Archive for the ‘repairing rental houses’ Category

Increase profits by improving your rental property

Saturday, July 9th, 2011

I’d like to share with you an email that received from an insightful real estate investor who, I think, uses a great way to increase his rental profits.

Hi Terry;

I have been the landlord of a triplex for just over 5 years. For most of that time, I simply maintained the property that I owned after making a couple of bigger renovations (windows and insulation). The biggest challenge I had was that my existing tenants paid way below market rent and rent control would not allow me to increase rents beyond 0.7%-2.2% each year. I felt stuck.

Recently, one of those tenants moved out. I managed to gut and redo the one bedroom unit and once it was finished I rented it out for almost double what I was getting before! This took the pressure off quite a bit but I realized I had to get my other “long term” renter out of her apartment. I ended up paying her to leave (2 months free rent) but it looks like it paid off. Her rent for a 2 bedroom was $474.77, but I have a lease now on the apartment for $799 a month. Surprisingly, I got this tenant because they saw pictures of the first unit I did and knew that I was finishing the second unit the same way. When they did the walk through the place was gutted and I didn’t even have the walls framed in yet!

I have looked at some other systems out there, but it seems to me that the only one that really works is finding a run down property with below market rents in a good area, fixing it up, and rerenting to higher classed tenants. If I knew a few years back what I know now, I would get the old tenants out ASAP even if I need to use my “cash for keys” program.

Right now I work full time so I rely on a dependable contractor that I feel I can trust. I hope to start renovating my own houses down the road, but I think I might need to get rid of my job to free up the time. Currently, I just do a walk through each day to see what work has been done and simply manage the renovation. Once the triplex is completely turned around next month I figure I will start looking for another project; I just need to convince my wife who still has fresh memories of my less stellar tenants.

Anyway, wishing you all the best!

Jim Thrower

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Avoid Perfectionism with Fixer Upper Houses

Wednesday, July 6th, 2011

Govern a great nation as you would cook a small fish. Do not overdo it.
–Lao Tzu

A key to fixing up a house is to know when to stop fixing up. You want the house to look good, yet you know that people are not going to care for your house the same way that you would. For rental properties, I don’t purchase the most costly, or even new, materials. I do a lot of my shopping at stores that recycle construction materials, like Habitat for Humanity’s Re-stores. You can get bargain basement prices on things like doors, kitchen cabinets, hinges, toilets, paint.

Need I say more? It’s a fixer-upper person’s paradise.

If I know that I am going to sell the house I may install higher grade of materials, especially where it really counts, like the kitchens and bathrooms. As Lawrence Dworin says in Profits in Buying & Renovating Homes:

“It’s easy to get carried away on renovation projects – wasting time and money on repairs that buyers won’t pay extra for. I assume you like to do good work. We all do. And we’d like every finished project to be a showplace. But you can’t make money that way. Your buyers have a limit on what they’re willing to pay. That’s why you’ve got to limit repair costs. In this business, you concentrate on fixing code violations and creating a clean, safe, livable house.”

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Planning Some Renovation on Your Rental Property? Be Ready to Comply With EPA Lead Paint Regulations

Wednesday, November 10th, 2010

Common renovation activities like sanding, cutting, and demolition can create hazardous lead dust and chips by disturbing lead-based paint, which can be harmful to adults and children.

As owners of a relatively small number of rental properties, it may be tempting to think that we are exempt from the regulations that apply to people who own real estate empires. We can just wander into our rental homes, hammer in hand, and do our little renovation projects, right? We are, after all, captains of our own ship, and masters of our own destiny.

Hold on there, Sherlock, EPA begs to differ.

Get certified or get out of Dodge

Property owners who renovate, repair, or prepare surfaces for painting in pre-1978 rental housing or space rented by child-care facilities must, before beginning work, provide tenants with a copy of EPA’s lead hazard information pamphlet “Renovate Right: Important Lead Hazard Information for Families, Child Care Providers, and Schools.” Owners of these rental properties must document compliance with this requirement. EPA has a sample “pre-renovation disclosure form” to guide you.

