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Message
Investing in rental property
Posted on 12/26/15 at 4:10 pm
Posted on 12/26/15 at 4:10 pm
So I'm considering buying a house or two with the expressed intent of using them as rental properties. I'm looking for a way to diversify my portolfio without being in the stock market.
Can anyone who owns rental property give me some do's and dont's ... From purchasing the property, to handling the rentals, etc.
I'm thinking of approaching a real estate company that also rents property and have them find several purchase opportunities that would put me cash positive on a monthly basis.
Thoughts?
Can anyone who owns rental property give me some do's and dont's ... From purchasing the property, to handling the rentals, etc.
I'm thinking of approaching a real estate company that also rents property and have them find several purchase opportunities that would put me cash positive on a monthly basis.
Thoughts?
6
Posted on 12/26/15 at 4:13 pm to mytigger
•Read some books
•Find someone who does it and ask them a ton of questions
I'm in the same boat, a friend and will hopefully be purchasing a rental house in '16.
The thing I'm most worried about is people calling me at all hours to fix a stopped up toilet.
•Find someone who does it and ask them a ton of questions
I'm in the same boat, a friend and will hopefully be purchasing a rental house in '16.
The thing I'm most worried about is people calling me at all hours to fix a stopped up toilet.
Posted on 12/26/15 at 4:54 pm to poochie
quote:
The thing I'm most worried about is people calling me at all hours to fix a stopped up toilet.
Owner finance it.
Posted on 12/26/15 at 5:22 pm to poochie
quote:
The thing I'm most worried about is people calling me at all hours to fix a stopped up toilet
this will be 98% determined by who you rent to.
Posted on 12/26/15 at 5:31 pm to Mr.Perfect
That's what I'm figuring. And I assume that goes hand in hand with rental prices as well. The aim is for either post-college single folks or newlyweds that aren't ready to get their own house or new divorcees. We're just starting out on this journey so we'll see how it works out. We're going to start with 1 and cut our teeth then grow from there.
Posted on 12/26/15 at 5:46 pm to poochie
What exactly are the rules on picking and choosing tenants?
Posted on 12/26/15 at 5:47 pm to TJG210
Credit check
Background check
References (at least 3)
Rent payment history
Background check
References (at least 3)
Rent payment history
Posted on 12/26/15 at 6:06 pm to mytigger
It all depends on how much work you are willing to put in. In BR you can easily clear 100-200 a month on a single family house with almost no work or you can clear 400-500 with an hour a week and 1/4 the investment.
Posted on 12/26/15 at 7:00 pm to stout
quote:
Owner finance it.
Can you elaborate?
Posted on 12/26/15 at 7:02 pm to Wasp
quote:
all depends on how much work you are willing to put in. In BR you can easily clear 100-200 a month on a single family house with almost no work or you can clear 400-500 with an hour a week and 1/4 the invest
Honestly I don't have much time to put in the work, but you're being fairly vague - can you please explain what you're talking about?
Posted on 12/26/15 at 7:13 pm to mytigger
Assuming he means doing his own handyman work
Posted on 12/26/15 at 7:52 pm to mytigger
I'm referring to picking up rent in person to check on places, doing handywork, things generally associated with lower income property. We've been buying property in the $60k range and leasing $1k+, 15 yr note and paying off in about 5-7 years depending on major expenses.
Posted on 12/26/15 at 8:01 pm to mytigger
The other side is buying, for example, a house in the kenilworth magnolia woods area for $160-210k and leasing to responsible college kids or young adults that will mail their check and you'll never hear from them the entire time they are there because they replace light bulbs and air filters and can fix a clogged drain.
The return will be smaller but is much easier to scale to a larger operation. We are nearly maxed out right now at about 25 properties.
The return will be smaller but is much easier to scale to a larger operation. We are nearly maxed out right now at about 25 properties.
Posted on 12/26/15 at 8:32 pm to poochie
quote:
The thing I'm most worried about is people calling me at all hours to fix a stopped up toilet.
price in a property manager before you buy
Posted on 12/26/15 at 9:37 pm to Fat Bastard
quote:
property manager
More than 4 properties, sure, less than that, big ripoff.
Posted on 12/26/15 at 10:04 pm to Paul Allen
quote:
less than that, big ripoff.
Nope. If you've got the cashflow it really doesn't matter. If you think it is a ripoff because all you can find is a crappy manager with high fees in a area with shite cashflow that's your problem. So a guy is supposed to stay away from out of town or out of state investments with killer cashflow because per your opinion it is all a big ripoff if he cannot manage his first 4? wow.
Posted on 12/26/15 at 10:48 pm to Fat Bastard
Who's going to want to pay 8-10 percent to a property manager with less than 4 rentals? Especially, if they're all located in the same area.
Posted on 12/26/15 at 11:10 pm to Wasp
25 properties sounds pretty impressive to me. I was thinking if I could get up to 20 and pay them off before turning 60 I'd have a nice steady little income of $250K +/year going into retirement.
You mentioned two scenarios - the $60 low end property and the $200K Kenilworth type property. I'm curious if you'd rather have 20 of the $60k properties or 10 of the $200k properties long-term?
You mentioned two scenarios - the $60 low end property and the $200K Kenilworth type property. I'm curious if you'd rather have 20 of the $60k properties or 10 of the $200k properties long-term?
Posted on 12/27/15 at 7:15 am to mytigger
To me a long term play is all about equity in the beginning. The lower the mortgage the quicker you will gain equity. The next phase of our portfolio will be to use equity to move into the next "class" of property. 75-150k in nicer areas like maybe quail ridge or the neighborhood on perkins across from the produce stand.
We have 1-2 mortgages right now and yeah my dad pulls in a lot of cash every month, around 20k a month but you can count on a place going vacant almost every 2 months. Generally when a place goes vacant all the carpet is replaced, walls repainted, sheet rock replaced(not all) or patched, and a seriously deep clean occurs.
We've also been very fortunate with some properties with a 25 year tenant. My father hadn't stepped in the place in over a decade. And 3 10-15 year tenants.
We have 1-2 mortgages right now and yeah my dad pulls in a lot of cash every month, around 20k a month but you can count on a place going vacant almost every 2 months. Generally when a place goes vacant all the carpet is replaced, walls repainted, sheet rock replaced(not all) or patched, and a seriously deep clean occurs.
We've also been very fortunate with some properties with a 25 year tenant. My father hadn't stepped in the place in over a decade. And 3 10-15 year tenants.
Posted on 12/27/15 at 11:29 am to Wasp
So, did you guys start doing this from scratch with $15K and start building up equity, or did you buy multiple $60k properties at once because y'all felt like it was a better option than buying a $150K property that required a larger down payment?
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