Over the past few years, the St. Louis Board of Alderman have debated the prospected of a vacant property registration system numerous times. One bill almost passed about a year ago. Not taking no for an answer, Alderwoman Kacie Starr Triplett brought the issue back up recently. The new bill corrected many of the issues with the previous versions, but many in the real estate industry felt the bill still had unfair aspects.

Apparently, the Board of Alderman did not agree. I have been unable to officially verify this, or who specifically voted for it, but the bill passed this morning. From now on, whenever a property is vacant in the City of St. Louis for at least six months, and has recorded code violations, it must be registered with the City. The owner must provide their contact info and pay an annual $200 fee.  The provided information will then be placed on a  publicly available database. There will be some exceptions to this, but I still don’t know at this point if there were any last minute alterations to the bill before it was passed. Check back for more details and implications soon.

For more, check out the official Bill #322 website.

A drive down the streets in the City of St. Louis after dark can be a telling thing. Some streets that seem great during the day show a different face at night. One of the most telling things about an area during the night is not the curb appeal of a house, but the quality of  lighting along the street.

As a property owner, you don’t really have much too say about the streetlights, but lighting your own property is totally within your control. Having a reasonable wattage light fixture on your porch and/or in other places in your front yard can do wonders for not only your property, but the entire block. The more houses on a street with good lighting, the safer the street feels.

Better lighting also makes it harder for would-be burglars and robbers to hide in the shadows. I encourage you to leave these lights on all times after dark, whether anyone is home or not. Perhaps install a light sensing fixture that turns itself on. If you use something like that it conjunction with a florescent light bulb, the costs will be low too.

I tried to take some example pictures of this affect for comparison, but nighttime pictures are a little tricky to get perfect exposure-wise. If you won’t take my word for it, drive through a few neighborhoods after dark for yourself sometime. I think you’ll agree, a few lights make all the difference.

When renting apartments and selling multi-families, I have never really been able to figure out which people prefer: a first or second floor apartment. On one hand, the first floor apartment is usually easier to move furniture into and doesn’t require you to climb a flight of steps every time you come home. On the other hand, second floor units are usually safer because the windows are not reachable from the ground. They also tend to be quieter since you don’t have anyone above you.

My assumption has always been that the preference is slightly in favor of upper level units, but I am curious what you think. Which do you think is better? Please feel free to share explanations in the comment section.

If you’re new to landlording or could use a refresher, the University of Missouri St. Louis will be holding a 6-hour Landlord Training class this March.

Here is the basics on the course:

The University of Missouri–St. Louis Division of Continuing Education and its Center for Entrepreneurship & Economic Education announces the Landlord Training Program, a two-day, six-hour program leading to success in the rental housing business.

The program is from 6:00–9:00 p.m., Thursdays, March 4 and March 11. The seminar will be located in Clayton, MO, at the World Trade Center Building, Room 1009, 121 South Meramec (at Bonhomme). The registration fee is $70, which also includes a 500-page landlord resource book. Registration deadline is March 2.

Whether you’re a first-time investor or an experienced landlord, this course will teach useful, practical information that will help improve the bottom line. Participants will learn how to determine if a property is a good investment, find and select quality tenants, write proper leases, avoid housing court, and protect the investment. A Q&A session at each seminar will further aid the learning process.

Instructors include Don Benski and Tim Kanke of the St. Louis Real Estate Investors Association and Joseph O’Connell of the St. Louis County Neighborhood Preservation.

For more information, or to register, please visit the Landlord Training Program Web site or call (314) 516-5974.

If you have ever rehabbed a house, rented out an apartment, or even simply lived in the City of St. Louis for any period of time, you are well aware of the ridiculous amount of red tape that the City throws up around just about every issue. A lot of it is necessary, but the implementation has always been wanting.

The Post Dispatch featured a very interesting article on this topic in this morning’s paper. It involves a property at 3500 Missouri in Marine Villa that the City took from an owner. If you haven’t checked it out, its worth the five minute read.

St. Louis City takes 3500 Missouri away from owner

One of the most important things every investor needs to do before purchasing a property is a profitability analysis. At first glance, many deals seem great, but upon further review turn out to be less than ideal. You just can’t tell for sure until you do the numbers. That’s where this spreadsheet might come in handy.

If you have Microsoft Excel (or OpenOffice), this financial spreadsheet will do the analysis for you.  I find particularly useful when scrutinizing deals as you can quickly determine if a property is worth further research by simply plugging in a  few numbers. Simply enter the rents, expenses and financing and it figures out how profitable the investment will be. Of course, this is a very simplified spreadsheet. It does not account for major repairs, appreciation or tax benefits. However, it should give you a realistic snapshot of an investments potential.

I like to pay particular attention to both cash-on-cash return, which consider real-world financing scenarios, and the always popular cap rate.  The percentage cash-on-cash return tells you how much money you will get back in a given year for the money you put it, while the cap rate is the yearly return assuming the property was purchased with cash.

You can download this spreadsheet for yourself by clicking on this link: Rental Property Analysis. Hope it comes in handy.  If you have any questions or comments of the spreadsheet, please contact me.

