Single Family Home Rental Advice... My 2 Cents Worth

An extended family member from out of town asked a rental question. I'll share it here.

Susie and her husband are moving to a new city for work relocation. The house they have in San Diego County is down in todays market and they have very little equity left. But they put plenty of equity and sweat equity into this house. So selling at a loss is not a great thrill.

Therefore they want to hang on for the rebound in the market and rent it short term.

The dialog went like this:

Hey Keith-

Have a question for you. Is it better to rent to someone you know who would take excellent care of your home and take a little bit of a loss on a monthly basis OR make a couple hundred extra a month with someone you don't know?

I'm leaning toward the little bit of a loss situation but want your professional opionion!

Love ya!

And my Reply is:

You have to go by the seat of your pants on these situations.

In calling on the references (more than one!) the most important question I can ask of the previous landlords is "Would you rent to them again?"

The amount of damage and down time for repairs is really heavy if you select poorly. So past landlords are key.

You have one unit. One heavily invested home. If you are renting in the new town... Is the rent received (old place) higher than the rent paid (new place)? If so, it is a good thing.

My 2 cents.*

Sincerely,
Keith

* Price charged is Zero. My liability is the same.
No legal advice given here. Emotional justifications and encouragement offered freely and with my best of intentions to make you feel better about a hard and difficult decision.

Her followup:

Thank you brother!! Appreciate your advice. ...


One point I like to make here is the number of Units matters. If you buy or happen to have just one (like Susie above) and a bad tenant messes up or leaves early you are down and left naked to pay the mortgage by yourself for as long as it takes to repair and re-rent. That can be very costly. If you have more units... 5 plus! Then you have less financial hardship as you fix and re-rent one.

so my advice... Get as many units in the investment property as you can afford! Or team up with a couple of others so you can buy and properly fund a bigger asset.

So call me if you are interested in buying or investing in performing real estate in the Los Angeles region where historically the rents have been strong and stable.

Sincerely,

Keith Lambert
310-391-0821

Visiting and need to see Los Angeles... Beach side option

OKay if you are coming to the area to search for a place you need a short term place....

If you are in the area and have family coming from out of town and you do not want them on your couch for days.

If you are a business transfer and want a week of good housing but not a boring hotel.

THEN the answer is the Venice Suites or Venice Breeze Suites.

You can find all the info on www.BestOfTheBoardwalk.com

Really cool to look out your windows and check out the serf on the beach. WiFi for the guests. And Venice Suites does include parking. A big deal in beach towns up and down the coast. Ask if parking is included. Many of the other places will say No.

Stay at the best. Right on Venice Beach for the views and fun hip feel.

IMHO. These are the best.

Keith

Merry and Happy - To all a good night. 2012 - Bring it on!

I think this is the best Holiday Card for this season.

Hopping you all had a nice holiday filled with family and love. Now as we look at the new year we turn to 20 12 with aspirations for a very profitable year.

I think the new year is going to be very good.

Enjoy...

Snow Globe Los Angeles from All Cut Up Films on Vimeo.

Nice! Right?

Keith

1031 Exchange is a Great Wealth Building Tool Available to Income Property Investors

Section 1031 of the Internal Revenue Code has been called the single greatest wealth building tool available to real estate investors. If you are unaware how Section 1031 of the IRC can magnify your returns and help you create wealth, review this:

An investor who purchases $100K worth of Microsoft stock in 2000 sells the stock today for $200K. The investor yields a whopping 100% return, correct? Well yes, but don’t forget that when tax time comes around, our Microsoft investor will owe the IRS and State Taxing Authority about $30K. After taxes, the profits from the Microsoft investment plummets from $100K to $70K. Still not a bad return, but after taxes our Microsoft investor now has only a total of $170,000 to reinvest.

Now let’s contrast this with an investor who makes the same returns in the real estate market. A property purchased for $100K, appreciates to $200K. The investor earns the same $100% return. The major difference however, is the investor can elect a 1031 Exchange and defer the capital gains taxes. Doing so leaves the investor with a total of $200K to reinvest.

The effect taxes have over the long term are dramatic. I suggest having performing real estate in your portfolio.

If you want to invest in secure West Los Angeles multifamily or commercial property please consider using my services to aquire/manage/sell as needed.

Sincerely Keith Lambert
310-391-0821

Venice Breeze Suites on Venice Beach - Furnished rentals

Soon on the market

Golf day

Spent yesterday playing gold and then fun times in the “Old Place” OMG this was so cool.

First we had a round of 18 holes of great golf as a foursome at Malibu Country Club. It was great weather and hot but not too hot. The golf was fun and the betting of skins was merciful light. Jeff, Nick and Brooks were good fun company. I did my fair share of good Drives and Putts. Yet I did burn through a few golf balls. The course is narrow for us duffers. If you have an inopportune hook or slice just leave it to the snakes in that wild rough.

We had many great shots by each of the golfers.. Nick has the best come from behind put on from the fringe that dropped in after a 30+ foot roll down hill and kept Jeffery from going up another skin. I had several long tee shots that landed on the green for a chance at "Greenie" side bet wins. And I got one! This doubles the winnings on that hole.

Then after the round Jeffery and I did a second 9 holes in a fresh golf cart (it is a long course with lots of hills). They even made us a deal on the price of the play as it was getting very late in the day. So Brook and Nick headed home. Jeff and I went on to play a bunch more holes and basically had the course to ourselves.

Delightful cool air and nice lingering light left us out there for a long time. It was so invigorating we kept at it for a long time. So fun.

I’m feeling a bit whooped from a total of 31 holes of golf! Jeffery then took me to get a steak dinner. A super cool place. The wine and steak and beer and banana bread pudding we had last night at the Old Place put me back in shape some. He knew what he was doing. He had been here many times before.

I was impressed with how much fun it was. Wine, Beer, Clams and STEAK. A short menu. Really fun modern update in an OLD western bar that has been there for YEARS.

http://www.oldplacecornell.com/

Dear Reader... Road Trip Tip: If you visit Los Angeles I suggest you rent a convertible so you can drive up the coast of Malibu on a sunny day. And then back via our little bit of “Out Back” of the Santa Monica Mountains. Drive home a back way up Kanan Road and some via Mulholland Hwy. A serpentine snake of a road that will be fun in a convertible and when you have no timetable to have to keep. Then do stop here. Drop out to the Freeway 101 down to 405 and home.