Archive for the ‘rental house protection’ Category

Required Roof Maintenance for Fixer Upper Houses

Monday, July 2nd, 2012

One of the jobs associated with operating a fixer upper and rental house business is to keep your rental properties in ship shape!

With the annual approach of summer rains, now is almost the last chance to make rental house roofs water proof before the watery onslaught. As someone who has a sworn aversion for arriving too early to parties, I subscribe to the time-tested philosophy of “better late than never.”

This morning I applied some black roofing cement on some areas on one of my townhouse roofs. I had located some cracks upon my inspection of it about 2 weeks ago.

The first photo shows the area in question, where I had previously applied a small amount of plastic roofing cement, but today I was going to put on some more and cover a broader area.

Before picture

The second photo shows the application of the plastic roofing cement. We apply one layer of cement, then put a white membrane on top of that, followed by a second layer of cement. The membrane allows for more cement to be applied.

Application of roofing cement

Below is the “after” photo. You can see that in addition to the corner, we hit a few other cracks with our roofing cement on the sides of theroof. Later, we’ll come back with white roofing paint to cover the black cement.

Completed repair

A good rental house

My wife and I purchased this 2 bed 2 bath townhouse in 1993 and lived in it for 10 years before moving on to a bigger house (to accomodate our growing family), and turning this property into a rental house in 2003.

Its been one of our best rental houses because it is in a “transition” zone (aka “opportunity zones”) where there is heavy demand for housing, and it is easy to care for because it is compact (1100 sq ft with small front and back yards). The townhouse perfect for single people or small families.

We originally purchased it for $53,000 and we charge $750/month (more if the tenants have pets).

Related Posts

Remove that Garbarge Disposal Now!

LLCs vs insurance for protecting rental properties, redeux

Sunday, October 10th, 2010

I’m opening up the old mailbag and sharing a message that I recently received about operating a rental house business, and my response.

Hi Terry,

Thanks for writing those books – really enjoyed – and found your, ‘Never Sell Your House Book’, especially interesting and helpful.
We’re on our way to buying a new home (got a great deal on a home in a good area w/ a great interest rate ~4.4% w/ no points…), and we hope to rent our existing house out, as you suggest.
Rental comps in the area are ~$1,300/month, which would cover the new PITI…although, in my humble opinion, $1,300/month seems high – I can’t imagine people would spend that to rent…. but I guess they do. I think I would take less for low-maintenance renters.
I like your lease agreement forms in the Appendices.
Q: Would you suggest setting up the rental property as an LLC in order to CYA?
Jay Carson
Dear Jay,

Congratulations on the purchase of the new house. It’s good to hear that you were able to follow my advice and turn your old house into a rental instead of selling it.

In answer to your question on LLCs. Generally, LLCs do not provide an impenetrable  protective shield against lawsuits, contrary to those who  sell and over promote the benefits of these products.

It’s  like hiring Gary Coleman to be your bodyguard. You might have some protection from an assault, but probably not enough.

The best protection against lawsuits is a good insurance policy. If you have a good insurance policy and you are sued, your insurance company should defend you and pay for the damages if you lose the case.

(For a more comlete discussion of this topic see the earlier blog  article, Protecting Rental Properties: LLC vs. Insurance by lawyer  John Gravina.)

If you have any other questions, feel free to contact me again!

Best regards,
If anyone else would like send me with questions or comments, feel free to use the Contact Form on the “About Me” page of this blog.

LLCs and Protection for Rental Properties

Wednesday, April 30th, 2008

This article is in response to a comment on my last blog article.

I don‘t have my properties in an Limited Liability Company (LLC).

The issue is that unless you own your rental properties outright (that is, you still have a mortgage on it), you must get the consent of your lender to transfer the title from your name into an LLC without triggering the “due on sale” clause in your mortgage. A “due on sale” clause in a mortgage states that upon the sale or transfer of interest in the real estate the lender has the option of calling the loan due. If they called the loan, you would have to pay back the loan in full.

