Saturday, January 31, 2015
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.
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

 
SPCA begins caring for more than 100 rescued dogs

By Kevin W. Green | From Page: A1, 4 Comments | Gallery

 
Solano County confirms 1st local case of measles

By Staff and wire reports | From Page: A1, 3 Comments

 
Top workers, top students – and succulent crab

By Susan Hiland | From Page: A2

Armijo students savor catered Fuddruckers lunch

By Susan Hiland And Susan Winlow | From Page: A3 | Gallery

 
Partial Fairfield freeway road closure starts Monday

By Ryan McCarthy | From Page: A3

 
DUI patrols set for Super Bowl Sunday

By Ryan McCarthy | From Page: A3

Fairfield police log: Jan. 29, 2015

By Susan Hiland | From Page: A9

 
Suisun City police log: Jan. 29, 2015

By Susan Hiland | From Page: A9

 
.

US / World

Man charged in California family’s deaths will be own lawyer

By The Associated Press | From Page: A3

 
Stanford University to get $50 million to produce vaccines

By The Associated Press | From Page: A3

Yosemite park fee hikes coming in March

By The Associated Press | From Page: A4

 
PG&E releases thousands of emails with state regulators

By The Associated Press | From Page: A4

San Francisco coroner says human remains are from 1 man

By The Associated Press | From Page: A4

 
Judge expresses doubt about constitutionality of no-fly list

By The Associated Press | From Page: A5

French fracture laid bare as 8-year-old praises terrorists

By The Associated Press | From Page: A5

 
US mulls Middle East-North Africa category for 2020 Census

By The Associated Press | From Page: A5

 
Balloon crew makes history crossing Pacific Ocean

By The Associated Press | From Page: A5

Murder trial begins 35 years after 6-year-old vanished in NY

By The Associated Press | From Page: A5

 
Judge: Funeral home wrongly sold Lee Harvey Oswald’s casket

By The Associated Press | From Page: A5

Jordan awaits proof hostage is alive after swap deadline

By The Associated Press | From Page: A5

 
 
.

Opinion

 
GOP should plan for post-Obamacare world

By Ramesh Ponnuru | From Page: A8, 5 Comments

Editorial Cartoon: Jan. 31, 2015

By Daily Republic Syndicated Content | From Page: A8

 
Solano College news makes me sick

By Letter to the Editor | From Page: A8, 2 Comments

.

Living

Today in History: Jan. 31, 2015

By The Associated Press | From Page: A2

 
Community Calendar: Jan. 31, 2015

By Susan Hiland | From Page: A2

Horoscopes: Jan. 31, 2015

By Holiday Mathis | From Page: B7

 
My recently widowed mother is already thinking about re-marrying

By Kathy Mitchell and Marcy Sugar | From Page: B7

Five ways 3D-printed food will change the way we eat

By The Washington Post | From Page: B10, 1 Comment

 
.

Entertainment

TVGrid

By Daily Republic Syndicated Content | From Page: B5

 
Miranda Lambert leads ACM Awards with 8 nominations

By The Associated Press | From Page: A7

Shakira gives birth to 2nd baby with Spanish football star

By The Associated Press | From Page: A7

 
List: 10 Super Bowl ads you’ll be talking about

By The Associated Press | From Page: A7

 
Rod McKuen, mega-selling poet and performer, dies at 81

By The Associated Press | From Page: A7

.

Sports

 
Mustangs ride away from Indian’s home court with 66-60 victory

By Marcus Lomtong | From Page: B1 | Gallery

 
Hayward, Utah Jazz upset Golden State Warriors 110-100

By The Associated Press | From Page: B1

LeBron returns, Love, Irving team for 44, as Cavs top Kings

By The Associated Press | From Page: B1

 
Seau, Warner, Pace first-time Hall eligibles

By The Associated Press | From Page: B2

N.H. Speedway general manager faces lewdness charge

By The Associated Press | From Page: B2

 
Judge: Jury can watch Super Bowl unless Hernandez mentioned

By The Associated Press | From Page: B2

Djokovic beats Wawrinka to reach fifth Australian Open final

By The Associated Press | From Page: B2

 
Blackhawks Hall of Famer Stan Mikita has brain disorder

By The Associated Press | From Page: B2

Kings’ Cousins to replace Kobe Bryant in All-Star game

By The Associated Press | From Page: B2

 
Ko takes lead at LPGA opener, closes in on golf history

By The Associated Press | From Page: B2

Laird leads as Tiger shoots 82 and misses the cut

By The Associated Press | From Page: B2

 
NFL’s Goodell seeks to look past ‘tough year,’ to future

By The Associated Press | From Page: B3

Carroll says decision is Sherman’s if baby arrives early

By The Associated Press | From Page: B3

 
This date in sports history for Jan. 31, 2015

By The Associated Press | From Page: B4

 
.

Business

US consumer confidence at highest level in a decade

By The Associated Press | From Page: A1

 
Companies steering clear of Super Bowl name

By The Associated Press | From Page: B5, 1 Comment

.

Obituaries

Anthony Neal Hunley

By Nancy Green | From Page: A4

 
Joe Lambert Robinson

By Nancy Green | From Page: A4

Danica Gojkovich Ryder

By Nancy Green | From Page: A4

 
Garry A. Britton

By Nancy Green | From Page: A4

Anneliese Edith (Luckner) Fraser

By Nancy Green | From Page: A4

 
.

Comics

Peanuts

By Daily Republic Syndicated Content | From Page: B6

 
B.C.

By Daily Republic Syndicated Content | From Page: B6

Dilbert

By Daily Republic Syndicated Content | From Page: B6

 
Frank and Ernest

By Daily Republic Syndicated Content | From Page: B6

Baldo

By Daily Republic Syndicated Content | From Page: B6

 
Rose is Rose

By Daily Republic Syndicated Content | From Page: B6

Baby Blues

By Daily Republic Syndicated Content | From Page: B6

 
Sally Forth

By Daily Republic Syndicated Content | From Page: B6

Get Fuzzy

By Daily Republic Syndicated Content | From Page: B6

 
Wizard of Id

By Daily Republic Syndicated Content | From Page: B6

For Better or Worse

By Daily Republic Syndicated Content | From Page: B6

 
Beetle Bailey

By Daily Republic Syndicated Content | From Page: B6

Pickles

By Daily Republic Syndicated Content | From Page: B6

 
Blondie

By Daily Republic Syndicated Content | From Page: B6

Zits

By Daily Republic Syndicated Content | From Page: B6

 
Garfield

By Daily Republic Syndicated Content | From Page: B6

Cryptoquote

By Daily Republic Syndicated Content | From Page: B7

 
Word Sleuth

By Daily Republic Syndicated Content | From Page: B7

Sudoku

By Daily Republic Syndicated Content | From Page: B7

 
Crossword

By Daily Republic Syndicated Content | From Page: B7

Bridge

By Daily Republic Syndicated Content | From Page: B7

 
.

Home Seller 1/31/2015

Quirky add-ons a common feature of celebrity homes

By The Associated Press | From Page: HSR2

Real estate transactions for Jan. 31, 2015

By Daily Republic | From Page: HSR3

5 ways to make a kitchen more germ-free

By The Associated Press | From Page: HSR3

Average US rate on 30-year mortgage rises to 3.66 percent

By The Associated Press | From Page: HSR3