As of April 22, 2010, property owners who perform these projects in pre-1978 rental housing or space rented by child-care facilities must be certified and must follow the lead-safe work practices required by EPA’s Renovation, Repair and Remodeling rule. To become certified, property owners must submit an “application for firm certification” and fee payment to EPA. The Agency has up to 90 days after receiving a complete request for certification to approve or disapprove the application.

Steps to take before beginning a project

Property owners who perform renovation, repairs, and painting jobs in rental property should:

1. Take training to learn how to perform lead-safe work practices.
2. Learn the lead laws that apply to you regarding certification and lead-safe work practices.
3. Keep records to demonstrate that you and your workers have been trained in lead-safe work practices and that you follow lead-safe work practices on the job. To make recordkeeping easier, you may use the “sample recordkeeping checklist” that EPA has developed to help contractors comply with the renovation recordkeeping requirements.
4. Read about how to comply with EPA’s rule in the “EPA Small Entity Compliance Guide to Renovate Right.”
5. Read about how to use lead-safe work practices in EPA’s “Steps to Lead Safe Renovation, Repair and Painting.”

Do the new rules apply to my project?

The rule must be followed when “repair or maintenance activities disturb more than 6 square feet of paint per room inside, or more than 20 square feet on the exterior of a home or building.” Renovation is defined as any activity that disturbs painted surfaces and includes most repair, remodeling, and maintenance activities, including window replacement.

What is my motivation to comply?

Fines for violating rule requirements can be up to $37,500 per incident, per day.

What if I hire a contractor?

If you have the work performed by an outside contractor, you should make sure that contractor has the proper training/certification.

You can verify that a contractor is certified by checking EPA’s website at epa.gov/getleadsafe or by calling the National Lead Information Center at 1-800-424-LEAD (5323). You can also ask to see a copy of the contractor’s firm certification.

Realtors, and property managers are all also affected by these EPA regulations.

For more information, see the EPA Renovation, Repair and Painting site

Due Diligence and Property Inspection, Part 9: Qualifying the Inspectors

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Getting Started with Fixer Upper & Rental Houses (Video)

Friday, September 10th, 2010

I think that buying fixer upper houses and turning them into rental properties is the easiest way to make money in real estate. You can do it in your spare time and still work your 8:00 to 5:00 job. And, rental houses can create a steady new income stream, that could even allow you to retire from your regular job, as I did.

This video which provides a general overview of the process for starting up a fixer upper and rental house business.

William Nickerson – real estate better than stocks

Thursday, August 5th, 2010

William Nickerson, in his book How I Turned$1,000 into Three Million in Real Estate – in My Spare Time, said “you success with real estate properties is enhanced because you can retain control of it.”

Many people have made money in stocks, but they relinquish control of their money, except when to buy or sell.

When investing in real estate properties, you can retain personal control in all stages of the selection, operation and improvement of your investments. You are the captain of your own ship.

More radio interviews scheduled

Aug. 10, 9:10 am, Dave Kelber will interview me, WRNJ 1510 am Hackettstown, New Jersey.

Aug. 11, 8:10 am, Mark Wayne will interview me, WICH 1310 am, Norwich, Connecticut.

Aug. 17, 6:50 am, Jason Mansmith will host me, WRPN 1600 am, Ripon, Wisconsin

Here is the complete list of my upcoming  radio interviews. I will keep you posted as more are added

Aug. 10, 9:10 am, Dave Kelber show, WRNJ 1510 am Hackettstown, New Jersey.

Aug. 11, 8:10 am, Mark Wayne show, WICH 1310 am, Norwich, Connecticut.

August 17, 6:50 am, Jason Mansmith show, WRPN 1600 am, Ripon, Wisconsin.

August 20, 8:30 am, I will be on David Sutton’s show, KSRN 1490 am, Los Alamos, New Mexico.