Filling vacancies in your apartment units quickly can be the difference between success and failure with real estate investments. Looking for tenants anywhere you can find them increases your odds of success, but never forget that not all situations are equal. One area to be especially careful of is when working with renting to family members. I am not talking about renting a unit to a member of your own family, although that can be an issue as well. I am referring to the situation where you have a vacancy in your upstairs unit and the downstairs tenant refers their cousin Billy as a potential renter.  Should you run across this situation I just have one simple thing to tell you: “Be careful.”

The first thing to ask yourself is whether the tenant doing the referring has been a good tenant. If they haven’t, a referral from them should be avoided. If they have been exemplary, it might be worth giving the person a shot, but make sure you run your normal background checks and that the person truly qualifies.

Even if they do, just use good judgment on how you handle things. I have been witness to a few horror stories where two or more units in a building were rented by family members, who seemed to think that since they knew each other that they could do anything they wanted. Keeping discipline in an apartment building can be a challenge in an situation, but things like these can make things even more murky.

You also can face problems if the referrer or referee family member defaults on their lease and you have to evict them. Some tenants might not blame you at all if you evict their relative and they deserve it, but others might walk out on their lease along with their departing kin.

The morale of the story is simply to be aware that things can be too to be true in the world of property management. Should you encounter a situation such as this, just make sure you consider the baggage that comes along with taking on related tenants.

Being a landlord or rehabber can be a tough business. Juggling tenants and repairs are a struggle in their own right, but sometimes the most stressful things can less tangible. For instance: keeping up with occupancy codes. And as of late, the City of St. Louis has been rabid in their enforcement.

In the past couple months I have personally experienced incorrect condemnation warnings and heard similar stories from numerous clients. As any City-investor knows, just about any property in a Housing Conservation District needs to be inspected by the City of St. Louis before it can be occupied. These inspections need to occur whenever there is a change in property ownership or a new tenant moves in. Simple enough right?

The problem is that one of the ways the City polices these changes is utility bills. If the gas, electric or water bill user switches at a property it is often as evidence of one of these changes. A warning is typically sent to the property owner followed by eventual condemnation if the owner does not comply. And when accurate, I have no problem with this. The trouble is that the system is not always inaccurate.

Take my situation for example. I rehabbed a house during the fall and just finished with it a little over a month ago. Nobody lives in it and it is not under contract yet, but that doesn’t stop the City from sending me an ominous and threatening letter about getting an inspection. But since it is not occupied yet I am under no obligation to get the inspection. I know this and their language doesn’t frighten me, but it might be different for others.

A more drastic example is from one of my clients buildings. I represented him in the purchase of the property last summer and have been leasing apartments in the building for him. The property is a 12-family, and it currently about 50% occupied. All occupied units have had proper inspections, but the vacant units are being inspected after each is fixed up and occupied. As long as nobody lives in any of the uninspected units it should be no problem right? Tell that to the tenants that got a condemnation notice on their door the day before Thanksgiving. I don’t manage the place, but got a call from one of the tenants I placed in the building that night and he was anxious to say the least. I explained the situation to him and it all eventually worked out just fine, but neither I nor the property owner should have ever been placed in that situation.

Since there is no obvious fix for this situation, the best advice I can give is to understand your rights and responsibilities and keep up with them. In the event of an issue, if you are honest with your tenants any major issue can easily be avoided. Just make sure the communication are always open or you could find yourself in the middle of something that is a little more difficult to dig your way out of.

For the basics on these inspections check out the St. Louis Housing Conservation website.

I had a little debate with a client yesterday about ceiling fans (Don’t I lead a glamorous life?), and it has me wondering what most people think of them. When buying a house or renting an apartment, what are your feelings towards ceiling fans? Are they a perk or an eyesore?

I have always been a supporter of using fans myself. In my own home, I use them often as they make the house more comfortable. They aren’t exactly the most beautiful things in the world, but their functionality more than makes up for it. I have always assumed this was how most people felt, but when my client told me that he hated fans and took them out of his home and never installs them in his rehabs, I started to wonder if this was a common held opinion. I’ll leave that choice up to you.

So what do you think of ceiling fans? Please fill out the poll below and fell free to elaborate in the comments section.

It’s 5:30pm and you just got home from work.  Your iPhone alerts you to an email you just received from a perspective tenant. It just wait until the morning can’t it? Not if you want to rent your unit to a good tenant ASAP.

If you have been renting  apartments for long you know ow annoying it can be trying to get back to all the email and phone inquiries. I do it for a living and even I have to fight the itch to put it off. Its tough, but that doesn’t mean you can afford to sit on your hands. Vacancies are up right now and ever minute counts. Obviously the more time that passes, the more likely that tenant will find a unit somewhere else. But there is another reason to get back quickly:  It’s your first impression.

All landlords screen their tenants to some degree (if you are smart you do a full screening), but most of them fail to realize that good tenants screen landlords as well. A quick response makes them think you are on the ball, but if it takes two days to get back they might be a little more skeptical. In their mind, that might mean that it will take two days to get a response to that broken furnace.

Obviously this is presumptuous, but perception is reality when all you know of someone is the first impression. People like good service and all tenants (good and bad) want to feel like their prospective landlord will take care of them if something happens with the property.

