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Hey FOD, thanks...was a bit too conservative looking back 12 months ago as all this talk of phantom inventory hitting the market made me lose out on some really great deals by not throwing out my highest and best, scared the market would see a flood of property and see a price drop...so after waiting and waiting and looking at that $250,000 cash pile up gaining that 0.25% I went out with stronger offers..unfortunately, 1 bedrooms are now going for the price of 2 bedrooms. =( Still the ROI is there, so I'm fine...just hope they rent quick. Have a nice week.
Yes, folks really over thought this market at least at the low end. I am not sure you can over think the high end as it is just a mess and could easily get worse. The good news is you still have the money and did not blow it on red or black....
One more suggestion for those looking to be investors and rent your places. NEVER under invest in your property. Meaning include a clean refrigerator, make sure the stove is newer and very clean, make sure the place has fresh paint on the interior, make sure the floors are not cracked, dirty or torn up. Make sure the oven is clean. The oven does not have to be new but it must be spotless. You want the wife or cook in the house to be comfortable. I get a higher rent than my neighbors because I give the appearance of a nicer place with less head aches for the new tenant. As soon as I buy the place, and I will be doing it again this week, I make sure the roof is good, all the floors are in great shape, I put in a newer refrigerator and Stove (Slightly used costs about 500 Dollars for the pair, delivered and installed, if you know where to look), Paint and clean spotlessly the kitchens, Spruce up the cabinets or if they are on their last legs, replace with Home Depot, Lowes or ??? new cabinets, sinks, toilet, etc. The extra expense was already allowed for in the purchase price so do not cheap out and try to make do with lousy boxes or fixtures. Since these properties are relatively close to the beach most of the time the temperature is not too blazing hot but I put in inexpensive ceiling fans as most of these units do not have A/C. The tenants really appreciate it and it only costs less than 80 dollars per fan fully installed. I generally put in about 5 - 10 thousand for my fixer uppers with that number a bit higher or lower depending on condition. My places are already rented when I close escrow due to word of mouth of all of my tenants put out to their friends so as soon as I am done with the up grades the tenant is ready to move in.
My property manager is instructed to fix anything that goes wrong quickly, alternately using handy men we have cultivated over these last many years. I am an owner builder and as such can have my property manager pull permits on my behalf if required or oversee any job, big or small. I am fortunate that my property manager not only does my properties by also all the friends, family and clients associated with one heck of a lot of these units. Our operation runs pretty much seamlessly though of course there are always a few hiccups along the way. He provides an incredible service to us and we provide a nice living to him. As always, I pay every one who works for me immediately upon being invoiced and upon verification the service was performed correctly.
Because I provide a better "Home" than the neighbors I find I am never without a tenant waiting in the wings. All of these properties have almost zero turnover and when they do they only sit long enough for a fresh sprucing up and then the new tenants are moving in. I realized long ago if a property sits even for one month while I try to get 5 or 10% more on rent, I have already lost more than I have gained yet because my properties are so clean I still am getting top dollar in rent. Because I am super happy with my ROI, I have not raised rents on any of these properties in years. Again, customer service always comes back smiling at you. I have always been in this for the long haul and thus fix my properties accordingly. I want the fewest problems throughout the year.
I have always preached customer service in any business. To my it is one of the cheapest and most productive items any owner can provide. Hey, you are going to have to fix that light bulb, patch that roof, fix that leak or ??? At some point so why not do it right away and make the tenant happy. Better yet make sure the home is ready to move in and your will not have much to do throughout the year.
One cheap idea is If you have a single lady renting one of your places offer to put in motion detector lights in the walk ways at no charge. You would be amazed at how much that one little customer service is worth to make the tenant feel safer. Home depot is our friend and these little items do not really add up to much cost but the return on these small investments is fantastic in longevity of renters.
As a note, I make sure I have the proper insurance for liability and damage. I am very familiar with my policies and should the need arise to make a claim I know what I am entitled to. Since I am in Cali. I also have earthquake insurance on all the properties. Since I understand the ins and outs of this policy as well the claims have more than paid for any premiums I have paid over the years. Pre Planning is the key to great results.
Anyway, glad to hear you are jumping in. The water is great.
Best of luck
FOD
Last edited by fishordie; 11-12-2012 at 10:00 PM..
You have a very tenant friendly attitude. A lot of my investor friends who are renting pretty much remove any "nice-ates" (not a word) which won't generate additional rent. Things like ceiling fans, which can break, wobble, be noisy, etc. some landlords will remove since they generate no extra rent, but can generate additional hassle/calls/repairs. Same thing with a motion detector light. Not to say either way is wrong or right, just different.
I definitely agree with fixing items as soon as possible. Deferred maintenance is just that. You can pay the piper now or later.
Quote:
Originally Posted by fishordie
Yo AAR,
Yes, folks really over thought this market at least at the low end. I am not sure you can over think the high end as it is just a mess and could easily get worse. The good news is you still have the money and did not blow it on red or black....
Checked out some of the new home communities in Henderson along Horizon Ridge near I-215 today.
They had decent foot traffic while we were there.
