The week in review

Wow! It's been a busy week. Still cleaning up rentals. Got one finished and a new tenant for it. Still working on another, and 2 are still ready to go with not much in the way of qualified inquiries, though in this market, I may just lower my standards.

Can't believe it's been over a week since I've posted. I've had several things I've wanted to say, but with all the cleaning and such, I been a bit bubble brained by the time I get home...maybe it's the cleaning chemicals.

I've commented before on the things that people leave behind, and I think it's time to mention the things they take. Things that go missing are typically anything not nailed down. I don't know how many sink strainers have been taken over the years. I also make sure that there is a full complement of working lights in a rental. these often go with the renters too. I've been lucky insofar as appliances have not been taken from the rentals, yet (knock on wood). This week they even managed to take HALF of the security chain lock on the front door...HALF! Now that's just inconsiderate and lazy.

Slightly related to items taken, are items replaced. In a number of rentals, doorknobs or locks get broken and replaced by an inferior quality item. I use Kwikset brand locks on all my exteriors and Kwikset or Schlage on the interiors (it just depends on what I find on sale as they don't need to be re-keyed--sometimes the sale is at a garage sale or thrift shop or Craigslist as I know how to rebuild a number of lock types). When tenants mess up the doors, the handy ones among them repair them (half-assedly most of the time) and put a new doorknob on--99% of the time a POS, off-brand, fall apart when you turn it, take it to the recycle bin, piece of soon-to-be scrap metal.

Well, after that rant, I must say, Thanksgiving is coming up this Thursday, and I'm leaving town. Going to see Mom and her husband. I do have a lot to be thankful for. I can think of much worse things renters could do to a landlord, and maybe some day (when I know longer have residential rentals) I'll publish a list.

Happy Thanksgiving in case I don't write until afterwards.

James

9 Tips for improving your credit score, today's activities.

This was sent to me from RISMedia via Lowe's. So here's the link.

I just got back from a conference in Murrieta for  Voice of the Martyrs.

We have to go to an Adhoc committee to talk to the county service area about lowering the water and sewer prices. Over the last 7 years they've gone from around $75 every 2 months to $215 every 2 months. I have eight units and am paying $1700 plus use fees every two months.
The building code would allow for half the water meters I currently pay for, but the county will not allow it. The units are old, and were hooked up to the sewer before the previous owner bought them. There is only one sewer connection, but the county bills me for eight. Maybe we can get something done.

One more regulation for landlords to deal with.

As of April 22, 2010, those of us who are landlords and contractors will have to have another class in regards for dealing with lead paint in houses. This will further depress the value of older buildings along with the new energy codes that are coming up.

For more information, here is the link courtesy of the Apartment Owners Association.

The Trip to ADM

So, we went down to Automobile Driving Museum in El Segundo, CA yesterday. It's open Tuesday through Sunday, 10am to 4pm, with a suggested donation of $5 for entry. We met the Curator, Earl. There is a large collection of Packards with some other vehicles as well. The 1989 Batmobile is there for a bit, and right now, there are some Darrin coaches.

The is a normally aspirated Mercedes Benz diesel coupe in the back of this photo. The Batmobile is through the door and to the right.

A Honda 110.

A few bikes as well.

Unfortunately, the low sun, put a lot of glare in the pictures and I was just using my cell phone.

Some classic and the 89 Batmobile.

I had a fun time and if you're going to be down near LAX and have an hour or so to kill it's a nice time. Oh, and btw, they have owner's manuals for a variety of cars for sale (not cheap) and a library that you can browse on site with a lot of specialty books and magazines.

Heartfelt thanks to all the veterans, today.

I always feel a little strange saying something like "Happy Veteran's Day", because we are remembering that there are those of us who will put our lives and limbs on the line for the preservation of our country. So "happy" seems inappropriate, unless we are all happy that some are willing to make these sacrifices.

I spent time with friends talking business and cars. I went to lunch and got sick for about 5 hours afterwards. I went to the Automobile Driving Museum in El Segundo. I have pictures, but don't feel like posting them at the moment. So perhaps later.

Things people leave behind--and things they take.

I am always amazed and amused by what people leave behind. I get a lot of cleaning products and yard tools. Mops, rakes, brooms, dust pans, and an assortment of chemicals. Maybe the tenants are trying to make up for not using them in the first place. Or they just don't want to move them as they won't use them anyway.

Of course, the things they take are interesting too. Why take the sink strainers?  Why take all the light bulbs? I supply lightbulbs for every fixture and the plugs and strainers for the sinks and lavs. Anyone care to answer?

