Due diligence when it comes to tenant screening and we only do month to month leases in case someone turns into a problem.
Interested in hearing from people who rent out property
- Thread starter Mpoitrast87
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Owning property is not passive income. My dad has owned hundreds of units over about 30 multi unit homes. It took a small team of employees to just keep up with them. Even with 5-10 units it’s a second full time job.
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OP Pm me your phone number and you can talk to my dad directly. He started selling off a lot in the last couple of years. He can definitely send you in the right direction.
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What stocks could I invest in and have a couple grand in returns every month? If it was common to break even every month on rental properties then no one would do it. I would use the “brrr” method.
Buy. Renovate. Refinance. Rent.
Take the money from the new refinanced loan and it reinvest it.
This is the most concise and to the point argument I’ve seen. A lot of people just assume rental income is easy. It’s the opposite, especially in the state of mass the tenants have a lot of rights. My father made the most buying undervalued before it ever came close to hitting the market and would completely rehab the building. He would put tenants in and sell it off or a group of them off at once. Much more in developing and dumping than holding for a long period and covering the note.
Example; in 08? He bought a 6 family in newton mass for a shade under 1mm. Had it for a year or so just sitting with current tenants. then after the last tenant left they ripped it apart. Renovated everything. Wiring/hvac. New kitchens you name it. It was another 500 or so he said into renovations. Sold them individually as condos for 550-700 a piece.
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I guess that depends on a lot of factors. Like another poster said. He has managed his properties from over seas. my old childhood best friends dad has 6 properties of duplexes and triplexes and he does/did everything on his own while working a 9-5 and being a single father and he seemed to do all right. Not saying it can’t/won’t be difficult but I think a lot depends on the condition of the property and quality of tenants.
Buy 500k worth of money and invest it. Tons of safe options to yield 6-10%. You’ll easily make a couple grand a month. You’re basically trying to do the same thing with a mortgage on a rental. You’re not buying property. You’re buying money to buy property. What’s the difference other than one is a safe passive means of income the second is dealing with tenant laws, property taxes, maintenance, calls at 2am for frozen pipes, neighbors that don’t get along, etc.
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Clearly some of us are doing well at this. It’s not for everyone.
Been a landlord for ~40 years. Some properties just seem to be headache, while others work out good. I got a super deal on a small mixed use commercial/residential property about 25 years ago.. still own it, all paid off - which is the big key. Once you pay it off is when you start making decent money.
I used to get real angry at tenants when rent is late, but then changed my attitude. Now I simply tell them I love them (and I do, usually), but have too many bills to pay. They can either pay or move, their choice, no hard feelings, but one of those has to happen. And I am now collecting rent much easier with this approach, plus I won't give myself a frakkin' heart attack!
Time to buy more dividend stocks....................
I used to get real angry at tenants when rent is late, but then changed my attitude. Now I simply tell them I love them (and I do, usually), but have too many bills to pay. They can either pay or move, their choice, no hard feelings, but one of those has to happen. And I am now collecting rent much easier with this approach, plus I won't give myself a frakkin' heart attack!
Time to buy more dividend stocks....................
Many do not understand let alone model out with any sophistication what they are making and then compare it to opportunity cost. Then adjust for illiquidity, hassle, bad tenant risk, transaction cost, etc. etc.
There are very few assets that have negative scale i.e. the more you own, the higher your holding cost. Normally the more of any asset you own the lower your holding cost. Not rental properties.
There are plenty that stay rich with rental properties. You will meet very few that got rich with rental properties. The real money is in owning the management companies.
Been a landlord for ~40 years. Some properties just seem to be headache, while others work out good. I got a super deal on a small mixed use commercial/residential property about 25 years ago.. still own it, all paid off - which is the big key. Once you pay it off is when you start making decent money.
I used to get real angry at tenants when rent is late, but then changed my attitude. Now I simply tell them I love them (and I do, usually), but have too many bills to pay. They can either pay or move, their choice, no hard feelings, but one of those has to happen. And I am now collecting rent much easier with this approach, plus I won't give myself a frakkin' heart attack!
Time to buy more dividend stocks....................
and I bet those houses you bought are now worth X3 or even X4 your purchase price. This is why I'm buying a house in FL. I may not rent ...but I know for damn sure in 20 years it will be worth a good amount of money.
