Hey MemberSince99, Let's Do a Home-Buying Thread

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JoDa
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Postby JoDa » Sun Feb 23, 2014 11:18 pm

Those are both risks with rental properties. I stave them off in two ways. First, I do a thorough screening with TransUnion (they now offer low-cost screening to independent landlords) and by calling previous landlords (my app requires permission to call two, or two unrelated personal references if they *do not have* two previous landlords). Second, I pop by on the regular. Of course, there are limits, written into my lease, regarding notice, but nothing stops me from giving 24 hours notice and stopping by to "inspect the furnace." I guess, kind of third, I have friends in both my buildings, so I will hear if there are obvious problems from them (noise complaints, extra occupants, pets I didn't approve).

I also do the basic stuff. I collect the maximum security deposit allowed by law (one month's rent, here). If they destroy something in the interim, my lease allows me to collect the expenses from them immediately. And I live such that a few months without rent or paying upfront for damages won't destroy me financially while I collect my due. And I carry excellent insurance.

One nice thing, for me, is that all the places I rent are small-ish condos. Even extensive damage wouldn't amount to repair bills that totally broke me. Though, I will say, it's riskier in areas where you don't have the upper hand as a landlord. I generally have 5 or more potential tenants to choose from. Without such a strong rental market, I'd build a larger buffer into my bottom line.
CSP $19K
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UMP $11.5K
Target Visa $1.5K


MemberSince99
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Postby MemberSince99 » Mon Feb 24, 2014 6:40 am

You gotta admit, renting is for chumps. It's a fool's game. I've really had my eyes opened. (In terms of being a tenant that is). You have all the rights of living in the parent's basement, yet you pay typically MORE than a mortgage would cost you and get no write-off of the interest not to mention you build no equity. (the places I'm looking at, even at 15 years, the mortgage is still cheaper than the rent I pay right now).

JoDa
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Postby JoDa » Mon Feb 24, 2014 11:58 pm

It depends on where you live and the strength of the rental market versus the buying market. In some places, it will cost you far more to buy, in others, far more to rent. I tend to mostly leave my tenants alone unless I have reason or information to believe something is up. And when I do "pop by," it's only for 10 minutes unless I'm actually fixing something that takes longer. But don't you DARE call me to reset your garbage disposal and let me find you're "sitting" a friend's dog without my permission. I give permission for stuff like that freely (I love pets, have a dog of my own, and everything I own is low-risk for pet damage - i.e., no permanently installed carpeting), but I DID demand you seek my permission, and explain up front that I'm pretty free with it but want to know.

You're right, in thought, though. At the end of the day, it's my house, and I'm looking out for it. So, I restrict what people can do with it. I dunno, maybe it *seems* wrong, but, at the end of the day, the tenant is not the one painting over a terrible wall color choice, patching up holes from installation, or remediating pet damage, if their landlord gives them totally free reign. Also, I HAVE to put in other restrictions because I rent condos and them are the Association rules. For example, should I score this new property and rent mine, pets will be limited to 2 max, cats or dogs only, 50 pounds total. That's an Association rule. A large, lazy dog would do fine in my place, but I'm simply not at liberty to allow that. In my other place, sorry, but you have to buy a lot of area rugs...the Association requires you to cover 80% of the floors in furniture or area rugs. If I lived there (and I do, for my place I'm potentially renting soon), the rules would be the same for me. I do try to "explain" this by providing the covenants to the tenant.
CSP $19K
BOA $4K
UMP $11.5K
Target Visa $1.5K

JoDa
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Postby JoDa » Tue Feb 25, 2014 12:02 am

Also, when I was renting, I had an incident where a nearby friend asked me if she could come spend the night at my house WITH HER DOG because her heat was out. I phoned my landlord immediately and asked her, given the emergency, if that would be okay...the only carpeted room in my house was the bedroom, I'd keep the dog out of there, and it would only be for one night. She consented without hesitation. Asking nicely does pay.
CSP $19K
BOA $4K
UMP $11.5K
Target Visa $1.5K

JoDa
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Postby JoDa » Tue Feb 25, 2014 12:52 am

Finally on this thought train, interestingly enough, as an independent landlord, I can offer far lower rents than the "big guys." I'd chalk that up to amenities (neither of my buildings have pools, workout rooms, or doormen), but the "big guys" also charge annual amenity fees on top of the rent, plus plus plus (extra for parking, extra for pets, extra for more occupants). My current rental and my place if I rent it do or will go for $500/month or more less than the big guy up the street, with all the same fixins inside (luxury kitchens and baths, hardwood floors, in-suite laundry, newer renovations, etc.). Sure, you have to walk an extra 5 minutes to the Metro, but that hardly seems worth $500-800 more per month for THE SAME DAMN THING.
CSP $19K
BOA $4K
UMP $11.5K
Target Visa $1.5K

