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Message
re: Being a Landlord
Posted on 8/2/22 at 11:51 am to MrJimBeam
Posted on 8/2/22 at 11:51 am to MrJimBeam
quote:
10 houses or
quote:
I sort of agree with this sentiment. You're going to have good and bad renters. Time to time you'll have issues with collecting but it won't be all of your units. The reason you need to cash flow a certain amount per property/unit is because sometimes you'll need that buffer of some units not being rented out for brief periods, some tenants not paying on time or at all, maintenance, etc. The best business model is one that the business is able to support itself through all the difficulties and that may take time depending on your situation. Each situation is different.
I've been in the business for a handful of years and am in a perpetual learning process. I will say once you get past 3-5 properties, things do start to get easier financially if things go as planned. It's the managing part you need squared away at that point if you're able to do it yourself at first.
Agreed. If you want to get into this you have to plan to have several of them. My goal was 10 and I now have 12. One or two houses will not be worth the shite that will come up...and it will. Not that its always doom and gloom just don't kid yourself that it will be great 100% of the time. With the right amount of houses and the right area it can be real good.
I had someone tell me recently about some sort of service she has her renters sign up for or she wont rent to them. They have to agree to allow rent to be auto drafted from their bank account each month or she wont rent to them. That will cut down on prospects but it will also decreases some of the sob stories...and there will be some. Sometimes those are real stories and they may fall on bad times but you have to be strong willed, know your bills are due each month and the bank doesn't give a rats arse about your shortcomings. Gotta pay to stay.
Also offer free AC filters that you go replace. That lets you know that one of the most problematic and expensive things in the house is well cared for...and you get to go pass your eye inside without being the snoopy landlord. You just want to make sure they have a well cooling AC (wink wink)
1
Posted on 8/2/22 at 12:05 pm to trident
Use Zillow for listing your property. It is a great resource. They do background/credit check. Do not post it on Facebook marketplace.
Posted on 8/2/22 at 12:12 pm to NOLAGT
quote:
I had someone tell me recently about some sort of service she has her renters sign up for or she wont rent to them. They have to agree to allow rent to be auto drafted from their bank account each month or she wont rent to them. That will cut down on prospects but it will also decreases some of the sob stories...and there will be some. Sometimes those are real stories and they may fall on bad times but you have to be strong willed, know your bills are due each month and the bank doesn't give a rats arse about your shortcomings. Gotta pay to stay.
Can you share this exact service? Would certainly love to look into this.
quote:
Also offer free AC filters that you go replace. That lets you know that one of the most problematic and expensive things in the house is well cared for...and you get to go pass your eye inside without being the snoopy landlord. You just want to make sure they have a well cooling AC (wink wink
10000000000 percent agree. It's absolutely one of my favorite landlord hacks. I typically have 1 or 2 year leases and this is a great way to keep an eye on the yard and the house itself depending on what the tenant is required to upkeep.
Also, set it up for the 3rd or 5th of the month every three months. This is in case you have those that don't pay on time and can make them sweat in person over this as an extra incentive.
This post was edited on 8/2/22 at 12:14 pm
Posted on 8/2/22 at 1:12 pm to MrJimBeam
quote:
Can you share this exact service? Would certainly love to look into this.
Yea I have to get back in touch with her to find out what exactly it is. I was interested as well. She was just getting into the game and her first house the person was really reluctant but decided to do it. I can see where it would scare some off...but is that a good/bad thing no idea.
Posted on 8/2/22 at 1:13 pm to MrJimBeam
Posted on 8/2/22 at 1:19 pm to trident
Yep thats it I just texted her. erentpayment.com
Posted on 8/2/22 at 1:28 pm to Buddy the Tiger
quote:
Do not post it on Facebook marketplace.
Why is this? I know someone who has success with this. Allows him to screen whoever responds to the ad by reviewing their profile. He can then pick and choose who he responds to…
Posted on 8/2/22 at 2:14 pm to trident
When you sell the property all of the depreciation you took in previous years becomes ordinary income.
Say you have a $200k property and you rent it out for 20 years. You use that property as leverage and take out loans that total $150k. Then you sell it and you owe taxes on nearly $200k and still owe on the loan, so you can end up in the hole. It's called the 1031 trap.
Say you have a $200k property and you rent it out for 20 years. You use that property as leverage and take out loans that total $150k. Then you sell it and you owe taxes on nearly $200k and still owe on the loan, so you can end up in the hole. It's called the 1031 trap.
This post was edited on 8/2/22 at 2:19 pm
Posted on 8/2/22 at 2:20 pm to trident
quote:
5/2 rule. So I would have 3 more years before this kicked in for taxing on the gains. Thanks for that information.
But its a cliff, so if you don't sell in 36 months EXACTLY you are fricked with 100% of taxes.
