[RoninLB]

Originally Posted by fintstone

Better be careful to research the law where your property is regarding keeping damage deposit money to cover disputed or unpaid rent. AFAIK, in most places, they must be kept seperated...and interest must be accrued on any deposit.

it's local housing regs about interest on security deposits

in city of ny if an apt bldg has somewhere above 10 or 14 units interest is accrued, and then in Las Vegas' county no interest is accrued no matter how big the complex is

all afai know

[RANDY P]

Originally Posted by Rick Lee

I'm not sure what I'm gonna do other than keep $150 for the cleaning fee and the $50 they lied about paying to the garage door installer, that I paid for them. I'm sure they won't sue, as they now live in TX and the $1400 left of the deposit wouldn't be worth it. I mean, instead of replacing a smoke detector battery, they took it down and left it on the kitchen counter. Instead of telling me the doorbell needed replacing, they bought a new switch and taped it where it would normally have snapped into place, had they not had it upside down. How do you account for this kind of BS in keeping some more of the deposit?

I need to review the lease and checklist when I get home. Since they're still on the hook for April, I wouldn't be surprised if they just didn't pay and exepect me to keep the whole deposit.

Charge them for repair time on the doorbell and the smoke detector...

rjp

[Rick Lee]

I went back yesterday to see how much of a difference my cleaning lady made on Saturday. She really made it shine. The fact that she was able to make the carpets look way better without even shampooing them makes me think my tenants totally lied about doing them before they left. Best $150 I ever spent, which I will take out of their deposit.

[Gogar]

That's good news.

[Joe Ricard]

You got to think "Why are you renting"? To pay the note on the place while you are living somewhere else. or you are using this as a investment. If it was easy everybody would do it. Most all landlords are in the same boat. "renters suck"!!!!!!!!

But as long as they pay the rent and haven't burnt it down ................ Which you are insured for.

Just collected rent today and I find out the A/C is on the frtiz. Great my Guy is going to fix it tomorrow. Write it off and move on. I was getting worked up over renters being slobs. I figure thay just can't help it.

[Rick Lee]

Originally Posted by Joe Ricard

I was getting worked up over renters being slobs. I figure thay just can't help it.

Maybe I'm just old fashioned. The place I'm currently renting has not a lick of damage since I moved in two years ago. Sure, I've let the back yard go a little, but I will have a crew come in and make it shine before we vacate. I haven't spilled a single thing on any carpets, have been a day late on rent once only and only because I forgot to pay it, not because I couldn't or wouldn't. I am 100% positive my landlord will be very sorry to see us leave.