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re: Renting out house with mortgage
Posted on 1/18/19 at 2:13 pm to KG6
Posted on 1/18/19 at 2:13 pm to KG6
I don’t know why everyone wouldn’t want to rent out a house? I have a mortgage on mine and I rent it out. I’d like to have more to rent out. I guess it depends on what rents go for where you live. In my case I owe about $175k on this house and I rent it for $2800 a month. If I was to sell, I’d list for about $400k.
I like the monthly income and the Tennants are paying the bills on it.
I like the monthly income and the Tennants are paying the bills on it.
1
Posted on 1/18/19 at 2:20 pm to 50_Tiger
quote:
I know for a fact, North Dallas is starting to face issues with built McMansion neighborhoods sitting empty.
A few houses I have kept eye on have dropped 20k over the past 3 months. If the interest rate rises again, might see more McMansions empty.
Why is that? The wife and I were just looking at places in Frisco, Tx and they seemed cheaper than I expected. We would like a part of the year place. Here in Fl the state is up 7% in prices. Boca is up 20%
Posted on 1/19/19 at 12:27 pm to Jp1LSU
quote:
I don’t know why everyone wouldn’t want to rent out a house? I have a mortgage on mine and I rent it out. I’d like to have more to rent out. I guess it depends on what rents go for where you live. In my case I owe about $175k on this house and I rent it for $2800 a month. If I was to sell, I’d list for about $400k. I like the monthly income and the Tennants are paying the bills on it.
Yes, but there's a difference between wanting to be a landlord and being a landlord by default. If I read his posts correctly, his actual goal is to only rent it until he can sell it and get closer to his price. Doesn't sound like he wants to be a property investor.
I personally wouldn't take on the risk of having a mortgage on a new primary residence and continuing to carry a mortgage on a house that I really just want to sell, and have no intention of renting longer term. In addition to having to work with the tenants for it to be shown by agents (eventually), you'd have to craft your lease so that the potential new buyers can close and move in when it fits their needs. Plus, what sort of damage might I have to deal with when the tenants move out? Have they do anything (physically or by being there when it was being shown) to decrease the value?
Being a landlord is great. Not being a landlord is fine too. But default landlording (with two mortgages) by an inexperienced person is like No Man's Land at the Somme - too great a chance of taking a bullet.
Just my 2 cents.
Posted on 1/19/19 at 1:16 pm to KG6
quote:
realizing homestead and insurance will go up
This CAN be a nonissue....
Posted on 1/20/19 at 8:22 am to Jp1LSU
Jp, the only houses builders built were 350k+ and most of the true market in DFW can barely afford anything over 400k. They were trying to scoop up all the Fortune 500 money that screwed the market up. It’s correcting...slowly.
Posted on 1/20/19 at 9:59 pm to KG6
How much interest are you paying for a year? 18k? Seems like selling for 10k less last summer might be better than getting the 10k a year later after having paid 15-18k more in interest.
Posted on 1/21/19 at 4:48 am to olgoi khorkhoi
quote:
How much interest are you paying for a year? 18k? Seems like selling for 10k less last summer might be better than getting the 10k a year later after having paid 15-18k more in interest.
Paying interest on this house or paying it on the next is not much different. My net worth is the same if the home value doesnt drop.
As far as wanting to rent vs renting by default.... I've been interested in renting for some time. Looking for where good opportunities may lie. I will admit that our house probably isn't the place to start though. Hence starting the thread. I dont feel as confident with a home of this value.
Posted on 1/21/19 at 7:12 am to nugget
Renting out a home is a pain in the arse and not worth it IMO.
Posted on 1/21/19 at 12:10 pm to KG6
quote:
Paying interest on this house or paying it on the next is not much different. My net worth is the same if the home value doesnt drop.
good point
Posted on 1/22/19 at 2:53 pm to KG6
I'm on the other end of the spectrum KG6.
If the numbers work, i'd do it 100%. Your tenants pay down your mortgage, you'll make a little cash every month, and you'll have the POSSIBITY of appreciation.
The problem you may run into is the price point of your house. As others have said, it's a REALLY close to line I stay away from. "Why would someone rent a $300k house if they could just cover that mortgage". You'd be surprised though. I have a (service) business with about 16k customers, and I know if they rent or own. You'd be amazed at how many people rent $300-$600k houses.
None of this means anything though, until you run the numbers. I personally wouldn't do it if I don't have enough wiggle room to hire a prop manager. The price of your house, you may not depending on your mortgage.
How much is your mortgage, and how much is rent going for in comparable houses in your area. That's what you need to figure out.
If the numbers work, i'd do it 100%. Your tenants pay down your mortgage, you'll make a little cash every month, and you'll have the POSSIBITY of appreciation.
The problem you may run into is the price point of your house. As others have said, it's a REALLY close to line I stay away from. "Why would someone rent a $300k house if they could just cover that mortgage". You'd be surprised though. I have a (service) business with about 16k customers, and I know if they rent or own. You'd be amazed at how many people rent $300-$600k houses.
None of this means anything though, until you run the numbers. I personally wouldn't do it if I don't have enough wiggle room to hire a prop manager. The price of your house, you may not depending on your mortgage.
How much is your mortgage, and how much is rent going for in comparable houses in your area. That's what you need to figure out.
Posted on 1/22/19 at 2:57 pm to KG6
quote:
I think its be decently easy to rent. But I have no expertise.
Then don't do it, IMO.
Posted on 1/23/19 at 10:10 am to baldona
quote:
OP I'm not saying the market will be down in 2 years, I'm just not convinced its going to be up much more.
Interest rates just inching up a bit have already taken a little air out of the balloon.
Any more and you could see a fire sale on a lot of this empty inventory.
Posted on 1/23/19 at 10:24 am to Golfer
quote:quote:
I think its be decently easy to rent. But I have no expertise.
quote:
Then don't do it, IMO.
Kind of where my head is at and just thinking it out. I say it's easy to rent in the sense that the only house I've seen stay empty was left in crappy condition (overgrown yard, etc.). The others are always occupied within a couple months....easy to find tenants. Not easy in the sense that I know what I'm doing.
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