August 25 at 8:08 am,  I will be on Jeff Anderson’s show, KSDR 1480 am, Watertown, South Dakota.

Breakdown of townhouse purchase costs

Friday, February 13th, 2009

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Here are the final numbers on the rental property that I purchased.

Price: $106,000
Interest rate: 5.125%
Term: 30 years
Down payment: $21,200
Principal & Interest: $457.37
Taxes & Insurance: $128.87
Total monthly payment: $586.24
Estimated rent: $770

The townhouse is 1100 sq.ft., 2 beds & 2 baths, washer, dryer, carport, and small back yard. It has a great central location and should rent easily. I have another property nearby that is very easy to rent.

It needs some cleanup and repair work in the kitchen, fire alarms, blinds in the windows, new toilet sets, etc. There is nothing big that we have to do to it. With my wife and kids pitching in, we should have it ready to go by the end of the weekend.

Here are a few more photos of the kitchen, the living room, and the back yard.



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Swimming Pool Issue

Friday, September 26th, 2008

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The search continues for a new investment house. As soon as my wife and I identify & purchase our next fixer-upper, we will move into it and rent out the one we are in now.

A lingering question related to our present house that we haven’t resolved yet is, what do we do with the swimming pool in the back yard? When we bought the house, the pool had already been installed, but it was missing a pump, it doesn’t have a guard fence, and it probably needs to be painted. We have put off the decision of what to do with the pool until last.

Initially, the plan was fix the pool and sell the house. Now that it will become a rental, the question arises “what if a tenant falls in the pool and drowns?”. Wouldn’t it be better to just put a cover over it and not fill it with water? My inclination is the later.

Watch this space for further developments . . .

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Rains and Leaks

Monday, September 1st, 2008


Investment House Search Update

Despite the debacle last month, my wife and I are back to beating the bushes looking for our next “dream” fixer-upper house. Our plan is to find another one that we can live in while we repair it. That has worked out pretty well on the one we are living in now.

Of course, if a great deal for a regular rental pops up, we’d probably grab that too.

Rains = Leaks

We got some heavy rain Saturday. I received a call from a tenant Saturday night. She reported three leaks in her house. I knew it was time to re-coat the roof last spring, but I thought it would hold out throught one more rainy season. I was wrong.

So, flat roofs being what they are, the roof has to be dry before it can be patched. And, there has to be no threat of rain, or the coating will just wash off again. Been there, done that.

There is a 30% chance of rain today, but for the rest of the week the forecast is 0%. Tomorrow ought to be a good day to take care of it.

Save Money on Making Fixer-Upper Repairs

Thursday, August 21st, 2008

Every person who owns a fixer upper house business ought to learn to make repairs.

Take a look at my new ezinearticle entitled Save Beaucoup Money When Investing in Fixer-Upper Houses! 5 tips on Learning to Make Repairs.

Preview: Tip #1 is Stick to Experts Like Glue

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Ode to Grout, and fixer upper houses

Monday, April 7th, 2008


There are very few conversations that include the word “grout” in them. Grout is one of the most under utilized words, and unappreciated substances in the English language. Yet, where would tilers be without grout? And yes, where would all of us who have tiled floors or walls be without this cementy substance?

This weekend, in a never-ending effort to finish repairing our fixer-upper house so we can rent it out, the family undertook to tile the closet floor. This was one of several smaller do-it- yourself projects that remain to be done before we can call this house finished.

Here is how it went down.

Step 1.

Number 1 son expertly cuts tile for the floor (note ear plugs -not an MP3- for protection).

Number 1 son precisely mixes the mortar to the right “peanut buttery” consistency.

Number 2 son carefully transfers the mortar from the mixing bucket to the transfer bucket.

Number 2 son and I precisely apply mortar to back of tile. Number 2 son expresses amazement over incredible precision.

Angy relentlessly spreads the much-anticipated “grout” into the spaces between tiles.

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