You don’t necessarily have to run off to a showing at the drop of a hat, but when you get back to a prospect quickly it lets them know that you are attentive. Tenants with good credit and income know they are every landlords dream. Just keep in mind while you are searching for this dream tenant that these people are in demand. You need to try to impress them. And gettign back to them quickly is a good start.

Landlords of Missouri, it is time to celebrate. Common-sense has finally won the day in terms of our eviction law. From now on, when an eviction occurs, there is actually a legal pathway to removing the tenants property thanks newly signed Senate Bill 231.

In the past, when evicting a tenant (even the really bad ones), the legal rights of landlords to remove a tenants belongings out of the property were murky at best. Even weeks after a court-order eviction was enforced, tenants could technically sue you if you removed their belongings. Since evicted tenants aren’t usually on the best of terms with their former landlords, this was more than a casual concern.

One loophole many landlords used was to move all the tenants belongings outside the building and into the yard. Still on the property, but not within it. The trouble is that many cities, such as St. Louis, responded by passing new laws that would impose littering fines on landlords who did this. A valid point, but this left landlords in such areas without a legal recourse to remove remaining personal property.  This has been a known issue for many years now, and despite failed attempts to pass a bill in 2007 and 2008, the battle was finally won this year. Here is the official summary of the signed bill:

This act provides that except for willful, wanton, or malicious acts, landlords are not liable to any tenant for any loss or damages to household goods, furnishings, fixtures, or any other personal property left at or in the dwelling by reason of the landlord’s removal of the property under a court-ordered execution for possession of the premises.

If, after the sheriff completes the court-ordered execution, property is left by the tenant in or at the dwelling that is identified as the property of a third party, the landlord shall send notice to the third party by certified mail with a return receipt requested. The third party has the opportunity to recover the property within five business days of the date notice is received. If the landlord is unable to notify the third party, the landlord may dispose of the property and is not liable for the loss or damage.

Governor Jay Nixon signed the bill in early July, but it officially went into affect as of August 28, 2009. While you still can’t just set personal belongings on the curbside, passage of this bill means you don’t have to. If you follow the procedure laid out above and the tenant never collects their stuff, you can either donate it to charity or toss it in the trash.

It took far too long to get this passed, but for once the rights of landlords are being protected. You may now breathe again. A big thanks to all those out there (I know there are many) who made this possible.

For more on the bill, including the full text, check out the bill homepage.

When it comes to trees in the city, it is amazing how unaware people are. Take the tree lawn in this picture. These recently planted maple trees are wrong on so many levels: too large a species to be planted so close to a building, too small a tree-lawn to support the tree, and most importantly… they are planted UNDER A POWERLINE!

I’m sure the the City’s Forestry Department has made their share of mistakes in planting trees in the past, but in a case like this, it is pretty obvious that the property owner planted these trees themselves. The thing is, the tree lawn, which is the space between the street-curb and the sidewalk, is a public right-of-way. Only the City has a right to plant something there. Unfortunately, too many property owners fail to recognize this fact. The result is often a aesthetic hodgepodge and possibly dangerous as the tree grows.

The City of St. Louis’ Forestry Department takes care of planting, maintaining and removing trees and other plants in public areas. If you want to do anything in these areas you should contact them. Depending on the season, the response time can vary, but they are usually pretty good about getting to issues in a respectable time after you contact them. Especially when there are safety concerns. If you are curious about Forestry ordinances and programs, they actually have a really good website that is very helpful. You can also request services directly through their site.

Last night at 2am I got a surprising wake-up call: the alarm was going off at my rehab project in Tower Grove South. The police were already there and requesting a key-holder to come over. Upon arriving on the scene I witnessed the sobering site of a backdoor kicked in.

Thankfully, my alarm system did its job. Not only did it run off the assailant without any theft or vandalism (other than the door), it also alerted me to the issue and brought the police on site. I know a lot of rehabbers skimp on installing alarms, and even more skip out on having them monitored, but this is proof positive why you should protect yourself.

Another thing this incident reinforces in my mind is that a hand-lock on a door is very easy to break. On the back door of the property in question, that is all that was in place when we bought the place and I was too lazy to install anything more. It looks like a couple of kicks is all it took to break it. Lesson learned. All access points to any property should be secured with a properly installed deadbolt in addition to a standard lock set. Especially on a vacant property.

If you properly secure your properties upon each visit and make sure there is an alarm system and proper lighting (another thing I didn’t have), the odds of a successful break-in are small. I only had one of the three and I managed to get away with only a busted door, which I was going to replace anyway. Still, its better to be safe than sorry as the financial loss and frustration of a successful burglary could have been a lot worse.

Dealing primarily with the foreclosure market in the past two years, lately I have been involved in many Fannie Mae transactions as both a buyer’s agent and a buyer. Unfortunately, although they are often some of the best deals on the market, that fact might be changing. If you are a real estate investor, Fannie has now stacked the deck against you. In the often misguided attempt to encourage home ownership across the United States, from now on, when a Fannie Mae foreclosure property hits the market, for the first 15 days it is listed no offers will be considered from investors. NONE.

