Gilbert tips/tricks?

[ScottsdaleMark]

Originally Posted by asufan

If you're renting out properties, you cannot discriminate against families and only rent to singles. Fair Housing 101.

Obviously. Where did anyone talk about discriminating?

[asufan]

Originally Posted by ScottsdaleMark

Obviously. Where did anyone talk about discriminating?

You were talking about things to avoid such as pools, grass, carpet and pets. At the end you brought up children as if that's something also to avoid. Just clarifying that can't be a reason to turn someone away in case there was any confusion.

[jamies]

First, do you want cash flow or appreciation? What will a $300K home rent for vs say three $100K homes in lower end areas. "C: or "D" class properties are more hands on. But all you need is ONE bad tenant to wreck $20,000 damages in a $300K home. Vs lower end where $5K is pretty bad damages.

Will a $300K home appreciate faster than the stock market? Or faster than a $100K home? Is it safer? What is your exit plan? Will you be able to sell it on demand? Can you sell three $100K homes easier than one $300K home? - That will be neighborhood dependent. These are all things you need to consider.

Do you have the ability to deal with issues. Tenants in $300K homes are usually pickier than those in tenements. Those in "D" areas often have law and drug issues, or nearby properties do. As someone said, do you have the ability to deal with the people you are renting to or the neighborhood. I don't.

For $300K you could probably buy a six plex. One $300K home rents for say $1,200-$1,800 a month. SIX one bedroom apartments rent for $450 each or $2,600 a month.

The nice thing about multi family is all your problems are under one roof. The bad thing is... all your problems are under ONE roof! Sigh.

I second the notion that children and pets are both things to avoid. Some children are 40 years old BTW. And YOU get to babysit them!

If you buy in a 55 plus community then kids are limited by law. But usually seniors don't rent $300K houses. I like senior housing for that reason.

2 bdrms are easier to deal with than three, because they can stuff less people in. You will still have families of 6 wanting to rent a 2 bedroom. With a 3 bdrm it will be double families of 6 to 10. Seriously.

Screen, screen, screen.

There's more to it than just buying a property and putting up a sign. But good luck.

Signed,
Scrooge the Evil Greedy Slumlord.

[PhoenixSomeday]

Originally Posted by asufan

You were talking about things to avoid such as pools, grass, carpet and pets. At the end you brought up children as if that's something also to avoid. Just clarifying that can't be a reason to turn someone away in case there was any confusion.

Laws like that are great in theory but are, frustratingly, too easy for landlords to get around. "Oh, I decided to rent to this other tenant because [some valid and legal reason]." It may be true on a technical basis, but not the real reason the landlord chose them. Good luck to the turned-down prospective tenant in proving it. Exact same thing with hiring/firing.

Speaking of Gilbert rentals, there are a lot of SFHs east of Higley and about a mile north and south of Germann that seem to be disproportionately cheaper compared to most of the rest of that region of Gilbert, yet the homes and neighborhoods don't really seem that much different. What's the story there? Unless I'm just imagining it.

[asufan]

Originally Posted by PhoenixSomeday

Laws like that are great in theory but are, frustratingly, too easy for landlords to get around. "Oh, I decided to rent to this other tenant because [some valid and legal reason]." It may be true on a technical basis, but not the real reason the landlord chose them. Good luck to the turned-down prospective tenant in proving it. Exact same thing with hiring/firing.

Speaking of Gilbert rentals, there are a lot of SFHs east of Higley and about a mile north and south of Germann that seem to be disproportionately cheaper compared to most of the rest of that region of Gilbert, yet the homes and neighborhoods don't really seem that much different. What's the story there? Unless I'm just imagining it.

Well, I take tenants on a first come first served basis. If their credit and income and references/rental history are there and they are willing to pay what I have it offered for, I feel I have no valid reason to turn them down. I'm not sure if there's a way around that legally, unless I had someone else offer at the exact same time. I don't want to leave myself open to a complaint so I like to work with one at a time.

To answer your other question, that area has very small lot size properties and likely has airplane noise from Gateway, that's all I can think of that would be a negative.