I don't plan on being a "professional landlord" and probably won't ever buy another investment property. I kept my first house and turned it into a rental. $800/month complete escrow (principal/interest/taxes/insurance) and I get $1600/month in rent. 1400 sq ft 3/2/2 7500sq ft lot. Same tenants going on 3 years now. First tenant (wife's friend) was there for about 1.5 years.
Acquisition cost was about 1 hour of my time and the $49 I paid to have a lease contract customized for me on legalcontracts.com. Zillow lets you list a rental for free and I used mysmartmove.com to vet the potential tenants (they pay the $39 fee).
I reviewed credit/criminal background checks, called references, then scheduled interviews in person and chose from there. I do any maintenance work myself and usually have a few hundred in receipts (tools/materials/repairs) each year to claim on taxes for miscellaneous. Harvey flooded the house and I didn't have insurance but it only cost me $7k for new floors, doors, drywall/insulation (2'), vanities, etc. doing the work myself.
So I profit $800/month plus a steady decrease in mortgage principal. If I were you I would just see what $/sq ft rentals are getting in certain sought-after neighborhoods (near good schools is a plus) and buy the best deal you can find.
Acquisition cost was about 1 hour of my time and the $49 I paid to have a lease contract customized for me on legalcontracts.com. Zillow lets you list a rental for free and I used mysmartmove.com to vet the potential tenants (they pay the $39 fee).
I reviewed credit/criminal background checks, called references, then scheduled interviews in person and chose from there. I do any maintenance work myself and usually have a few hundred in receipts (tools/materials/repairs) each year to claim on taxes for miscellaneous. Harvey flooded the house and I didn't have insurance but it only cost me $7k for new floors, doors, drywall/insulation (2'), vanities, etc. doing the work myself.
So I profit $800/month plus a steady decrease in mortgage principal. If I were you I would just see what $/sq ft rentals are getting in certain sought-after neighborhoods (near good schools is a plus) and buy the best deal you can find.
800 profit a month is good money. If you wanted you could pump that into the stock market or 401k. Like you said your principle is going down, and once it's paid off, you have a nice little gold nugget to sell and make a great profit. I remember my grandfather told me his first house was $20,000. Just puts everything into perspective.
You're absolutely right, however that would require me to be fiscally responsible! I play with a very small amount in stocks, I'm career military so I'll have a pension here soon.
$20k would be awesome, I've heard my grandparents talk about those kind of values before. I bought this house in 2008 (closed on it 3 days before Hurricane Ike Tina Turner'd Houston) for $105k, last I saw the comps they were around $160k'ish.
I used to get real angry at tenants when rent is late, but then changed my attitude. Now I simply tell them I love them (and I do, usually), but have too many bills to pay. They can either pay or move, their choice, no hard feelings, but one of those has to happen. And I am now collecting rent much easier with this approach, plus I won't give myself a frakkin' heart attack!
Time to buy more dividend stocks....................
I use that approach too and work with my tenants when they need it. They love living there and even helped me reconstruct after Hurricane Harvey flooded it. I let them pay twice a month rather than all on the 1st as it better suits their budget.
I’ll go back and read the whole thread, but from the original post not so good experience here.
The rent paid for the mortgage, but you had to maintain, fix, deal with the people. When they left, the place was so bad (multiple times) we had to do drywall work, replace carpet, de-bug the place. Maybe you’re higher end, this was $575 a month apartment in a great location. Not to mention the people that breached contract. Take it to small claims and they just tell you to piss in the wind.
The rent paid for the mortgage, but you had to maintain, fix, deal with the people. When they left, the place was so bad (multiple times) we had to do drywall work, replace carpet, de-bug the place. Maybe you’re higher end, this was $575 a month apartment in a great location. Not to mention the people that breached contract. Take it to small claims and they just tell you to piss in the wind.
I manage some commercial properties owned by the family. If it was residential... I would probably kill myself.
Yes but their annual income was $12,000. It is all relative. The price of housing can only grow at the rate of population growth which is 2% over the long term.
What if the birthrate falls below 2? What if it was something like 1.7 in the US. What will that do to property values?
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Not good. Of course, all real estate is local so it depends on the market. But you need people to live in houses. More people = more demand. Prices fall if supply exceeds demand. If population/household formation increases, demand increases, if it falls demand falls.
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