When purchasing a HUD property, it is not uncommon for bid preference to go to owner-occupants. Especially in the first couple weeks of a listing. But they still consider offers from everybody. Fannie Mae, on the other hand, has been more even handed in their approach. Unofficially they might give some preference to owner occupants, but I never had an issue with it. Now, they suddenly won’t even look at your offer. This 180 in policy has me scratching my head to be honest.

The first property I encountered this on was actually a 4-family, which is even more odd. Most 4’s are not owner-occupied yet they are making this thing sit. From a business perspective, even if no owner-occupant buys the place before 15 days, this is going to really hurt all the proactive agents and buyers who make solid offers within a day or two of the listing coming on the market. I don’t know about anyone else, but I can think of a god place for Fannie to stick their new policy. Capitalism at its best:(

Frequently visiting vacant, sometimes unsecured buildings, I must admit that at times I have been quite uneasy when entering a property. Especially by myself. That’s why I bought a mace gun.

Of all the many showings and preview showings I have had in the real estate business, I have only twice ran into someone in a property. Both times I was by myself and both times the other person was more scared of me than I of them (you know, like with bears). Those run-ins, however, have made me increasingly wary of such situations. As a result I decided I need to protect myself in case I run into someone not so timid. I considered carrying a pistol and getting a concealed carry permit, but after careful consideration, I decided the potential for shooting someone in a non-confrontation closed-quarters accident or freaking out a client just weren’t worth it. I am quite familiar and comfortable with guns, but they don’t seem to be the right answer.

When considering traditional mace, I the range seemed far too short and the potential for an accidental discharge too high. I was about to opt for a can or bear mace, but I ended up finding this mace gun instead. With a range of almost 25 ft, great accuracy and a virtually idiot-proof design it seemed like the thing or me. I ended up ordering one off of eBay for less than $50.

The gun comes with a mace cartridge and a water cartridge for testing. In my tests I was surprised how far the liquid shot and for have long the discharge lasted. It comes out for a good three seconds, which is plenty of time to hit your target regardless of the situation. There is also a small LED flashlight built into the gun, which turns on whenever you touch the trigger. It could be a tad brighter, but it is a welcome addition for use in dark buildings.

Overall, I would say this is a great buy and a true must-have for anyone who shows buildings and apartments for sale and rent. Your not going to take down a gang with this thing, but the piece of mind it gives you is well worth the $50.

So you’ve approved an application and the tenant wants to sign a lease in a week. Your search for a tenant is over, right? Maybe not. When it comes to renting apartments, until you actually have money in hand its never a sure thing.

If you’ve rented many apartments in the past you have probably been skunked by a few perspective tenants. You make arrangements to sign a lease only to find out the morning of the big “signing day” that the tenants parents don’t want them to live in “that neighborhood.” And it always seems like in the interim between approving the app and getting stood up, there is always a couple people you turn down for showings. You loss your time invested and the lost rent.

The only safe way to protect your position is to never quit showing the apartment or taking apps until you have a signed lease or at least a deposit. Tell the applicant that you will only pull the apartment from the market if they put down a nonrefundable deposit. The amount depends on the situation, but someone is a lot less likely to take advantage of you if they could lose $200 because of it. You don’t want to scare people away, but you need to put such measures in place to prevent people from wasting your time.

In this business, time is money as every additional day without a tenant is a loss. Being considerate and reasonable does not mean you shouldn’t protect yourself. If you put these protections in place your pocketbook will thank you.

Trying for something a little different on your rehab, but limited on your budget? Here is a idea I recently used in rehabbing my office for my door handles. I was trying to mix the existing historic features of the space, while going for a contemporary look at the same time. I made the custom doors myself, but when it came time to find a handle that actually matched what I was looking for I was hit with a case of “sticker shock.” At over $100 a piece for the contemporary door pulls I wanted, I was looking at over $600 to use them on all my doors.

Sometimes thinking outside the box can save a lot of money. I had heard about people using handicap bars for door pulls so I went to the hardware store to check them out. Not only were they only $25 a piece, they looked very similar to the overpriced hardware I was finding online. I ended up buying all six handles for only $150. I have had them in place for a couple of months now and I couldn’t be happier.

One person’s flower is another’s weed. There is no plant more perfectly matched for this scenario than bamboo. Attractive when used properly, and growing in popularity with the Green movement and the increased use of bamboo flooring, this plant will grow out of control if left unchecked.

Planting bamboo will pay quick dividends as it is a very fast grower. Who doesn’t love a little greenery on their property? But over the years that follow you will be forced to battle against the spreading root system of the shoots that attempt to spread the planting area constantly. Much like ivy, if you drop your vigilance for one season and all hope could be lost.

Once the bamboo starts to take over, you are stuck. The only way to really get rid of it is to dig it all up by the root. And that will still require repeated efforts. There have been some claimed successes with using Roundup, but the results are far from certain.

In addition to filling your yard, fence to fence, with bamboo, these planting also have additional side effects. For starters, they don’t recognize property boundaries. When that bamboo starts popping up in your neighbor’s yard, its safe to say your relationship just took a turn for the worse. Another side effect is that the roots of these plants often find their way into the sewer lateral of your property; clogging the flow of refuse and possible breaking the clay pipes apart.