Cleaning at the vacant units

So, I've got the left behind trash out. The large items have been moved to the curb and the disposal service called for large item pickup. Someone took the couch already. The power will be on sometime tomorrow. Had carpet guys over, but the estimate went from $7/yd to $13/yd, so I may tile the living room, or steam it several times and hope for the best. Scrubbed the countertops, washed the cabinet exterior, mopped with ammonia in the kitchens & baths, swept the garages, raked the yards, and still need to do more.

Anyway, gonna play the cargo area shuffle, as I remove tool boxes, and load the vacuum and steam cleaner to take to the rentals that need cleaning. Then I need to get some things in storage and bring them back home, leaving the vac and steamer at the unit which won't have power until Tuesday (whoa-o-oh, voices carry).

November Begins

It's been a busy beginning of the month. Escrow closed for one client. I dropped off an earnest money deposit for another. I had the normal collection of rent. I'm cleaning up after renters and listing stuff for rent and for sale. I also installed did some repair work.

A couple things I had to do were plumbing. I capped a 1/2" copper pipe that was used for a swamp cooler. It had a saddle (or vampire) tap, and the tap was leaking, so I removed it. The mineral content in the water had caused a very large hole to form under the tap, so I cut off the pipe with a hacksaw, cleaned up the edges and slipped on a 1/2" Sharkbite® fitting. The fitting went on in less than 10 seconds. I can solder, but this is so much faster. They can even be removed with a plastic tool. They are available at Home Depot. Lowe's has a similar product, I think it's called Gatorbite®. They cost around $5 instead of $2 but save so much time, and are way cheaper than calling a plumber. 

I also replaced a low boy toilet with a standard height toilet. The copper piping is surface mounted on the brick wall. The 't' fitting had to be moved 4" to the left to allow the tank to clear the angle stop (my fault), and so I cut the pipe and used 2 of the 1/2" couplings to do this. Once again, saved a bunch of time. This particular run of pipe has caused me some problems soldering before.

I hope to have more updates later. Last month was crazy busy, and this month has a lot of catch up to do.

When is it better to rent?

As I was waking up this morning I was dreaming about giving away everything I owned and just living on whatever God provided for me and my family. It was a radical dream and got me to thinking about the benefits of owning things, real estate in particular, and that led me to thinking about when it would be better to NOT own real estate.

If you go to Karl Jeacle's Mortgage Calculator you will find that most of the first 7 years of payments go towards the interest on the home loan on a 30 year mortgage. If you as a buyer, are buying an older home there are also maintenance costs. People generally end up as caretakers for the banks property during this time. Unless the properties are increasing in value fairly rapidly it may not make sense to buy a home.

I was looking at homes in Ventura County by the ocean, and it's much cheaper to rent than buy. If you want to live by the ocean, Ventura County is beautiful, and has several places that are fairly inexpensive to live as a renter. In fact the rents are $1500-2000/month less than a 30 year mortgage and Mello-Roos would be.

In addition to the direct costs of ownership, there are indirect costs. Certain areas have higher effective tax rates due to local municipal and county bonds. There are also  utility costs to consider. Most landlords pay for some utilities such as trash and water, and others pay for or subsidize some heating costs.

During college, I had an apartment where the landlord (for whom I waited tables) paid for the building hot water. I never turned on the gas; I cooked with a microwave and a hot plate, and Long Beach never go cold enough for me to need anything other than an electric blanket. Not only did I not have the monthly bill, I didn't have to pay $150 for a utility deposit.

The other question is whether or not you want to stay in the area you're in for more than ten years. Unless you're sure you're staying at least that long, you needn't buy unless you are sure you're in a rising real estate market. During the boom of the early 2000's my uncle bought a condo for my cousin to rent. The payments were cheaper than renting, and he made twenty grand by the time my cousin graduated. In a flat or down market, you can probably find an inexpensive rental, even with less-than-perfect credit. If you have good credit you can probably buy a repo for less than rental costs, but you'll need to get estimates on the repair bills, which may drive your costs higher as many repo's are older properties.

You should definitely look into all the costs of ownership before jumping into buying a repo. Freddie Mac has a PDF that gives estimated life expectancies. It would be wise to look at the various appliances in a house and note the dates of manufacture on them, and ask any home inspector what the approximate age of the roof is--though you might be able to find the roof age at City Hall or the Building and Safety or Community Development offices (wherever a contractor or owner has to pull a permit for work.)

To sum up, it may be better to rent until you can save up enough of a down payment to get a 15 or 20 year mortgage.