[ScottsdaleMark]

Originally Posted by asufan

You were talking about things to avoid such as pools, grass, carpet and pets. At the end you brought up children as if that's something also to avoid. Just clarifying that can't be a reason to turn someone away in case there was any confusion.

I apologize for the confusion. I was just trying to say different types of tenants cause different issues for landlords, e.g. pet owners, families, etc., although there are plenty of people who defy generalizations.

My point that I was trying to get at with my commentary with pets is that even if you do try to screen out certain things that you are legally allowed to screen out -- e.g. pets -- you often end up with them anyway. So for me personally I look at credit score and amount of income, e.g. can they pay the rent reliably. There's a lot that's out of your hands and left up to chance and that's why it can be such a frustrating enterprise. You just never know.

I think Phoenix Someday is right that one probably could get away with discriminating if they're willing to lie about their motives, but I do not like to lie and I try to follow all relevant laws and rules as I'm supposed to. I read that Seattle requires apartment complexes to set their rental criteria and post it publicly so applicants know ahead of time if they're going to get a unit or not based on their income and credit, etc.

Jamies also has a good point in that you might make more money with more, lower-quality housing units than fewer, higher-quality housing units, but it's also more work. If a house is cheaper, it's often older, in worse condition and will require more maintenance, etc., and there can be issues finding tenants who qualify on income and/or credit. The X factor there is, your low-quality properties may not appreciate in value as quickly as higher-quality properties, but a lot of that also depends on what sort of RE market you're located in.

Edit -- there has been, and continues to be, a dearth of affordably-priced homes for sale in Phoenix metro, e.g. starter homes, which I do think makes rentals more valuable and has contributed to the rents rising as much as they have. I guess it's the result of continued population growth plus years of no new home-building once the Recession hit. I assume eventually demand will catch up to supply and then we'll all start to get nervous about over-supply at that point. :-)

[WSPHXPELON]

Thanks to everyone who replied, you all left some great comments!

I was curious about one more thing, anybody have some opinions on this?

Do you think it would be advantageous for a Gilbert rental property to have easy access to the 60, or the 202, or somewhere between both freeways? I have seen a lot of Gilbert properties that are south of the 202, do you think a lot of renters may be turned off by this because it would make for a longer commute? Any opinions on this welcomed, thanks again.

[Minntoaz]

Originally Posted by ScottsdaleMark

I apologize for the confusion. I was just trying to say different types of tenants cause different issues for landlords, e.g. pet owners, families, etc., although there are plenty of people who defy generalizations.

My point that I was trying to get at with my commentary with pets is that even if you do try to screen out certain things that you are legally allowed to screen out -- e.g. pets -- you often end up with them anyway. So for me personally I look at credit score and amount of income, e.g. can they pay the rent reliably. There's a lot that's out of your hands and left up to chance and that's why it can be such a frustrating enterprise. You just never know.

I think Phoenix Someday is right that one probably could get away with discriminating if they're willing to lie about their motives, but I do not like to lie and I try to follow all relevant laws and rules as I'm supposed to. I read that Seattle requires apartment complexes to set their rental criteria and post it publicly so applicants know ahead of time if they're going to get a unit or not based on their income and credit, etc.

Jamies also has a good point in that you might make more money with more, lower-quality housing units than fewer, higher-quality housing units, but it's also more work. If a house is cheaper, it's often older, in worse condition and will require more maintenance, etc., and there can be issues finding tenants who qualify on income and/or credit. The X factor there is, your low-quality properties may not appreciate in value as quickly as higher-quality properties, but a lot of that also depends on what sort of RE market you're located in.

Edit -- there has been, and continues to be, a dearth of affordably-priced homes for sale in Phoenix metro, e.g. starter homes, which I do think makes rentals more valuable and has contributed to the rents rising as much as they have. I guess it's the result of continued population growth plus years of no new home-building once the Recession hit. I assume eventually demand will catch up to supply and then we'll all start to get nervous about over-supply at that point. :-)

Yep that's all we did. Looked at credit score, income, and called past landlord. We have yet to regret our decision. It may take a little longer to find that sort of renter but it'll be way harder to evict a faulty tenant. Also we are all for animals! Usually people that can take care of animals have enough responsibility to continue paying their bills. We have a golden retriever ourselves and would never have him in a place that was yucky.