HOA Rules—Are they Incorporated Into Your Rental Agreement?

This post is compliments of Amy aka “Yetisaurus” who has been an owner and manager of rental property in California since 2003.  She’s an attorney by day and a landlord on nights and weekends.  Her goal is to acquire more property and develop a strong passive income stream so she can retire early (and enjoy it!).

Officer Holding Cell Phone-PDOne of the most important weapons in a landlord’s armory—and one of the most neglected—is the rental agreement.  It sounds simple enough.  All you need is a basic piece of paper that identifies your tenant, identifies the address, and sets forth the monthly amount of rent, the due date, and the amount of the security deposit, right?  Well, that’s a start.

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How can I Vacation as a Landlord?

beach-641548_1280-PDIt’s been a few days (weeks?) since the last post.  All things are going well, September rent is starting to come in already.  I was out of the area in International Falls, MN for a few days, and did not have much of a cell signal.

I was able to keep in contact with my tenants, although no major issues were encountered.  As I begin the mental (and financial) transition to living on rental income alone, I have started to document the process and thoughts as I go.

While this blog is important to me, it has a lower priority than my real job, or my rental responsibilities.  It’s even lower than my daily 3-mile walks with my dog and girlfriend.  The dog certainly thinks so.  I do try to keep life in perspective, especially over the past year, as my true few ‘free’ hours are often commandeered by another higher priority task with very little notice.  I am slowly getting into the retirement mindset.

Here is how my recent vacation as a landlord went.

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How to Avoid Bad Tenants

Avoid Bad TenantsWhen you have places for rent, inevitably you will find tenants to avoid.  You need to understand how to avoid bad tenants.  As a matter of fact, if you screen tenants with any sort of consistent basis at all, about 95% of the inquiries will be from poor quality tenants.  There is even a scientific basis to these numbers.

With about 30% of tenants being ones to avoid, it is better to exclude a few good ones, rather than take a chance.  One bad tenant can kill years of rental profits.  Here is a case of a tenant I recently avoided.

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July – August 2015 Rental Cash Flow

100-PDHoly crap has it been busy.  And I thought last month was busy.  It was also expensive, and might have even been a bit negative on the cash flow side of things…  There were a few repairs, and continuation of my remodel on a unit that was vacant.  As always, rents came in on-time, but I added a couple of upcoming vacancies that will be coming due.

When life throws you lemons, you make lemonade.  Rentals are not always fun, but I can assure you they are profitable, if you can manage them right.

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How to clean out a tub drain

Tub DrainThis article will teach you how to clean out a tub drain.  When you own rental property, there will always be maintenance.  You can do it yourself, or hire someone.  Even in your own home, there are tasks that need to be completed, this is a great one to learn to do yourself.  If you can save $100, that is a couple or three (for two people) nice restaurant meals (in my places), or $100 to your retirement.

Of course some tasks are not fun, some are messy, and some of them are just gross.  Even the tasks you think are real bad ones; there is someone out there that does them all day, every day.  Do not feel sorry for yourself.

When I turn a rental over, cleaning a tub drain is a very common task.  It’s not fun, but not difficult.

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Should I Pay Off My Rental Mortgage?

debt-37557_1280-PDIf I pay off my rental mortgage, my cash flow will definitely increase.  It has been a year since I paid off my last mortgage, not literally my last mortgage, but the most recent one I paid off.

My investment account balance has grown back to where I was before I paid the mortgage off, and then some.  So, I am now wondering if I should pay off one additional mortgage.  There are a lot of things to think about before you make a sizable payoff.  What are the other uses of the capital?  How strong will your cash flow be after the payoff?  What are the alternative investments, such as the stock market?

Here is the analysis that I am going through.

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How to Begin Investing in Real Estate – 6 Steps to Finding Amazing Deals

DealI get emails and other correspondence quite often asking me how to begin investing in real estate.  When you are trying to find your first real estate deal, real estate investing seems very complicated.  It’s not that difficult, but you have to understand that deals are not on every corner, at least not at the sellers price.   It takes diligence, looking at many potential deals, in order to find ‘the one’.  Then you have to find the next deal.  Professional investors are everywhere, and they make a living in every city.  You can do it too, but you need patience, persistence and determination.  And some seed capital.

How to Begin Investing in Real Estate

Are you still struggling to find good deals in your market? What are you waiting for? I hear it all the time: “My market is so overpriced; there are no deals.” “I looked for a deal, but the numbers do not work.” “I am trying to find a deal with no money down and cannot find one.” “All the properties I look at need work.” “My real estate agent can’t find me good deals.” “The ‘Bay area’ has no deals.”

Read More Here

Are you still looking to get into real estate investing?  How long have you been trying to ‘get a deal’.  


3 Strategies to Avoid Student Loans

Student LoansWhen I went to college, I took out thee student loans of $2,500 each.  I did not actually get the entire $2,500, as there was something like a “funding fee”, so I only received ~$2,350.  I had some VA benefits, which paid an additional $225 per month (for 36 months), of which I had previously contributed $75 a month for (for 36 months).  The interest rate was ~9%.  A total benefit of $5,400.

I really did not need the student loans, but it did give me some cushion, and helped motivate me to continue school.  I did not want to make the payments, and if I quit school I would have to pay the loans back.  I got the loans and out the money in the bank for an emergency fund.

I had some small grants, which totaled less than $500.  I lived at home, and commuted to school with my old truck and car.  I did not actually have anyone else living with me, but it was a property my father owned and I paid some rent.

My vehicles were old and tired.  I remember getting stranded several times by each vehicle at different places throughout the cities.  Ball joints that gave way, cam shaft gears that came loose, clutch cables were among the problems that I dealt with.

I also did work though, quite a bit.  So, I was able to retire my student loan debt shortly after graduating.  I was a bartender and did several other side hustles while in college.  i lived cheap, and spent many hours at the gym, which was nearly free.  If I could just get back to the gym as often, it would be a great thing…

Here are some ideas from Nate Matherson is the Co-Founder and CEO of LendEDU

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June – July 2015 Rental Cash Flow

100-PDThe past few months have been pretty busy.  The rental cash flow has been as expected.  I have had several turnovers, and some other maintenance issues to take care off.  Luckily, all is well and the rentals have moved forward for another month.

Hopefully you have had a chance to look at some of my other cash flow posts and have been following my retirement countdown.   As I get more detailed in my own retirement dashboard spreadsheet, and add more check points and cross checks, I realize this next year of working is mostly an exercise to put the final nail in the coffin of the cube farm.

So here is how the past month went…

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Countdown To Retirement – Financial Check Up 06/2015

Back in January 2015, I created some financial goals as a countdown to retirement.  The goals were pretty aggressive; it’s time to see if I have lived up to my plan.

It is one thing to create a plan, and another to follow through with the plan.  On January 1, I had 551 days until I leave my full time job.  Today, it is closer to 380, with only 230 work days left, or 54 weeks.  That is only 60% work days, as I have some vacation and holidays coming.  And it doesn’t count sick days.  But who is counting…?

As the days draw closer to the last day of full time work, and the last days of getting a steady paycheck, I check my retirement plans very often.  Way more often than needed.  Does a retirement plan need to be checked every hour?  I sometimes think it needs to be checked even more often, especially when the market is soaring.

Here is how I have progressed.

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