The Landlord Thread

[snapdragon]

Mar 16, 2021 11:25:43 GMT -5 snapdragon said:

Mar 14, 2021 10:33:51 GMT -5 buystoys said:

We still have our good tenants.  I've been thinking about increasing the rent by $25 per month, but haven't made a decision on that yet.  We still make a nice profit, I'd just like to keep up with the rents in the area a little better.  Housing is difficult to find right now.  Our new neighbors took their house even though it wasn't what they wanted.  They had lost four houses already and needed to have somewhere to live.  Rents have gone up the past two years, but we've kept ours the same.  I don't think they'd move out over $25 per month, but I also don't want to risk it. 

Just rambling here.....  I'll eventually make up my mind.

Remember you also have increasing property taxes that never seem to go down. So a extra $20 or $25 is very reasonable. The money can be added to your maintance accounts in case something goes out or there is damage. 

Heck the HOA at my condo is $387/mo. and I expect the amount to go up here really soon. 

We had our annual HOA meeting earlier this week and I am surprised to say that dues are staying the same and not increasing. But that still does not mean that it won't increase this year. Just not now. I know that our utilities have increased by a min of 7% and any construction costs are up over 170% that they were before the pandemic. I got these directly from people in the industries so it's not just a rumor.

[buystoys]

We decided to increase the rent by $25 per month.  Housing is getting harder to find here and we have a nice 3/2 mobile home on almost an acre.  It's nice and clean and we keep the yard mowed.  Taxes and insurance went up quite a bit last year.  We would make a profit without the increase, but I just don't want to get too far behind the market on rent.  DH looks at them on Facebook all the time and we see a lot of places that aren't as nice as ours going for more.  Sometimes it's a lot more.  We're familiar with the areas and some of the rents surprise me.  But people must be getting it because they go off the market.

[nidena]

When you're deciding on a property to buy for a rental, what sort of formula do you use to determine if it's worth it?

I was talking to someone last night who said they take the annual expected rent x 8 years and if that is less than what it costs to buy/mortgage the place, it's worth it.

I did do online searching for this info but I still didn't understand what I was reading.

In any case, the guy was floored when I stated I'm not looking to get into the rental arena to make buckets of money.  I just want to provide affordable rentals (and not get myself in a hole that can't be gotten out of i.e. I don't want to be a position like so many landlords were last year where they couldn't pay the rental mortgage because they were relying on the tenants rent to cover that cost).

[CCL]

What do you mean by buy/mortgage the place? Are you talking about the sales price + any needed repairs? Or do you mean the minimum amount of cash you have to actually come up with to get into it?

[nidena]

Aug 20, 2021 17:20:10 GMT -5 CCL said:

What do you mean by buy/mortgage the place? Are you talking about the sales price + any needed repairs? Or do you mean the minimum amount of cash you have to actually come up with to get into it?

Just go with the original question:

When you're deciding on a property to buy for a rental, what sort of formula do you use to determine if it's worth it?

[resolution]

After 11 years occupancy, my long term tenants have moved out. In January they requested to go month to month, as they had bought land and were building a home, and they moved out at the end of September. They were good tenants and I hadn't wanted to push them out of the home, so I had just left the rent the same and it had fallen quite a bit under market. I had been charging them $1000 per month and over the years it had gotten a few hundred under market, but the last two years the rental rates have jumped up at an accelerated pace.

The house was vacant for a month, and now I have new tenants that are paying slightly over $1800 per month.  I am not sure how this is sustainable. This is a modest starter home in a decent phoenix suburb, but it is like a 45 minute commute to downtown where the better jobs are. I would never consider paying that much to live there.

[Miss Tequila]

Nov 16, 2021 9:27:40 GMT -5 resolution said:

After 11 years occupancy, my long term tenants have moved out. In January they requested to go month to month, as they had bought land and were building a home, and they moved out at the end of September. They were good tenants and I hadn't wanted to push them out of the home, so I had just left the rent the same and it had fallen quite a bit under market. I had been charging them $1000 per month and over the years it had gotten a few hundred under market, but the last two years the rental rates have jumped up at an accelerated pace.

The house was vacant for a month, and now I have new tenants that are paying slightly over $1800 per month.  I am not sure how this is sustainable. This is a modest starter home in a decent phoenix suburb, but it is like a 45 minute commute to downtown where the better jobs are. I would never consider paying that much to live there.

I’m seeing the same thing here. We just re-rented a 3 bedroom half-double. Last year the rent was $875 and this year it is $1,075. The rent on every vacancy has gone up a minimum of 20% over last year. My units were not under market last year.

This is good for me but it is really pushing out a lot of people

[buystoys]

We decided we'd rather have good tenants than change to more rent.  We did give them a $25 per month increase this year, but we could have gone much higher.  Housing in our area has just exploded.  Again.  It did this right after we moved here, then slowed down for a few years, and now is going gangbusters again.  People who work in Dallas are moving here and dealing with the commute, at least two manufacturies in town have increased their staff significantly, and there are a lot of businesses within a thirty minute drive that have open jobs posted.  This all began before the pandemic and it seems as though WFH has helped a lot of people move away from the rat race a bit.

I think we won't increase the rent next year.  I'd still rather have the good tenants than a few extra bucks every month. 

[Bonny]

Nov 16, 2021 9:27:40 GMT -5 resolution said:

After 11 years occupancy, my long term tenants have moved out. In January they requested to go month to month, as they had bought land and were building a home, and they moved out at the end of September. They were good tenants and I hadn't wanted to push them out of the home, so I had just left the rent the same and it had fallen quite a bit under market. I had been charging them $1000 per month and over the years it had gotten a few hundred under market, but the last two years the rental rates have jumped up at an accelerated pace.

The house was vacant for a month, and now I have new tenants that are paying slightly over $1800 per month.  I am not sure how this is sustainable. This is a modest starter home in a decent phoenix suburb, but it is like a 45 minute commute to downtown where the better jobs are. I would never consider paying that much to live there.

It's those d*mn Californians!   At least that's what my friends tell me.

We were shocked that the lot across the street from our AZ house sold last Tuesday for about $630k.
This is zoned SFR and is 1.7ac in a nice area but still...We're in AZ for the month and met the buyers. Thankfully they are planning to build a 4,000' single level home. I bet it will be $2M when it's done.

[TheOtherMe]

It's the crazy rent that keeps me living in a state where I don't want to live.