Things to consider with this cliff, is you need to CLOSE at under 36 months. Which means you need to list it well before that. I had one close at 35 months 15 days, that shite wasn't worth it. I listed it 5 months early and the first buyer dropped out after inspection, I relisted it, 2nd buyer failed to get a loan, and then the 3rd buyer came through just in time!
So I would rent for 24 months, then sell. Again its a cliff not a hill.
Lastly, keep the market in mind. What's the market going to do in 2 years? Is it for sure staying level or going up? Is that risk worth it?
Posted on 8/2/22 at 2:23 pm to PhiTiger1764
quote:
Why is this? I know someone who has success with this. Allows him to screen whoever responds to the ad by reviewing their profile. He can then pick and choose who he responds to…
One reason NOT to use Facebook is because you will be hit up by all your cousins, friends, and family to stay for a deal. You don't want to turn their asses down. DON'T rent to family.
You can ALWAYS facebook someone if you list off facebook.
Posted on 8/2/22 at 2:48 pm to trident
Get a property management team and not have to worry about the hassle.
Posted on 8/2/22 at 2:49 pm to pioneerbasketball
quote:
Get a property management team and not have to worry about the hassle.
not for 1 prop. They would eat all the cash flow
Posted on 8/2/22 at 3:15 pm to trident
Doing long term...getting the right tenants is paramount. No young children if possible...periodic inspection of the premises...
Posted on 8/2/22 at 3:18 pm to trident
quote:
quote:
Get a property management team and not have to worry about the hassle.
not for 1 prop. They would eat all the cash flow
What does a property management company grab on one property?
Posted on 8/2/22 at 3:24 pm to meansonny
quote:
What does a property management company grab on one property?
Around 8-10% month gross rent, and anywhere from 50-100% (usually on the higher end) of first month's rent from those I know that deal with it. Can get very pricy if you have a decent turnover rate.
Posted on 8/2/22 at 3:36 pm to trident
I've been a landlord for decades. You should go for it. My best advise is:
Get a good tenant! You can run credit and background checks. I have to be able to communicate with them. Then it will mostly work out.
If you happen upon a bad tenant, give them the boot. I've only had that happen maybe twice.
Get a good tenant! You can run credit and background checks. I have to be able to communicate with them. Then it will mostly work out.
If you happen upon a bad tenant, give them the boot. I've only had that happen maybe twice.
This post was edited on 8/2/22 at 3:37 pm
Posted on 8/2/22 at 3:46 pm to trident
Keep utilities in your name and tack those charges onto the monthly note. That way if the tenant doesn’t pay rent you kill all utilities to the property immediately. See how long they enjoy no water and power for.
Posted on 8/2/22 at 4:57 pm to MrJimBeam
quote:
Around 8-10% month gross rent, and anywhere from 50-100% (usually on the higher end) of first month's rent from those I know that deal with it. Can get very pricy if you have a decent turnover rate.
If they are providing the new tenant, it sounds like they are earning the money.
If it is 100% first month's rent and I am finding the tenant, I can see how that would be considered a bad deal.
America is going the way of Europe. Land is only going to get more expensive and rents are going to run right along with inflation. It almost seems foolish to dump real estate when it is no longer personally useful and be exclusively in the stock market.
Posted on 8/2/22 at 5:29 pm to meansonny
quote:
If they are providing the new tenant, it sounds like they are earning the money.
Yea they screen and place tenants and manage everything for you. Tenants shouldn’t even know who you are
Posted on 8/2/22 at 7:58 pm to trident
If its a nice enough house in a nice enough area consider Aribnb or vrbo or both. I've never done it but if I had to do it over I would consider it instead of a long term rental.
For the long term rental...understand the eviction laws in your state. It varies state by state. Eviction laws in Louisiana actually favor the landlord and its not that hard to evict someone. As others have said...you got to be a flat out jerk. No excuses...get your money or they'll take advantage of you. That being said the cost of turning over a property is probably 4k each time. So working with a good tenant with a long history of good payments isn't always bad.
Lower rent with a long term tenant is better than higher rent and turning it over every 6 months. I wouldn't do a lease for less than 12 months...I always had them under an rental agreement because if they go month to month in Louisiana the eviction process gets longer.
That's my 2 cents. Its a great 2nd income. But I think you could make more as an Airbnb with less wear and tear on the property.
For the long term rental...understand the eviction laws in your state. It varies state by state. Eviction laws in Louisiana actually favor the landlord and its not that hard to evict someone. As others have said...you got to be a flat out jerk. No excuses...get your money or they'll take advantage of you. That being said the cost of turning over a property is probably 4k each time. So working with a good tenant with a long history of good payments isn't always bad.
Lower rent with a long term tenant is better than higher rent and turning it over every 6 months. I wouldn't do a lease for less than 12 months...I always had them under an rental agreement because if they go month to month in Louisiana the eviction process gets longer.
That's my 2 cents. Its a great 2nd income. But I think you could make more as an Airbnb with less wear and tear on the property.
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