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Old 01-20-2012, 04:32 PM   #16
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Buying a duplex, renovating, and renting. I want your 2 cents!


Something that I learned in the last three years of renting and managing properties is that putting the effort in to call you tenants. If you call them once a month to check on this. Ask how is everything, does anything need to be fixed or is anything not working right.

This gives the tenants a chance to let you know about problems without feeling bad that something broke. It will also open up the communication so that if something goes wrong they feel ok with calling you.

One big thing though is if they do bring up a concern get it fixed as soon as possible or they will stop trusting you.

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Old 01-21-2012, 03:38 PM   #17
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my comment about centralized heating/AC has more to do with the cost of heating than anything else. Not sure how a landlord can compensate for fluctuating heating costs during the heating season...
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Old 01-23-2012, 10:38 AM   #18
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my comment about centralized heating/AC has more to do with the cost of heating than anything else. Not sure how a landlord can compensate for fluctuating heating costs during the heating season...
Why don't I just make them pay for utilities? There is a way to seperate utilities between the two halves of a duplex right? Different meters and boxes? How does this work for a central bill for heating? Do the tenants split it? Is that fair or how it is normally done?
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Old 01-23-2012, 11:23 AM   #19
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Buying a duplex, renovating, and renting. I want your 2 cents!


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I would like to get a good idea of what I am getting myself into before I purchase a property. Any and all advice is welcomed. From carpentry to selecting tenants. If you have had rental properties before how did you make out? Was it a profitable venture that you continue to do. Do you own several properties? Is one rental property a handful? Have you ever lived in a duplex with other tenants?
I've not lived in a duplex, renting out the other half. But I do have rental property.

THE single MOST important make or break factor is going to be renters. If they're good, you'll be fine. If they're bad - and many are - you will be in for an absolute NIGHTMARE. Do not, under any circumstances, think it will be a good idea to rent to "rent assisted" people. Frankly, most of them are worse than animals when it comes to taking care of a place. And most of them have worked the system long enough to know that it is almost impossible for you to evict them.

The second most important factor is whether or not you have the tools and ability to do most/all of the work necessary on a house/duplex. If you have to pay a plumber $100 per hour every time there's a little leak or a clog, you're going to go broke.

The third aspect of this type of venture is your local real estate market, zoning & ordinances, and insurance & taxes. None of us can do more than just speculate about that. Here in Omaha, there are several duplexes that I could buy for well under $100,000. I could rent one side out for $850 per month and live in the other side essentially for free. But that's my situation, not yours.

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Old 01-23-2012, 11:28 AM   #20
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THE single MOST important make or break factor is going to be renters. If they're good, you'll be fine. If they're bad - and many are - you will be in for an absolute NIGHTMARE. Do not, under any circumstances, think it will be a good idea to rent to "rent assisted" people. Frankly, most of them are worse than animals when it comes to taking care of a place. And most of them have worked the system long enough to know that it is almost impossible for you to evict them.
This seems to be a reoccurring theme from the advice I am getting from people. A few tools I have to protect myself against bad renters are
-application fees
-history with references
-one month lease agreements at first until they establish credit with me
-credit checks
-proof of income

Anything else I should be looking for?
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Old 01-23-2012, 11:53 AM   #21
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Buying a duplex, renovating, and renting. I want your 2 cents!


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Why don't I just make them pay for utilities? There is a way to seperate utilities between the two halves of a duplex right? Different meters and boxes? How does this work for a central bill for heating? Do the tenants split it? Is that fair or how it is normally done?
Usually if there is a shared heating system, the cost is added to the rent as a flat fee, and it is rented as heat included. The reason this is done is there is no fair way to split it up.

Here's a scenario:

Apartment #1: 4 person family, one of which is elderly. She likes it 78 in the winter and 60 in the summer.
Apartment #2: Single college student. Saving money, so 62 in the winter and 78 in the summer doesn't bother them.

How do you fairly split this bill?

Another option would be to fix the temp for both places so they don't have access to change it. This would be best for a fixed price too, since if in the above example you charges a fixed cost of $50/month, apt #1 would be using way more, and apt #2 would probably use it more since it was included. I know from experience that when I lived in an "All utilities Included" apartment in college, we had 5 computers on 24/7, would leave the TV and lights on, and the heat would be at 72-74 all day in the winter, and 64-66 in the summer.


