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People don't just declare bankruptcy when they don't want to pay a months rent' It has expenses and ramifications for years. I think your attorney gave you bad advice.
It was on a tenant that he (seemingly) was trying to get out of the unit. And in NYC the concern was that she'd get another month in the unit as a result of the BK.
So no, they aren't going to declare BK over a months rent but at some point when judgements are being issued and wages garnished or accounts liened, its a natural step.
People don't just declare bankruptcy when they don't want to pay a months rent' It has expenses and ramifications for years. I think your attorney gave you bad advice.
You really do like to comment on things you have no facts on ..where did I say she is going to declare bankruptcy over a months rent ?
It took9 months from first missed rent check to final court date plus there was 6k in damages .
She was a great tenant until she got divorced and her husband just left her high and dry she could no longer keep up with rent .
So yes she was going to declare bankruptcy if we tried tocollect and the courts have been known to give women with a kid an extra month on your dime to get things together
It was on a tenant that he (seemingly) was trying to get out of the unit. And in NYC the concern was that she'd get another month in the unit as a result of the BK.
So no, they aren't going to declare BK over a months rent but at some point when judgements are being issued and wages garnished or accounts liened, its a natural step.
Sounds like you have had bad experience with PM. That has not been my experience.
It's important before you select a PM firm, you do your homework. The worst thing you can do is select a Realtor that dabble as a PM. My PM firm is a "professionally managed" firm. They have different departments and have assigned Project Managers to handle your property. Any issues I can not resolve with the Proj Mgr I can always contact the owner and he goes out of his ways to make sure it's resolved to my satisfaction.
50% rent for operating cost is VERY high. Again, this has not been my experience.
It sounds like you really have a doozie for a rental and a PM.
I went through 6-7 pm companies over a 23 year period. When I had one rental it wasn't noticeable but as I accumulated more (eight total) I realized the same problems were happening again and again. It boils down to this: even with 30 units it's impossible for PM to properly keep tabs on tenants and repairs. Today if there's a problem I go to the property. Renters know the owner is watching. With PM tenants usually fill out a request form and send a photo. Whatever the renter says is wrong and the severity of the problem is taken at face value. And once renters realize nobody from PM is stopping by to check the problem they can say anything. Toilet is clogged, the dishwasher breaks... Hey, I didn't do it.
Repair costs: The PM contacts a local vendor who sends out a "tech" and the owner usually assumes this person is experienced but that's not always the case. When you manage dozens if not a hundred or more properties a PM will often farmed out the work to companies which can get someone out immediately. On the other hand I often have to make several calls before I can find someone available. But the person I send out I know for a fact has experience and is good. A PM company calls in a plumber and you're told this, this and this needs to be done. Maybe its true or maybe this "tech" isn't particularly experienced or good. (I found this is esp. true with AC vendors.) What's important is the vendor is licensed and the PM is legally covered. If someone has to return and address the same issue at a later date... tough. You're told something else went wrong. Translated this means you will pay again. Who really cares? The renters just want the problem solved and the PM wants to close out the work order. So, Mr. Property Owner while it does appear the same problem the "tech" said it's actually a separate issue. Please see attachments for a copy of the work order and bill.
The OP mentions $400 a month or $4800 a year. Yes, 50% set aside as operating cost is high but $400 is nothing esp. when using a PM company. All it takes is one or two repairs and there goes at least 25% of the yearly income.
Last but not least screening of renters. A PM company will run a background check the same as I do. But often a PM lets leasing agents show the property to potential renters. Yet, a leasing agent is usually paid on commission. The more properties they rent the more they earn. They'll tell potential applicants whatever they want to hear to get them to take the unit or house. And the PM might never meet the people. . As the owner I meet applicants when they visit the property which ensures there are no misunderstandings..
I quit my job and moved to AZ in order to manage my properties myself. I've cut operating costs by half. All said and done I found it more stressful dealing with PM than with renters. I'll never use PM again. If I have to leave AZ I'll sell.
LOL only a real landlord knows about tolerance for the worst in humanity.
I've had a tenant that left the place full of dog poop and pee. Like a solid layer of dog poop on the floor in their own bedroom with an outline of where the mattress was. At first, I thought they just left the place like that to "stick it up to the man". But my plumber swore up and down that the couple times he went there to fix clogs it was like that. They literally lived in that condition.
wow. But thats what the deposit is for? Did you interview them yourself before they moved in? And they seemed like decent people?
I charge one month rent deposit and $500 refundable pet fee. And if those $3,700 don't cover the damage, I will sue them.
Well, I look at my applicants very carefully and show the condo myself. Thats one reason I do not like property management companies. I choose tenants myself. I ask lots of questions. People are often times dumb, they talk too much. I had applicants show up with a little child and I asked some questions and they got too comfortable and told me the child trashed some furniture at their current place. Well ... you are not gonna trash my place!! I rented to an engineer who is never home and earns $$$$ instead.
I also do background checks.
My first tenants was a young doctors couple with a shepard dog. No issues. My second one is an engineer with a little dog who goes to work with him.
Would the rental tax write off benefit you, if you are high income, it may help. Are you in a area with good property appreciation? Do you already own your own home? What would you do with the money if you sell it? If you are just going to squander the money on frivolous things, I would hold onto the condo. If you are going to put it ($$) into your own family home or invest it, then go for it. Lots of things to consider.
Meh , tax write offs are like spending 4 bucks to win a one dollar prize…from a tax standpoint ditch the expense and you are ahead of the write off usually
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