Tuesday, July 29, 2014
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

What is needed before we buy some rental property?

By
From page C2 | February 16, 2013 |

Q: Mr. Jones: I’m retiring this month from the Air Force after 29 years of service. My wife and I would like to invest in some residential homes to help augment our retirement income. Using my wife’s IRA and a small inheritance I have I think we could put down a fair amount of money on a couple of rental homes and probably have a positive cash flow from the start. So with the housing market improving the way it is, we figure now would be a good time to pick up some houses.  My question is a pretty general one; what do we need to know and what should we look out for? Although I have been a tenant many times during my career, I have never been a landlord.
A: It’s nice to see someone who is trying to see the big picture before jumping into property management.  As the previous five years have demonstrated, you most certainly can lose money in real estate, just like in any other business.
Planning ahead is essential.
There are many places to invest your retirement nest egg. But unlike most of them, owning residential real estate requires that you be actively involved with your investments.
If you buy a stock, mutual fund, or CD, you can invest the money and forget about it if you want to. Not so with a rental property.
True, you could get lucky and have some tenants that pay the rent on time and maybe need a few reasonable repairs here and there and act responsibly. Or you could have the other kind that we deal with day in and day out here in the office.
And remember, your stock or CD will never sue you. You have no such assurance from your tenant.
In other words, being a landlord is not a one-size-fits-all proposition, and certainly isn’t for everyone.
So if you still want to venture into the world of real property investing, here’s a few thoughts gleaned from my 20-plus years in the real estate business.
When you are shopping for rental homes, remember that the homes are for tenants who may not have the same appreciation for the architecture and appointments that you do.
I’ve seen many an amateur investor buy a “cute little Victorian” as a rental. Six months later they discover a bad tenant has torn off all the expensive gingerbread, laid waste to the solid wood rope-and-pulley double-hung windows, and broke out the lath-and-plaster walls.
The house you buy should be simple in design, fairly modern in construction, and relatively cheap to repaint and rebuild. Flooring should be resilient. Carpet should be on the dark side to hide stains. Cabinets are best if they are paintable.
Likewise, landscaping should be simple and easy to care for. That translates into playground-tough grass in the lawns, and draught-tolerant plants.
So now you’ve bought a house, completed whatever repairs are necessary, and you’re ready to find a tenant. Unless you really want to jump into this with both feet, my strong advice is that you hire a professional property management company to find a tenant and manage the property. They will take something like 10 percent of the collected rents as their fee, but it’s the bargain of the century.
Their job is to know all of the California landlord/tenant laws and to help you safely avoid running afoul of them.
But at a minimum, pay them to help you find your first couple of tenants. The difference in your personal life between a good tenant and a bad one can be the difference between going on tropical vacations or bankruptcy.
And finally, even if you do use a management company, get yourself a good book on California landlord/tenant law and memorize it. A California company named Nolo Press makes a couple of very good books for landlords.
Tim Jones is a real estate attorney in Fairfield. If you have any real estate questions you would like answered in this column you can contact him at SolanoScene@TJones-Law.com.

LEAVE A COMMENT

Discussion | 1 comment

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

  • JeanFebruary 16, 2013 - 11:35 am

    Mr. Jones, Once again, I am impressed with your generosity with your knowledge and in your advice.

    Reply | Report abusive comment
.

Solano News

Area LGBT Democratic Club cancels meet

By Glen Faison | From Page: A5, 1 Comment

 
Library teens plan summer reading party

By Glen Faison | From Page: A5

 
Weather for Tuesday, July 29, 2014

By Daily Republic staff | From Page:

 
Big-rig driver strikes telephone lines in Fairfield

By Ryan McCarthy | From Page: A5, 1 Comment | Gallery

 
Fairfield police log: July 27, 2014

By Glen Faison | From Page: A12

Suisun City police log: June 27, 2014

By Glen Faison | From Page: A12

 
Caltrans makes I-80 lane change

By Barry Eberling | From Page: A5, 1 Comment

 
Fairfield tries to end Cordelia Road detour

By Barry Eberling | From Page: A3, 1 Comment | Gallery

 
‘Guardians of the Galaxy’ primed for big screen

By Amy Maginnis-Honey | From Page: A7

.

US / World

 
Sacramento Gold Rush Days canceled due to drought

By The Associated Press | From Page:

Annoying minor floods are increasing on US coasts

By The Associated Press | From Page:

 
Man charged in teen’s 9-month disappearance

By The Associated Press | From Page: | Gallery

Medicare’s own health looking better, report says

By The Associated Press | From Page:

 
Deal to improve veterans’ health care costs $17B

By The Associated Press | From Page: | Gallery

Suspect dead, 2 marshals and cop wounded in NYC

By The Associated Press | From Page: | Gallery

 
New fears about Ebola spread after plane scare

By The Associated Press | From Page:

In Iraq’s Mosul, radicals unleash their vision

By The Associated Press | From Page:

 
Fighting in Ukraine prompts residents to flee

By The Associated Press | From Page: | Gallery

Israeli PM warns of prolonged campaign in Gaza war

By The Associated Press | From Page:

 
Witnesses: Thunderstorm hit beach without warning

By The Associated Press | From Page: | Gallery

Suspect’s mom also charged in Long Beach burglary

By The Associated Press | From Page:

 
City: Emails show ‘cozy’ ties of PG&E, regulator

By The Associated Press | From Page: | Gallery

Pool water dumped in South Tahoe; resort fires 3

By The Associated Press | From Page:

 
Additional charge filed in California wildfire

By The Associated Press | From Page:

California governor takes dig at Texas guard plan

By The Associated Press | From Page: | Gallery

 
.