There are steps that can be taken to prevent the future spread of bamboo plantings beyond their intended area, but why try it? Digging a trench around the plants or installing a metal or plastic divider in the ground to stop the spread of roots is not only a pain, it is also not a surefire method of prevention. There are plenty of other attractive plants that can provide the beneficial results of bamboo without all the messy troubles that accompany it. Think twice before planting it.

Is there a street light out on your block? Is the grass at that vacant property across the street ridiculously tall? Never fear, there is an easy way to tackle the problem: Report it to the Citizens’ Service Bureau (CSB). Any violation of maintenance request in the City of St. Louis is usually best remedied by contacting them. They will then forward the issue to the appropriate City Division if the issue needs additional attention.

I have used this service many times, but I was particularly happy with a recent issue I had. This Sunday I noticed that the street light in front of my office on Gravois was out and that the long-existing crack in light poll itself was spreading. I reported the issue to the CSB via their website that night. Tuesday morning a street crew pulled up and got to work. Not only did they fix the bulb, they actually tore out the entire poll and replaced it. Only 48 hours after reporting the issue, it was fixed. What service!

Not everything is taken care of so quickly, but it is a great first step to tackle problems. If you are having a major problem, it might also help to encourage some of your neighbors to report the issue in question as well. The squeaky wheel does get the grease after all.

To contact the CSB, you can call them at 314-622-4800 or report the issue electronically through their website. It just takes a few minutes and its well worth your time.

The poster-boy for real estate fraud in St. Louis has finally been sentenced. Doug Hartmann, of DHP fame, was found guilty in April of siphoning off $35 million from real estate investors over the years. You’d think this guy would get put away for a long time. Instead, he got two years in federal prison. Hopefully the civil courts are far less kind. Link

Let me go on the record as saying I love historic architecture. It humbles me to think that with all the technological advancements of the last 100 years, the buildings of 100 years ago display a level of craftsmanship that seems to be lost in the modern day. That being said, our current system of preserving these historic structures misses the point entirely

For an example of what I mean, look at the Local Historic Districts in St. Louis. Some prominent neighborhoods in  these areas include: Benton Park, Central West End, Benton Park West, Fox Park, Lafayette Square, Shaw, Skinker-Debaliviere, Soulard, McKinley Heights and Hyde Park

Some truely great areas (some still not so great if we are being honest). In order to maintain the historical integrity of their building stock, the residents of these areas, at one time or another voted to create a local historic district. If  you want to rehab a building or construct a new one in any of these areas you have to follow a certain set of historical standards. Sounds like a great idea, right? If only it were that simple.

Take a closer look at what is going on in just about every one of these areas and you’ll be scratching your head. For example, somehow, vinyl siding is considered historic. I’m not sure when it was invented, but something tells the time line is a bit off. On the other hand, when it comes to windows, if you use vinyl, you’re risking the wrath of the Preservation Board. Same goes for most metal windows. They want you to use wood windows to maintain the historical appearance of the structure. The trouble is, the wood windows of today, unless you spend a fortune, are junk. They also require far more upkeep (painting) to maintain this appearance. Why not allow certain varieties of aluminum windows or colored vinyl windows? From the street you can’t usually tell the difference and they look better for longer. Try telling that to the Preservation Board.

There are countless examples of other similar oddities in the historical guidelines, but even more grating is the unequal enforcement of these rules. One rehab project might feel the full force of the might of the Preservation Board while the property owner next door gets away with putting up vinyl windows, glass block basement windows, fuchsia paint and a wolmanized wood front porch. It makes no sense.

The real goal of these groups should be to maintain a level of quality construction in the area, not randomly enforce some erratic list of do’s and dont’s. The materials and needs of today are not the same as they were 100 years ago. To blindly follow tradition for traditions sake is counterproductive when attempting to build a strong, modern community. These rules also prevent quality developers with more contemporary tastes from investing in the area. In other urban environments you might witness beautiful historic structures next to quality contemporary buildings and the result is often quite easy on the eyes. Why St. Louis seems so against this type of development is beyond me.

Running into issues with historic rules myself, and hearing countless horror stories from clients and acquaintances, I must admit that these rules often force me to think twice before considering any project in one of these neighborhoods for myself or a client. When great value properties routinely pop up in neighborhoods such as Tower Grove South and Tower Grove East, both of which are not in local historic districts, I have to wonder why I should buy in an area where I have to jump through so many hoops to get anything done. In this, I believe I am not alone.

This fact had a significant impact in my choice of Tower Grove South for the location of my last two rehab projects and will continue to do so in the future. Over the next few years I have to wonder if the negative side-effects of these good-intentioned rules might continue to become more and more apparent. Only time will tell.

Check out the St. Louis Cultural Resources Office for more on local and national historic districts and landmarks.

One thing I have always taken for granted in real estate investing is the apartment lease. Just after getting into the business I got a hold of a great lease and I guess I have been a little spoiled. One clause I am particularly fond of, which seems to be lacking for so many leases, is the right to show a unit before the outgoing tenant actually vacates.

While this might not be feasible in all situations, I have found it very helpful. When a tenant gives notice that they are moving out, I like to immediately get started putting a marketing package together for the unit: Pics, details, flyers, even video. By putting these up on craigslist and backpage early, as well as putting up a sign, you can get a jump on the process of filling the unit.

