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re: Rental property question
Posted on 1/9/20 at 2:11 pm to ulsaint
Posted on 1/9/20 at 2:11 pm to ulsaint
One other reason I was considering selling this year is that I think this is the last year I can see with fewer tax implications since I've still lived in it three of the last 5 years. I need to go back and refresh myself on that rule.
----------------
Yeah, you're getting some good advice on here.
Taxes ramifications was going to be my question for you.
I've got single family homes and most are paid for. I still manage myself, but will consider management if I burn out. But I bought right and put most on short term mortgages.
I'd be inclined to sell this one and you decide what to do with the proceeds.
I heard some of the oil companies are laying off in Houston. How deversified is the economy?
----------------
Yeah, you're getting some good advice on here.
Taxes ramifications was going to be my question for you.
I've got single family homes and most are paid for. I still manage myself, but will consider management if I burn out. But I bought right and put most on short term mortgages.
I'd be inclined to sell this one and you decide what to do with the proceeds.
I heard some of the oil companies are laying off in Houston. How deversified is the economy?
1
Posted on 1/9/20 at 2:26 pm to ulsaint
Capital gains tax? Think you have to live there 2 years to not have to pay on profits when you sell...but I dont know how that works when you dont live there for a bit. There may be more but just wanted to toss that out there.
Posted on 1/9/20 at 2:51 pm to ItzMe1972
quote:
I heard some of the oil companies are laying off in Houston. How deversified is the economy?
Pretty diverse. Obviously oil is huge, but it's not like Lafayette that has no other real industry.
It's the fourth biggest city in the country and will be fine.
Posted on 1/9/20 at 3:36 pm to ulsaint
I always consider 2 things:
-Cashflow - Obviously
-Debt Service - How much equity do I have after "X" amount of time?
I wouldn't be upset with that cashflow amount if it had good debt service.
What kind of loan term are you on?
-Cashflow - Obviously
-Debt Service - How much equity do I have after "X" amount of time?
I wouldn't be upset with that cashflow amount if it had good debt service.
What kind of loan term are you on?
Posted on 1/9/20 at 4:05 pm to ulsaint
30 years of others paying your note and you get a free property with someone else paying it.
It always makes sense to keep real estate.
It always makes sense to keep real estate.
Posted on 1/9/20 at 4:38 pm to Mr.Perfect
hmm idk about that dude
Posted on 1/9/20 at 7:19 pm to ulsaint
that is not good RTV.
I have homes way cheaper than that making more PCF than that.
you need to educate yourself in RE. It was obvious this home was never acquired or bought right to be a rental based on your debt sevice, rent to value and PCF.
good luck
I have homes way cheaper than that making more PCF than that.
quote:
but this takes time and real estate knowledge which I lack.
you need to educate yourself in RE. It was obvious this home was never acquired or bought right to be a rental based on your debt sevice, rent to value and PCF.
good luck
Posted on 1/9/20 at 7:23 pm to Thecoz
quote:
When you sell it comes back at you in a tax form.
depreciation recapture tax
unless
maybe he needs to just sell, roll into 1031 exchange and buy some rentals correctly to avoid taxation.
Posted on 1/9/20 at 7:44 pm to Fat Bastard
quote:
maybe he needs to just sell, roll into 1031 exchange and buy some rentals correctly to avoid taxation.
That’s what I would do. My parents did that but there houses were paid off. Not sure how it works if there is a mortgage that sounds like a residential loan not a investment one. Does it matter
Posted on 1/9/20 at 9:17 pm to NOLAGT
investor loans can be residential or commercial.
Posted on 1/9/20 at 9:24 pm to Fat Bastard
Right but they are different rates and different loans even tho “residential” right. What I mean is it was his mortgage as his personal residence not a investment mortgage. I may have mis worded.
This post was edited on 1/9/20 at 9:25 pm
Posted on 1/10/20 at 5:18 pm to Peejack84
quote:
A quick evaluation of a property is that the total rents need to be at least 1% of the purchase price.
I’ve always used that same percentage also as a go by on whether or not I even consider a property.
Posted on 1/10/20 at 5:26 pm to ulsaint
Don’t forget to include the cost of selling it in your evaluations. Realtor fees and closing costs add up pretty quickly. At 6% on a $350K sell price you would pay a realtor $21,000 and then another $4,000 in title policy, home warranty, minor repairs, recording fees, etc. Sucks for it to cost about $25,000 to sell a home.
Posted on 1/11/20 at 9:05 pm to ulsaint
You could get a 100k heloc and buy 5, 100k properties. Or sell it for 150 profit and buy 7 properties.
Posted on 1/13/20 at 7:16 am to Rust Cohle
quote:
You could get a 100k heloc and buy 5, 100k properties
But then your paying mortgage interest on each and the heloc. Never looked into tho but is that still a good idea in order to get 5 rentals fast?
Posted on 1/13/20 at 8:51 am to Peejack84
quote:
A quick evaluation of a property is that the total rents need to be at least 1% of the purchase price. I try to stay around 1.4%
Same here, but how/where are you finding properties? I can only find stuff in the $90k to $120k that I can rent for $1000 to $1300... once the price prices approach $200k, rent stays down around $1,500. I've spent hours on HAR and my excel sheets and can't find anything that makes the math work for a decent cash on cash return. This is in Houston.
Posted on 1/13/20 at 9:22 am to LSUJuice
quote:
This is in Houston.
this is why you invest NATIONALLY.
Posted on 1/13/20 at 9:34 am to Fat Bastard
quote:
this is why you invest NATIONALLY.
This is something I really want to get into, but just can't seem to figure out the best route. I know there are articles, but I really like to personally know more about areas before investing instead of trusting others solely on such decisions. Any suggestions?
Posted on 1/13/20 at 9:45 am to Fat Bastard
Fair enough. That would take some wife convincing though.
Posted on 1/13/20 at 4:38 pm to LSUJuice
quote:
Same here, but how/where are you finding properties? I can only find stuff in the $90k to $120k that I can rent for $1000 to $1300... once the price prices approach $200k, rent stays down around $1,500. I've spent hours on HAR and my excel sheets and can't find anything that makes the math work for decent cash on cash return. This is in Houston.
This is exactly my self conceived sweet spot in lafayette. I think about 1200 (maybe 1300) a renter becomes short term and I don't want to fool with an annual turnover. 120k max on a house that is around 1200sqft and I go by $1/sqft and stay out of the flood zones if possible.
I am curious about the HELOC used to buy some houses. I have thought about getting one just to have but never looked into it. What is the average interest in something like that? I guess if broken up over 5 houses to mix with there mortgage interest rate it wouldn't add too much to the note? Take ALL the profit from that 5 pack of house and dump it into paying off the HELOC first? Common practice?
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