Opinion

Editorial cartoons for July 29, 2014

By Daily Republic Syndicated Content | From Page:

 
Immigration protests short on compassion

By John M. Crisp | From Page:

 
.

Living

Horoscopes for July 29, 2014

By Holiday Mathis | From Page: B5

 
Today in History for July 29, 2014

By The Associated Press | From Page:

I don’t want to have intimate contact since learning I had a STD

By Kathy Mitchell and Marcy Sugar | From Page:

 
Community Calendar: July 29, 2014

By Susan Hiland | From Page:

.

Entertainment

Kevin Bacon brings his ‘Six Degrees’ to Comic-Con

By The Associated Press | From Page:

 
Sarah Palin launches online subscription channel

By The Associated Press | From Page: | Gallery

‘Sharknado’ sequel has bite and lots of laughs

By Frazier Moore | From Page: | Gallery

 
TVGrid July 29

By Daily Republic Syndicated Content | From Page: B6

.

Sports

Giants lose 5th straight, 5-0 to Pirates

By The Associated Press | From Page:

 
 
Lakers finally confirm Byron Scott is new coach

By The Associated Press | From Page:

Raiders relying on healthy Watson to solidify line

By The Associated Press | From Page:

 
This date in sports history for Tuesday, July 29, 2014

By The Associated Press | From Page:

Quarterback Johnny Manziel’s day at Browns camp

By The Associated Press | From Page: | Gallery

 
Judge OKs record-setting $2B sale of Clippers

By The Associated Press | From Page: | Gallery

Humphrey to savor Hall of Fame day with ‘wingman’

By The Associated Press | From Page:

 
Rays’ Archer: ‘Never saw Hank Aaron flip his bat’

By The Associated Press | From Page:

 
Reed HOF induction gives Bills cause to celebrate

By The Associated Press | From Page: | Gallery

In the Pits: Gordon eyeing 5th title after big Brickyard win

By Jenna Fryer | From Page: | Gallery

 
Marketing agreement an obstacle in US bid for 2024

By The Associated Press | From Page:

Sailors to navigate dirty water in 1st Rio test

By The Associated Press | From Page:

 
Manningham back with Giants, with no guarantees

By The Associated Press | From Page:

.

Business

Contracts to buy US homes slip in June

By The Associated Press | From Page: | Gallery

 
FAA proposes to fine Southwest Airlines $12M

By The Associated Press | From Page: | Gallery

Stocks pause as traders await key economic news

By The Associated Press | From Page:

 
Zillow buying Trulia to build real estate titan

By The Associated Press | From Page: | Gallery

Dollar Tree steps up fight, buys Family Dollar

By The Associated Press | From Page: | Gallery

 
.

Obituaries

.

Comics

B.C. July 29

By Daily Republic Syndicated Content | From Page: B4

 
Get Fuzzy July 29

By Daily Republic Syndicated Content | From Page: B4

Baldo July 29

By Daily Republic Syndicated Content | From Page: B4

 
Baby Blues July 29

By Daily Republic Syndicated Content | From Page: B4

Rose is Rose July 29

By Daily Republic Syndicated Content | From Page: B4

 
Zits July 29

By Daily Republic Syndicated Content | From Page: B4

Crossword July 29

By Daily Republic Syndicated Content | From Page: B5

 
Garfield July 29

By Daily Republic Syndicated Content | From Page: B4

Pickles July 29

By Daily Republic Syndicated Content | From Page: B4

 
Frank and Ernest July 29

By Daily Republic Syndicated Content | From Page: B4

Beetle Bailey July 29

By Daily Republic Syndicated Content | From Page: B4

 
Peanuts July 29

By Daily Republic Syndicated Content | From Page: B4

Word Sleuth July 29

By Daily Republic Syndicated Content | From Page: B5

 
Cryptoquote July 29

By Daily Republic Syndicated Content | From Page: B5

For Better or Worse July 29

By Daily Republic Syndicated Content | From Page: B4

 
Bridge July 29

By Daily Republic Syndicated Content | From Page: B5

Wizard of Id July 29

By Daily Republic Syndicated Content | From Page: B4

 
Dilbert July 29

By Daily Republic Syndicated Content | From Page: B4

Sally Forth July 29

By Daily Republic Syndicated Content | From Page: B4

 
Blondie July 29

By Daily Republic Syndicated Content | From Page: B4

Sudoku July 29

By Daily Republic Syndicated Content | From Page: B5