Depending on the tenant, showing the unit can be a bit of a hassle, but at the very least you can compile a list of prospective tenants and shuttle them through once the unit is vacant. In the lease I use, the clause that makes this possible allows for the landlord to show the unit within 30 days of the end of the lease as long as the tenant is given 24 hours notice. I try to avoid bringing people through too often, but if done tactfully, it is a great way to save money by limiting the time a unit is left idle. If this clause isn’t already in your lease, make sure you add it or find one that already has this point covered. You won’t regret it.

So your sewer line has backed up and a simple Roto-Rooter cleaning did not solve the problem? You might have a hefty bill on your hands if something significant is wrong with the sewer lateral. Or then again, with luck, maybe not.

If the issue with the sewer lateral turns out to be in a certain type of easement or the right-of-way such as an alley, sidewalk or tree-line, the City of St. Louis might cover the costs of repair. To determine your eligibility, you’ll need to hire a licensed plumber (yes licensed) to determine the cause of the potential break in the line. If they find that there is a break in the line in a “city covered” area, have them write up a ticket indicating this in addition to marking the spot in the yard where the break lies.  If the break ends up being your sole responsibility you are stuck with the whole cost of the fix. Before going ahead with traditional methods of repairs, you might want to give trenchless repair a look first. Costs for such methods can be as much as 50% cheaper.

If  the plumber determines the break is in the right-of-way, the next step is to call the St. Louis Citizens’ Service Bureau. Specifically, the Street Department sewer lateral desk at 314-647-3111 (x1008 ). They will help make arrangements to have the Plumbing Inspector do a site inspection. They will probably request supporting evidence such as the write-up from the plumber and pictures or video from a sewer-scope inspection, so be prepared.

Once the inspector visits the site, assuming your real estate taxes are verified as paid in full, they will then make arrangement for the repair. If the repair is considered to be an emergancy, the work will usually be tackled within a week or two. If the work is determined to not need immediate attention, however, you will be put on the “wait-list,” which could be many months long. But since you’re not footing the bill, its probably best not to look a gift horse in the mouth.

Adding a second bathroom or garage to a house can really add to the value of the property. In general, anything that adds to the functionality and convenience of the property will have a positive affect on the value for sale or for rent. Of course, there are times when these investments don’t work out so well.

For example, take a look at the garages in the picture above. The builder of this small condo complex must have thought they were really adding something special here. What property owner wouldn’t love a two-car garage of their very own? But how functional are they? Consider that the garage opening is very close to the wall that marks the rear of the property line. The remaining space is the size of a very small alley. Tight, but enough for smaller cars.

But there is more. This builder also decided to add some nice decks on the rear of the property too. You can’t really see them in the picture, but they are pretty nice. As great as they may be, the support columns for these nice decks ended up being placed on either side of the garage doors. The result is nearly two additional feet taken away from the already small alleyway behind the property. I have a small car, but I think I would have a hard time getting into that garage. I can’t imagine how tight it would be for even a mid-sized car.

So what is the result of all this money spent by the developer? A virtually useless space. For parking anyway. Of course, this was an original building adapted for reuse so they couldn’t exactly move the building over, but one has to wonder what they were thinking when they made this design choice. I don’t want to say where this building is, but I do know that they have had a heck of a time selling these units. And they were available long before the economy started to sag. Could this issue be driving away buyers?

Other common examples of horrible functionality in properties are poorly laid out bathrooms, a lack of closets, inadequate duct work for efficient heating and cooling… I could go on forever. When you are dealing with an original setup in an old building you’re going to run into limitations, but I can’t tell you how many houses and apartments I have seen with these issues after a complete rehab. Its as if common sense didn’t exist. If you can’t add a usable second bathroom on the first level of a house, just don’t add it. You are going to waste more money making a failed attempt than you stand to lose at resale or renting without one.

If you’re using an architect and notice they are making some odd choices such as those mentioned above, it might be time to get a new architect.Likewise, if you have run into these problems on things you have designed yourself, it might be time to consider hiring a professional. Doing otherwise can land you in a nightmare scenario of profit loss and frustration. Its not enough to simply add a bigger closet or kitchen. If it’s not functional and efficient, the investment could be wasted.

Is the sidewalk in front of your property a little worse for wear? All the freezing and thawing of Missouri weather along with additional help from ice melt, tree roots and good old time have a way of doing that. Unfortunately, if its time for replacement you might have to eat the bill. Or maybe not.

Legally, its the property owners responsibility to maintain their sidewalks. They are the one who can get sued if someone cracks their head on a broken sidewalk so that stands to reason. If your sidewalks are buckling and shifting, it might be a good idea to protect yourself and go ahead with replacing them in the spring. But before you break out the checkbook, make sure to sift through your options.

In the City of St. Louis, there is a program in which the City will split the costs of sidewalk repair in half with the owner.  The 50/50 Sidewalk Program applies to single family homes as well as multi-family properties as large as a 4-family. There are, however, a couple of catches: the property has to be owner-occupied and there is a waiting list. The wait averages between 1 year and 18 months. If you don’t live in the property or can’t wait you’re out of luck on this one.