JoDa
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Postby JoDa » Tue Feb 25, 2014 1:10 am

Eh, WTH on a final final thought for the night. This one might be of use to you Member. As you know I have a strong credit score, and also excellent DTI, but I did have a number of inquiries due to refinancing my mortgage just a few months ago and requesting new lines and CLIs over the last year. I've apped with 3 lenders for the new mortgage, and not a single one blinked. I got their best rates on offer with instant approval. Even the PMI is low. I'm sure I'll have to write some letters explaining all that, but those are only a minor inconvenience of a sentence or two.

And apparently my dog wanted to say "lo;p,ik" when he jumped on the keyboard...
CSP $19K
BOA $4K
UMP $11.5K
Target Visa $1.5K

MemberSince99
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Postby MemberSince99 » Tue Feb 25, 2014 6:37 am

Associations is another bad word to me. I simply will not buy anywhere you have people who wanted to be cops or in the Gestapo, with no lives and on power and control trips, telling me what I can and can't do to the property I bought to the nth degree. I've read a lot, I mean a LOT of horror stories of them spying on people more than the NSA, driving around and getting out and measuring people's grass and threatening to fine them for being 1/8" over, telling them they can't put up a temporary sign welcoming a veteran relative home and bringing legal action against them for doing it, etc. That sounds worse to me than living in the Third Reich. So I already told the real estate agent I will not under any circumstances buy anything in a HOA and subject myself to that - I might as well move to North Korea if I like that sort of thing.


That's something for everyone looking to buy to consider - do you want your neighbors running every aspect of your life and existence? Because if you buy in a HOA, they will be able to do that, and even seize your home if you fail to comply with their every whim and demand. They can't have you put to death, but after they get done with you, you might feel as if that would be merciful. Just something to be aware of and Google and do some research on what you could be getting into.

MemberSince99
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Postby MemberSince99 » Tue Feb 25, 2014 6:43 am

JoDa wrote:Eh, WTH on a final final thought for the night. This one might be of use to you Member. As you know I have a strong credit score, and also excellent DTI, but I did have a number of inquiries due to refinancing my mortgage just a few months ago and requesting new lines and CLIs over the last year. I've apped with 3 lenders for the new mortgage, and not a single one blinked. I got their best rates on offer with instant approval. Even the PMI is low. I'm sure I'll have to write some letters explaining all that, but those are only a minor inconvenience of a sentence or two.

And apparently my dog wanted to say "lo;p,ik" when he jumped on the keyboard...



That's pretty much what djrez4 said too - he had some inquiries and they didn't much seem to care since everything else is in order. I don't even really have that many any more and when I do the pre-approval it will be a handful on each report, it's mainly the new accounts I've opened, but I doubt that's going to make mortgage lenders blink, I'd think if anything it would be more likely Barclay's might not like that but hey if they don't like it they don't like it, I'm going to do business with whom I please this is not Stalin's Russia and I have the ability to choose.


Anyway good to hear that wasn't an issue. I imagine that's probably very valid. Even most (not all but most) credit card companies don't really care that much about inquiries within reason. Amex is always talked about as inquiry sensitive but I haven't seen that to be the case at all personally I think it just depends more on your profile than anything.

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Postby rhipsher » Tue Feb 25, 2014 11:40 pm

Boy could I tell you some stories about renters I've had. Get the right renters and it's wonderful. Get the wrong ones and it will turn you into an alcoholic. ;) But in my case it turned me into an azzhole and made them afraid to mess with me lol!

MemberSince99
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Postby MemberSince99 » Wed Feb 26, 2014 7:01 am

And I could tell you stories about property owners as well, having been on the other side of the equation. I've always paid in full on time never trashed the place or caused issues. In fact the place I live at now commented how I'm always early with the rent.


Anyway, it's just a given they try to keep your security deposit - that's considered part of the general loot fund apparently and they know not many will take them to court, especially given you will probably need them as references down the road. I've had them try to withhold for carpet cleaning, DESPITE the fact that this is illegal in the state of Wisconsin. (Yes it is actually illegal to keep money for carpet cleaning here so that tells you how abused that has been). But again they will do it anyway and what is going to happen to them for it? Nothing, but you can sue...if you want to destroy them as a reference for you.


So let me assure you folks it's not all a story of the innocent angelic property owners dealing with the terrorist scum of the earth renters. Far from it.



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