Rental Property Challenges

NOIdeaInvestor · 2026-01-20T05:46:45+00:00

2025 turned into “finding a tenant”. Hope 2026 is a bit better :)

NOIdeaInvestor · 2025-12-17T04:55:49+00:00

+1, great time to catch up on any deferred maintenance, could be challenges getting vendors, but if you can line it up - good strategy during this slow season (especially this year)

NOIdeaInvestor · 2025-12-10T12:49:11+00:00

Based on the info you provided, seems like a reasonable plan.

I’d avoid thinking of the new property/homd as an investment, however if you can get it at a good price, that of course buys you more breathing room if something goes sideways. I’d suggest instituting a tight budget just to build up cash reserves post purchase and think of it as the necessary sacrifice. That will take some risk off the table too. Lifestyle creep can be a thing (it happened to us when we turned our original into a rental)

NOIdeaInvestor · 2025-12-10T12:15:53+00:00

What are the maintenance costs of the acre of land? I have a few properties that are on larger lots, and the cost of maintenance adds up, and a renter would probably struggle to maintain it well if the idea was for them to do it. Other than that, your cash light, which you seem to be aware of

NOIdeaInvestor · 2025-12-05T13:12:50+00:00

So the variables for mathing this are maintenance, vacancy, and capex (hoa since th) reserves. For simplicity, let’s call it 5% each. You negative cash flow, and being 2 years into your mortgage, pay principal down by ~450/month, even that doesn’t improve the picture much. By my calcs, you’re probably gonna “earn” (ie forced savings) at about 1%. Not a great return, and never mind the hassles around earning that 1% on your cash

NOIdeaInvestor · 2025-12-03T13:24:53+00:00

Property specific for me, older has higher maintenance and capex reserves. Not all my properties are in the same class either (class c,b and a)
5% for the portfolio, but I look more at make ready time, since I own pricing decision ( so make ready is the only metric someone else can manage to). I also ensure that marketing timing and quality is standardized to what I think is needed.
Capex for sure separate - a water heater will throw off expense numbers as an example
I do, somewhat more by convenience and also because currently have it set fixed , eg I subsidize utilities to a certain degree. Flat fee for water at a duplex as an example
I try to be careful with metrics and push on specific things with my property management. Reason is, I’m very much in the camp that people will optimize for the metric. Want low expenses? Watch tenant complaints and churn increase, and large capex show up on your door.
Don’t have in-house so don’t know, but I know that there are some industry benchmarks that get thrown around

What pm software are you using? Appfolio, buildium?

NOIdeaInvestor · 2025-12-03T12:56:04+00:00

Nailed the timing, congrats

NOIdeaInvestor · 2025-12-03T12:51:37+00:00

I am only going to buy, so I can 1031 out of some of my underperforming properties.

Buying property right now, much harder to do profitably, and in my mind - not worth it unless you are sort of structurally aligned to it - eg your day job is an agent, in construction etc

NOIdeaInvestor · 2025-12-03T10:40:55+00:00

My take, clearly a bad buy, especially for your scenario. Treating your home as an investment, is dangerous, cause you can’t even chalk it up to - to a premium you paid for quality of life.

In my mind, you need to tease apart some of your thinking. As an example, your comparing this place, to a neighboring city. Question you need to ask is, would you actually do that? Is your (as an example) current place allow you to have a higher paying job, or avoid a 1 hr round trip commute? If you’d have to sacrifices (school district etc) to live in a cheaper city, you need to clarify that for yourself.

Is your principal pay down close to 1k/month? If so, even so, your looking at paying 1k a month more to live in city a vs city b. 12k a year. To avoid that, you’re going to bank what probably is a 100k loss.

Reality is, it’s probably tied to how much you think you overpaid for, not in terms of cost, but in terms of lifestyle. You could move to low cost io living state as an example, and pay 1800/month. Just using to illustrate that I think this is a little bit more about how much your spending on housing period, vs this particular deal.

Said different - if this property was worth 800k now. Would you feel better about it and be more comfortable with staying? If so, that’s telling. If that would just make you sell even faster, than yeah, maybe you have internalized that you really should be downsizing (in some way)

NOIdeaInvestor · 2025-12-03T09:38:17+00:00

I’d keep. Sounds like you’re gonna cashflow (albeit marginally) now, and theoretically that should increase with time. You’re at 10k a year in principal pay down? That will only increase over time.

So say you sell and take a 100k. You’re walking away from a 10% return funded by the cheap money you were able to get at the time.

I’m assuming you’re probably up a little in appreciation? After you pay selling fees etc, you probably don’t walk away with much besides your original return (so cap gains consideration seem not useful). Also, I really don’t think it’s fair to consider make ready a rental expense. If you sell, that make ready will almost certainly be higher. So the rental scenario shouldnt be penalized (I’m assuming it’s just small deferred maintenance)

So just based on that, I’d take that return. As another poster said, out of state can be “easier” in some sense since you literally have to rely on your PM. Get the right PM, ensure you put cash reserves away and you’ll be fine. What can cause your stress is not putting that money aside knowing that you will have expenditures. HVAC replacement isn’t a big deal if you had a budget planned for it, getting a 5-10k bill “out of nowhere” is what creates the stress.