Still, there may still be hope. More than that actually as another option could even be cheaper. If any city-owned tree between the curb and sidewalk is the direct cause of damage to the sidewalk in question, the city will actually foot the entire repair bill for the affected area. Even if the property is a non-owner-occupant investment property. They won’t pay for any part of the sidewalk damaged by other means, but they will cover the tree-affected area. Since a large percentage of damaged sidewalks can be traced back to old-growth trees, there is  a good chance that this might be the route for you.

For more on how to take advantage of these programs take a look at the City’s Sidewalk Repair site. If you’re a landlord  in the mood for having someone else pay your repair bills, you might also want to check out my previous article on lead remediation and window replacement.

Along with property taxes and water & sewage bills, insurance for a rental property is one of the biggest expenses you really can’t avoid. Fortunately, unlike the former expenditures, the annual cost of for insurance is in the hands of the owner.

Considering how important this fact is, I was surprised to learn that I have never really put up a proper post on the blog about this issue. A migrated newsletter article from 2006 is all I have given to the topic. This is one of those things that is so obvious that I assumed I had discussed it. I guess that puts me in the same boat as many property owners. All insurance providers are not created equal.

When shopping around for insurance on investment properties many landowners simply go with the company they are most familiar with. This often leads them the same company that provides their car insurance companies or insurance on their personal residence. But rental and rehab properties are a different animal. Allstate might give you the best price in town on your car, but if they are providing your insurance for your rental property as well you can probably do much better.

In the last few years, for most types of investments, I have had a lot of luck with Shelter Insurance. I admit that I haven’t shopped around to every possible company, but they are usually quite competitive. I’ve always liked the fact that they are willing to give out generalized quotes rather than ask you a hundred personal questions before talking price. I actually just got a updated price list from Greg Tainter and Trent Gaines (636.938.5500) over at Shelter last week:

Use these rates as a point of comparison. If you are paying in line with these prices you are probably getting a good deal. If you are paying significantly more, it’s time to start shopping around. Its not uncommon for property owners to see rate increases on insurance every year, so if you have had a property under a certain provider for a number of years, your rates might be out of line. Even if you haven’t, some companies such as Farmer’s Insurance are notorious for rates almost double those of other companies. If you have any doubts, its worth the time to get a few quotes.

I’ve always had good luck with Shelter, but does anyone else have a good recommendation? Who’s the best in town?

No matter how desperate you are to put a tenant in a vacant unit, you MUST always do a background check. The various services available locally in St. Louis and online are quite easy to work with and you can always pass the buck off to the tenant. If for some reason you refuse to get involved with a paid service there are still things you can, and should, do to check up on the tenant.

One of the best free ways to check up on people is to search through Missouri court records. The Missouri Courts System has a database where you can search this information free of charge. Of course, this system does not reference federal crimes and crimes committed in other states so it is certainly not fool proof, but it never hurts to look.

Another free method of checking up on your applicants is to check up on their employment situation. Request a recent pay stub and followup with their current employer to verify the information they supplied on their lease. On thing to take note of is that you should always call their boss yourself, not the other way around. Since you likely have never spoken to this person before the tenant could simply have a friend call and play the part of their boss. Make sure you verify the business phone number too.

Another free reference to utilize is their previous landlords. No reference compares so closely to your situation than that. A few words of caution. Just like with employment information, it would be quite easy for a tenant to put one of their friends down as a previous landlord. If they have been  prepped they might give a glowing recommendation to a bad tenant. The motives of the tenants current landlord should always be in question too. If the tenant is particularly bad and the landlord really wants to get rid of them, they might give a positive recommendation for the applicant just to convince you to get them out of their hair. Considering these possibilities, this reference check should really only be used to disqualify renters, not support them.

In the end, the best way to make sure you are getting the best tenant possible is to not only verify their referances, employment and criminal background, but also do a full credit check. Most services charge around $40 to do everything and it is well worth it even if you plan on eating the costs yourself. But if you refuse to go that route, at least consider using some or all the optinos above. Renting an apartment is great, but if you aren’t careful it could be more expensive than leaving it vacant in the long run.

Whether you own rental properties, own a home or just rent an apartment, you need to prepare for the increasing colder temperatures coming this winter. If the property will be vacant for an extended periods of time you should be especially careful. Water left in pipes that hit the freezing point could cause the pipe to burst and create a horrendous situation. In order to limit these potential problems, consider the following tips as they apply to your situation:

• Hoses and Spigots – Never leave a hose attached to a water spigot over the winter. Even if you have the supposedly “frost free” kind. This is the most common type of rupture as it applies to just about everyone. Sure its a pain to have to reconnect the hose anytime you want to use it, but its worth it. If you have a shut-off valve in the line leading to the spigot, you should also close that off and open the facet valve to let the remaining water drain.

