- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Coaching Changes
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Question for landlords and homeowners
Posted on 4/18/11 at 12:12 pm
Posted on 4/18/11 at 12:12 pm
Is there some sort of rule of thumb I can use to gauge an upper limit to what the cost is to maintain a rental unit? Or can you tell me what you've paid in the past on average?
This post was edited on 4/18/11 at 12:12 pm
1
Posted on 4/18/11 at 12:34 pm to OohPooPahDoo
40-50% of rents is a good conservative estimate. 40% if you manage yourself, closer to 50 if you go with property management.
Posted on 4/18/11 at 12:37 pm to Alabama Slim
if you are thinking of getting into IRE I would learn the 2% and 50% rule. It is a good evaluation system for a beginning investor.
LINK
LINK
Posted on 4/18/11 at 12:52 pm to Alabama Slim
I've had a couple of rentals for several years now, and to be honest I don't really care for the 2%/50% theory. I've been pretty successful with these properties calculating expenses and then pricing the rent about 25 - 30% above that. the rent remains competitive, and I have been able to retain quality tenants, for the most part.
Posted on 4/18/11 at 12:54 pm to Alabama Slim
quote:
40-50% of rents is a good conservative estimate. 40% if you manage yourself, closer to 50 if you go with property management.
And that doesn't include things like property taxes, the mortgage interest - things that can be determined beforehand - that's just the cost to do repairs, etc., right?
Is that about the same for a homeowner's expenses? Should I figure on about 40% of what a place rents out for in monthly house repair and maintenance, or does that wind up being less since people generally treat property they own better?
Posted on 4/18/11 at 12:56 pm to Alabama Slim
quote:
if you are thinking of getting into IRE I would learn the 2% and 50% rule. It is a good evaluation system for a beginning investor.
Cool, thanks
quote:LINK
The 50-2 rule is very basic. First, the 50% part of the rule says that 50% of your rental revenue from the property will be eaten up by maintenance, repairs, property management (property management is 10% of gross rent) and vacancies. The 2% rule requires that the property generate 2% of the cost of the property per month in rental income. For example, a $100,000 investment should provide $2,000 a month in gross rents.
Can I use this conversely to see if a home is overpriced? If a duplex rents for $1000 a side - then by the 2% rule it should cost $100,000. Well the one we're looking at now is double that!
Posted on 4/18/11 at 1:05 pm to OohPooPahDoo
The 2% rule is a joke. Good luck getting that within the first 5 years of owning a property.
Posted on 4/18/11 at 1:07 pm to Camp Randall
quote:
The 2% rule is a joke. Good luck getting that within the first 5 years of owning a property.
I can believe that based on the prices I've seen at places we've looked at and the rents they are getting. Its more like the 1% rule.
I'm fine with that at first, we mainly want a duplex to get help paying the note, not to make profit. But I wanna make sure we aren't going to wind up having more net monthly housing expenses than we do now.
Figuring in all the tax considerations is a royal pain.
This post was edited on 4/18/11 at 1:09 pm
Posted on 4/18/11 at 1:15 pm to OohPooPahDoo
I think age of the house would make a huge diff
Posted on 4/18/11 at 1:17 pm to OohPooPahDoo
quote:
Its more like the 1% rule.
Yep.
My biggest regret after graduation was buying a house...I should've bought a duplex. If that's what you are doing ...
I bought a duplex for $250k and get $2300 a month for it now. Not the best deal but I shouldn't have trouble keeping it occupied. Also the yard is very small and can be "mowed" with a weedeater.
Posted on 4/19/11 at 6:36 pm to Camp Randall
I am looking into an owner occupied duplex. Does anyone here have any experience with this or suggestions?
Page 1 of 1
Popular
Back to top
Follow TigerDroppings for LSU Football News