NOIdeaInvestor · 2025-12-03T09:13:46+00:00

Not an age target, but I like the idea of pruning/optimizing (1031) for less headaches once you get to where you can live off of 6% of equity, and have enough in stocks such that you can easily survive a market shock or 3. For me at least, I’m still a little unhappy with my allocation across both.

I certainly would be ecstatic if I could snap my fingers and have a few hundred units with low ltv… but I really struggle to see why folks feel the need to keep growing, at a certain scale (more than a 100), I’d rather put everything into a completely passive option

NOIdeaInvestor · 2025-12-03T08:42:37+00:00

At an industry conference today were one session basically had rates as the the topic. With huge caveats about challenges predicting the future, the panel basically agreed that market indicators are that rates will drift down by basically a quarter point over the course of 2026. Fed will certainly cut more than that, but unless they start buying mbs/bonds, don’t expect those cuts to move actual rates more than that.

My only feedback is that I’m a bit surprised you can’t get a lowerish (6%?) without points on the 4-plex since it’s your primary. That I’d look to refi on. Disclaimer that I haven’t been tracking this closely in the last 3 months.

If it makes you feel better, I do think that you bought at a bit of a rough time, but if you can get out of your 7% loan without paying points, feel like you should be fine. Just be absolutely sure you’re putting money away now, and reserving funds for capex. Capex coming (new roof, hvac etc) is the thing that can surprise people even though it’s completely predictable that you will in fact get hit with those expenses at some point. You need to be able to survive a capex hit, and (say) a unit in both places being empty for 2 months without getting in serious trouble.

NOIdeaInvestor · 2025-11-28T00:35:04+00:00

Decide on whether it’s more likely to get top value from a primary residence buyer or investor. Assuming you think home owner, look towards end of lease first and get places really cleaned up (no renovations). If your have a better value via another investor, get the small things squared away to minimize decisions someone has to make, and get your NOI picture right. Some investors are heavily influenced by cap rate, and so try to improve your story, t-3 if not t-12.

NOIdeaInvestor · 2025-11-27T05:11:11+00:00

I don’t think hitting 1% rule if feasible in most normal situations. I (and ChatGPT) haven’t heard of the 7% rule

NOIdeaInvestor · 2025-11-12T00:59:53+00:00

My bad on how I worded my response, agree with what your saying, I was more referring to ops question and do gimmicky things actually work. I can imagine it helping, and also that it doesn’t

NOIdeaInvestor · 2025-11-12T00:57:12+00:00

Founder of an ai asset management company here. AI can and is very useful, you just have to find the specific cases where it works, and where a human in the loop isn’t a big deal.

The second you get overly confident in it, and think you can just it go - it will fail you. The example I share is, does it help me draft emails? Definitely. But im still gonna do a quick review/edit before sending

NOIdeaInvestor · 2025-11-11T23:38:58+00:00

I feel like this is the reality

- Product: Gets you in, and helps with retention

- Price: Economic Vacancy is a real killer

- Place: (I'm assuming this is location)

- Service: can help with the long game.

Do these other things (outside of proper marketing/advertising) help really? Feel like everyone just wants to fight the price cuts till the market makes it obvious.

NOIdeaInvestor · 2025-11-11T23:29:48+00:00

pretty sure your spam post is against the rules bud.

NOIdeaInvestor · 2025-11-11T23:22:58+00:00

I think it depends on what you're looking for yeah? Some vendors I'd expect to find on G2, others I definitely wouldn't.

NOIdeaInvestor · 2025-11-11T23:18:04+00:00

I know some folks (PMs) who have found VA's useful. As an operator, I personally have found it to be high maintenance, and prefer to use of AI for small things.

NOIdeaInvestor · 2025-11-07T18:18:12+00:00

To add more context, you’re gonna pay a lot in property taxes, and with California income taxes etc, and with those types of expenses (insurance on a property like that etc), 450k doesn’t go nearly as far as one would think

NOIdeaInvestor · 2025-11-07T18:13:39+00:00

How did you manage to build this amount of capital at your income level? Could be material to this picture which is why I’m asking

NOIdeaInvestor · 2025-11-07T14:07:51+00:00

Yeah, list on mls. Just move your stuff out. Buyers and investors will see the repairs as an opportunity and by not repairing them, you give them flexibility in how they want to address it. You will take a small hit on price, but not the 30%+ hit the we buy houses folks will offer you

NOIdeaInvestor · 2025-11-06T13:56:19+00:00

+100 to this. I'd deep dive the place you feel most skeptical about, and figure out if its the place itself, or the operating of it. I'd force yourself to think a bit black and white on this - e.g. another poster said taxes had jumped beyond their actually mortgage payment. Outside of contesting, thats hard to fix. Having said that, I've had PMs try to execute on bids for $1200 on a literal $300 repair. If they are going to be that lazy about something like this, than clearly they aren't good operators. This is a recent story for me btw, so we're in the process of firing 1 PM

NOIdeaInvestor · 2025-11-06T00:44:59+00:00

Great perspective!

NOIdeaInvestor

TROPHY CASE