• Interior Pipes – If you have a property that will be left vacant for an extended period of time over the winter, whether its a rehab sitting until warmer whether or a vacation house, you should consider draining the interior plumbing system. To do this simply shut off the water where it enters the property and at the hot water heater. Then you open the valves on all faucets, especially those in the basement, to drain the system.If you plan on turning off the furnace and or water heater during this period, you will need to make sure you put antifreeze (nontoxic propylene glycol antifreeze) in the toilets and all traps in the system. This is probably overkill for many situations, but if you turn off all utilities to the property it is a must. For a more detailed breakdown of how to accomplish this, check out this site. For most cases, I am a fan of leaving the water heater and furnace on during this time. If you set both to their lowest setting they use very little energy and you can make an argument that this is better for the property. I have found that putting a property at the mercy of the extreme temperature fluctuations of Missouri winters can play havoc on drywall, plaster and flooring in old houses. All that expansion and contraction tends to be rough on building materials. Some might disagree with this assessment, but I have witnessed it first hand.

• Gutters – This one is really a no-brainer, but it is often overlooked. We all know how annoying it can be if your gutters get clogged and overflow or even leak into the house. During the warm time of the year this is always an issue, but at least you can address it in short order. On the other hand, in the winter time it can be a little tougher to do something about. If your gutters are clogged with debris and ice during a freeze you could have major water issues crop up yet have to wait for the ice to melt before you address them. Its not uncommon for this to cause gutters to break off due to the intense weight. Pick a warmer afternoon before the worst of the winter hits and make sure everything is clear and that the gutters are properly secured.

This list of tips is certainly not exhaustive and there are those that might have different suggestions. The main thing is that you appreciate the damage ice can cause to your properties so that you can prepare for it. You’ll be glad you did.

Nothing is worse than an inspection gone afoul. Much less a sewer inspection since replacement costs are so high. But that’s just what I faced last month during the inspection of my recently closed rehab in Tower Grove South. Turns out there were some issues with the sewer lateral we didn’t know about and the buyers would not go ahead with the sale unless they were fixed. The initial estimates for the pipe replacement had me considering walking away, but when I met up with a pipe lining specialist I changed my mind.At this point you are probably wondering what in the world I am talking about. For those unaware, this method of sewer repair relies on cleaning out the existing pipe and lining it with a special polymer to restore the integrity. Some companies refer to this as the trenchless method. You don’t really hear much about this kind of thing much in St. Louis, but when I started to research the topic I found that we are just late to the trend. It turns out that this technique has been popular for years in Europe and in some areas along the east and west coasts of the United States. Its just know gaining attention here.

So whats so special about this stuff? Consider the following:

• COST – For most applications this method can offer pretty significant savings over traditional methods. Estimates to repair the damaged 5 foot long section at my project were floating around $2500 to dig up and replace the pipe. The costs were so high because the damaged section was just outside the foundation underneath a deck. It reach the pipe the deck would have to be disassembled and everything dug out by hand. With the lining method the cost was only $1,125.

• PROPERTY DAMAGE – Not only does the labor involved in traditional methods typically cost more, it also has a tendency of doing a lot of damage to your property. Decks, sidewalks, fences, foundations and especially landscaping often have to undergo significant repair work after digging around them. Since places that need sewer work are typically historic in natures, this damage is a major concern.

Its really a fascinating process too. I wish I had my camera with me while the were doing it, but I will have to settle for describting the process. They started out by cleaning out and prepping the damaged section of pipe with various tools. Once they had the exact dimensions of the area to be repairs they cut a piece of a special tube of epoxy. They chemically treated this tube then managed to get it in place through some miraculous means. Once in place they inflated the tube inside the pipe. The inflated tube was then sprayed with really hot water to start a chemical reaction and then cured for a little over an hour. And that was it.

I really couldn’t believe it work so well, but the pipe is now repaired for less that half the cost and with the same durability as traditional methods. Makes me wish I had heard of this thing years ago. If you are interested in the process yourself, I know there are a few guys in town who do this, but I used Pipe Lining Plus and was quite happy. I actually pulled the diagram above from their site. For more info you can call them at 314-576-6344 or visit their website.This technique has its limiations and may not be right for your situation, but its worth looking into.

If you have any experience with pipe lining yourself please share a few thoughts on your experience.

]]> http://thresholdstl.com/apartments/sewer-lateral-lining/feed 5 http://thresholdstl.com/apartments/habitat-restore http://thresholdstl.com/apartments/habitat-restore#comments Wed, 05 Nov 2008 23:01:15 +0000 Matt Kastner http://stlinvestmentrealty.com/?p=985

Whether you’re looking for a hard to find used item or are just on a budget, there is a great option out there you may not know about. Habitat For Humanity operates a building material supply store at 3763 Forest Park Avenue, which is a great source. They have a suprising selection of merchandise, which consists of both second hand and donated materials.

I was really struggling to find a replacement rear door when I was working on my recent rehab. THe door needed to be unusally thick and an odd size. I also wanted it to have a glass opening in it to open up the room. My door guy was quoting me over $600 for something that wasn’t even all that nice. I ended up finding a great wood door that was exactly what I wanted I Restore. Best of all, it was only $25 for the door. I had to buy a $40 piece of glass to finish it off, but you can’t beat that deal.

If you are looking for unique items or just running a bit thin in the money department this place is worth a look. They also accept donations so if you have materials you salvaged from a project and don’t know what to do with them, you might as well build a little good karma and donate. Its a nice give and take. For more information on ReStore, check out their website.