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Buying/ inheriting a rental property
by Anonymous
on September 10, 2017 @19:28
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My hubby just partially inherited a multi family rental property in a great neighborhood and in pretty good condition. But it does not have a positive cash flow. The property taxes are high and the utilities are through the roof. The rent is at fair market value and the LL pays all the utilities. It would cost $25000 to split up the utilities so each unit pays their own. What do we do? I can contest the property taxes but that doesn't mean I'll get them down.
The numbers don't work to put it on the market for sale. One agent won't even list it. Should we invest the money to split the electric and water service? How about taking the washer and driers out of all the apartments and building a coin operated laundromat next to the building?
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Re: Buying/ inheriting a rental property
by Garry (Iowa)
on September 10, 2017 @23:46
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Taking the W/Ds out of the apartments is totally out of the question. All of your Ts will expect a rent decrease, ESPECIALLY if they would then have to go to your newly built laundromat and have to pay ADDITIONAL money to W/D their clothes. Plus, you run the risk of some of your Ts moving out, which create additional cash flow problems. This same scenario could happen if all your Ts had to all of a sudden pay their own utilities. As the other poster asked, what does "partially inherited" mean ? If there are other owners, my suggestion would be that whatever your husbands "share" is, discount it by 50%, and sell his "share to the other co-owners, and get out of the ownership of the building. After all, the inheritance cost you nothing on the date you received it, but it could cost you plenty if you keep it.
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Re: Buying/ inheriting a rental property
by Carla
on September 11, 2017 @03:39
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As new landlords, you are making some basic common mistakes in your approach. Tenants who pay higher rents, look for properties that have units with washer dryer connections. If you are currently supplying washer/dryers with the units, this can be phased out as units come vacant.
There is no need to invest in splitting the electrical/water up either. A good solution is to phase in "RUBS" (Ratio Utility Billing Systems) so that as the units become vacant, the cost of utilities is divided among the tenants/units and added to the rent based.
The best advice is to join a local landlord association and find a mentor who can help you along the way to being profitable.
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Re: Buying/ inheriting a rental property
by Anonymous
on September 11, 2017 @16:51
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Partially inherited, in his case, means he owns 75% of it. Right now the tenants are paying their rent plus $150 per apartment for the utilities but that is way too low because they take advantage and crank the heat up to the max over the winter and the AC to the max in the summer. Even if we raise the portion of the rent that goes toward utilities, they will still max it out. The electrician said all the apartments need to be vacant for him to rewire the place. He has been working on that place for 30 years and knows it well. They're all M2M
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