Just some things to think about.
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Old 01-23-2012, 01:04 PM   #22
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I've lived in places with shared hvac. I hated having to smell other peoples cooking/smoking
Sorry Dave thats all I've got
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Old 01-23-2012, 02:54 PM   #23
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Month to month leases for only a lack of history with you may backfire. The type of person who likes the stability of a long term lease is going to be mostly likely to A) stay a long time and B) pay on time. That being said, the type of people who prefer or would be OK with a month to month tend to be a little bit more scatterbrained, and I can almost assure you you're going to need to be pounding on their door for the rent at least one month. If it were me and they had no rental history, I'd just work a security deposit surcharge (say an extra 25%-50% of the security deposit) in to the contract. This way you're catering to renters who potentially have extra cash around which usually translates into good financial habits, which in turn means you get paid on time every month. Your state however may prohibit this.
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Old 01-23-2012, 02:54 PM   #24
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I would say stay away from a one month or month to month rentals. You get better treants if they are going to sign for a year. Also you are only making money when people are living there. If you have a renter for a month and then it takes a month to rent again plus the cleaning cost of the last tenant leaving your not making any money. If they sign for a year and want to leave early your protected with their damage deposit for ending the lease early.
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Old 01-23-2012, 06:25 PM   #25
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All very good points. I can see how yearly contracts will bring better tenants.

I guess I will have to take it day by day, and if I find a house with a single HVAC unit that distributes to the whole house I will decide how I bill then. Is this a typical set up? I would imagine so. How many duplexes have separate HVAC systems? I think that would be an ideal set up, but with higher initial and maintenance costs.

I have never owned a home so I am very unfamiliar with utility costs. Maybe I could ask an old owner to see utility bills and go off of them.

How does everyone feel about smoking in rentals? I don't smoke and wouldn't want someone smoking in my apartment. Is this a big turn off for renters?
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Old 01-23-2012, 06:32 PM   #26
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All very good points. I can see how yearly contracts will bring better tenants.
One-year leases are very common. In fact, almost a given.

I guess I will have to take it day by day, and if I find a house with a single HVAC unit that distributes to the whole house I will decide how I bill then. Is this a typical set up? I would imagine so. How many duplexes have separate HVAC systems? I think that would be an ideal set up, but with higher initial and maintenance costs.
One or two HVACs per duplex is going to depend entirely on who built it, how, when, etc.

I have never owned a home so I am very unfamiliar with utility costs.
Be very careful. Don't get in over your head!

Maybe I could ask an old owner to see utility bills and go off of them.
You can call the local utility company to find out this information.

How does everyone feel about smoking in rentals? I don't smoke and wouldn't want someone smoking in my apartment. Is this a big turn off for renters?
It would be a disaster to allow smoking in your rental.
I think you're on the right track - slow and careful.
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Old 01-23-2012, 06:34 PM   #27
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There will be plenty of non smokers to choose from. Who it will be a big turn off to is the next tenant after the previous smoking tenant leaves. What a huge amount of extra work for you to get the smell out. And if you don't have separate hvac the second hand smoke that wafts into your place will drive you crazy
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Old 01-23-2012, 07:04 PM   #28
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Years ago when we were young, we bought a duplex as our first house, then another and rented first and then a third. It worked out well for us, esp the ones we lived in. When we had 5 units rented, it got to be hard since we both worked and we eventurally stopped being land lords. I tried renting out my house with a manager later and that was a disaster.

Things I learned:

Screen your tenants. Ask for previous landlords ph numbers, verify the landlord has rentals, and call them.
We never did credit checks, but it's a good idea.

The apartment in the unit we lived in was almost always problem free.

I would try to get a copy of the previous utility bills, average them and give the tenant an amt that's half the average as an allowance. If it goes over, charge them more. Otherwise, you'll find tenants in shorts in the winter.
Make the apartments no pets and no smoking. Otherwise, you'll be replacing drapes and carpet often.
Get a deposit big enough to cover hiring a cleaner if they leave it a mess.
Sometimes, you'll need to get it rented before you personally have time to clean it.
Make sure they have tenant insurance (very cheap) and that your agency knows it's used as a rental.
Being a landlord was a pain occasionally, but mostly it was pretty quiet. We benefited quite a lot financially.
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Old 01-23-2012, 07:30 PM   #29
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The payout on this question is awesome. I can't thank you guys enough for the help. First thread, and its an incredibly helpful one. Better to learn from people with first hand experience than re-invent the wheel.
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Old 01-23-2012, 08:57 PM   #30
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Quote:
Originally Posted by jimmyfloyd View Post
Usually if there is a shared heating system, the cost is added to the rent as a flat fee, and it is rented as heat included. The reason this is done is there is no fair way to split it up.

Here's a scenario:

Apartment #1: 4 person family, one of which is elderly. She likes it 78 in the winter and 60 in the summer.
Apartment #2: Single college student. Saving money, so 62 in the winter and 78 in the summer doesn't bother them.

How do you fairly split this bill?
.....
Just some things to think about.
That's what was getting at. And if the cost of heating goes through the roof,...you're stuck paying the difference. Can't exactly shut the heat off on the tenants, or change the lease on them.

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