So, in general, LLCs are not an option for people like me who have mortgages on their rental properties.

For rental properties, I recommend a three track approach to protect yourself from lawsuits.

1.) The first layer of protection should be an insurance policy that protects your assets if someone sues you. If someone trips on a rug in one of your rental properties, and decides to try and hold you liable, your insurance company should defend you in court. If they don’t, you sue the insurance company. I have the standard $300,000 protection on each of my rental houses. Some people keep a $1 million umbrella policy. You will have to decide how much protection you need.

2. Second, provide a safe living environment for my tenants. I make sure everything works properly (toilets, ovens, coolers, etc.) and I remove hazards as quickly as I can (low hanging branches, electrical short circuits, etc.). If I get a call from a tenant for a legitimate repair I try to respond as quickly as possible. Usually that means sending my handyman over to make the repair.

3. Third, keep a low profile and take precautions when doing business with the public. You should have tenants mail monthly rental checks to a post office box instead of to your home residence. Have your phone number unlisted and use a pay-as-you-go cell phone. Because you own real estate, some people may view you as wealthy target, so look for ways to lower profile your profile.

I take the advice of J.J. Luna in his book How to Be Invisible when he says, “do not, as long as you live, ever again allow your real name to be coupled with your home address.”

Get Your Windshield Wipers Fixed Before it Rains

As a landlord, there are times when you have to make difficult decisions. Once I had to call the cops to remove a former tenant from one of my rental houses. I know, it never made sense to me either.

Had my personal information been commonly knowledge, the tenant could have tried to track me down to even the score. I didn’t have to worry about it since he never had that info, and it would take a lot of digging to find it. They may look for me, buy I’m not going to make it easy for them to find me.

Of course, that example is the exception. Most tenants are reasonable people. But, for the infrequent bad apple, we should have our defensive obstacles already in position before we need them.

Info on Terry’s Book

Add to Technorati Favorites

Subscribe in a reader

Share this: | Digg | Ma.gnolia | Reddit | Stumble Upon |

How to Learn the Skills to Repair Houses, part 2

Wednesday, September 26th, 2007

This of Part 2 of my reponse to a question asking, “My background is not in the building trades. How do I learn the required skills to start a business in repairing houses and renting them out?”

How to learn the appropriate skills:

3. Draw on the Past

After I got more involved in the repair work of our houses, I thought back about how my father had taught me a lot by example. I recall seeing him construct screened-in porches on various houses that we had lived in. I was too young to help out much at the time, or to appreciate what he was doing, but looking back I realize that it required a strong desire to learn the basic principals, and a sense of self-confidence to build it. He had no formal training in construction, and didn’t have reference books like I do, but he learned by observing other porches that had been built in the neighborhood.

I also have a friend who has made a career out of living frugally. He does virtually all of his own house repair and car repair work. If he gets stuck, he goes to the library and finds books to help him. It helps that he has a background in teaching vocational eduction. We have helped each other with house repair projects over the years, and he is a source of practical advice when I need help.
You too may have family members, or friends, that you can draw insight and inspiration from when it comes to making repairs.

4.Create a House Repair Library

I like to scour the fix-up book areas at used book stores for good buys. I buy a book as soon as I see it if I know that it has valuable information. In the past, I have waited to purchase the book only to return later and find that the book I had wanted was gone. The price you pay will literally be a drop in the bucket compared to the money you will save. I have books on almost every possible repair topic, including electrical wiring, plumbing, flooring, you name it. Some books that offer information on a wide variety of repairs, such as Reader’ Digest “Fix-it Yourself Manual” and Better Home and Gardens Complete Guide to Home Repair,” are also good to have. See my earlier blog for more infomation on recommended repair books.

When a book is not enough, I can usually get good advice on specific jobs at hardware stores, like Ace Hardware. And, you can sometimes get advice on difficult repairs by doing a Google search.

Add to Technorati Favorites

Subscribe in a reader

Share this: | Digg | Ma.gnolia | Reddit | Stumble Upon |