The Lennar homes just west of Gibson on Horizon Ridge were priced around $380k for 3600sf and the lady told me they were pretty much sold out. They only had like 5 lots not under contract and those 5 lots already had some form of deposit on them, but apparently they could fall out, since the price isn't actually set until the lots are released to construction.
Couldn't agree more with providing good customer service and maintaining the looks of a place and it's appliances. My tenant's AC went out on a 100 degree day this summer and being new and not having a go-to-guy yet I had to comb craigslist...found a company...guy pretty much charged me $400 to do about 10 minutes work; diagnosed the problem, had to cut a line and take water out...I could have balked when he quoted me the amount with my tenant sitting there sweating and called around (that's what I would have done if it were my own place) but I wanted to get it done on the spot so she'd see I'm here to care about her comfort, not here to save a penny as she is a good tenant and always pays on time and in cash =)
I am also taking the approach of not advertising at top dollar, but rather $25 under current listings in this area...would rather have a bunch of calls and get a really good tenant who has a steady income. $25 x 12 months = $300...that's less than 2 weeks worth of rent in a whole year if I poke around trying to get a higher rental price. If the place is vacant for 2 weeks, you might as well have charged the $25 less from the very start...and hopefully you get a to choose from a few people and end up with a good tenant/ no headaches.
Yes, no red or black, FOD....been here 18 months and haven't put a nickel on the table...lost $180k in the stock market, took my net worth down to zero and had to start all over. I was enjoying myself too much back then, being young with a nest egg (too many vacations)...I guess losing it all pushed me to start this current business that's done well.
So where can you get a fridge and stove delivered and installed for $500 total? I've seen stuff on craigslist, but usually you have to take care of delivery and installation yourself.
...I find I am never without a tenant waiting in the wings. All of these properties have almost zero turnover and when they do they only sit long enough for a fresh sprucing up and then the new tenants are moving in. ...
You sound like a great landlord from a tenant's perspective. Just out of curiosity, have you had any issues with your rental units being trashed? After all, as a landlord you are turning over the keys to an asset worth north of $100K to someone who, at the end of the day, you don’t really know if they will just get pi$$ed for some reason and trash it (“…it’s just a rental” attitude).
Yo S and M.... Hmmm nothing intended by that...LOL,
Yes, I had one property I rented to a then member of the armed services. He came back from Iraq and was just never the same. My property manager responded to a call from the neighbors about a bunch of noise coming from the home. When my P.M. went in the house he found it trashed. He sent me a picture of one of the walls with a perfect cut out of a body going thru it sort of like you see in a comic strip. I do not allow dogs but apparently that did not matter as their dogs had done some damage. Luckily not as much damage as the humans but some.
This is why I say to make sure you have proper insurance for a rental. Because I understand my policies I knew I had a policy where I was covered for human created damage and not for the animal caused issues. I made sure my contractors could show the adjuster if there was any human element to the damage, even if there was additional dog damage, my policy must cover the replacement. Additionally, my policy had a lost rent portion which kicked in until the damage was repaired which took 3 months. Interestingly enough, though the tenant, who was under the influence and was kicked out of the service a few months earlier, moved out without a fuss had I not been able to get in there to do the repairs, insurance would have continued paying the rent should the guy fail to pay until he left and I could finish the repairs. In the end this turned out to be a huge forward fumble as everything was replaced new for old, my deductible was more than made up for in payouts from the insurance company and of course the place was rented as soon as the repairs were done. So far this is the only major problem I have had in all these years. Of course there are minor irritations but a good property manager takes care of 99% of them.
As in all things big and small, preparation is the key to success. Even with an event such as I noted above there was certainly plenty of icing on an already delicious cake. Owning properly priced rentals purchased in the last 4 years has been just a slice of heaven. Owning rentals for decades has always been good for this investor but nothing like this.
FOD
Quote:
Originally Posted by SportyandMisty
You sound like a great landlord from a tenant's perspective. Just out of curiosity, have you had any issues with your rental units being trashed? After all, as a landlord you are turning over the keys to an asset worth north of $100K to someone who, at the end of the day, you don’t really know if they will just get pi$$ed for some reason and trash it (“…it’s just a rental” attitude).
My cousins that lives near Aliante area just put their house up for sale.(short sale). This was on Tuesday. Wednesday morning there was a cash offer. Wednesday evening there were 11 cash offers.
No pictures on the MLS.
No open house.
Not one single person has seen the house in person.
The home does not even show up for sale on Zillow, Trulia, Or Realtor. It is just on the MLS with incomplete data. The home was not suppose to be fully active till this Friday.
Investors are like wild starving animals out there. To the people looking for a primary residence to raise a family with a pre approval letter, good luck.
It seems the standard investor MO currently is 1) make offer prior to looking at house, expect it needs paint and carpet 2) if offer gets accepted, view house, if not acceptable, cancel.
Quote:
Originally Posted by von949
How about this?
My cousins that lives near Aliante area just put their house up for sale.(short sale). This was on Tuesday. Wednesday morning there was a cash offer. Wednesday evening there were 11 cash offers.
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Darn
