Tips for renting a home?

[terrible one]

Looking at possibly buying a home in 2/3 years, probably somewhere in the south (NC/SC/GA or maybe TX). And I would I like to rent it out utilizing a property management company.

Probably 3-4 bedrooms, maybe around $150-200k, near a decent sized metro population.

Is anyone currently doing this? I'd like to make a profit on it, nothing crazy just some extra income monthly. I'd ideally keep the home long term 20-30 years and eventually sell it depending on the market.

Thanks for all the help.

 

[HillbillyHotRod]

You will have find one where the PITI is less then what the rents are. This is kind of hard to do on a initial investment unless you put a lot down on it. I have one and has been good income but just now had to replace the AC. Remember you are responsible for the upkeep on it. If something goes wrong like the AC it can cost you. On the other side you have the depreciation and the maintenance will lower my taxes quite a bit. Bad part about that is unless you plan to live in it for a time prior to selling all the deprecation is factored back into your taxes. You need to get with a tax person to figure all that out. Good luck

 

[Equalbracket]

In that scenario there's absolutely zero profit/income to be had, in Texas anyway. That price range you're looking at a 10+ year old house and a thousand dollar note.

New construction is absolutely booming and there's a huge market for people that are willing and wanting to rent a new spec for 1500 a month. I see alot of headaches and little to gain.

 

[Screw-Rice]

Looking at possibly buying a home in 2/3 years, probably somewhere in the south (NC/SC/GA or maybe TX). And I would I like to rent it out utilizing a property management company.

Probably 3-4 bedrooms, maybe around $150-200k, near a decent sized metro population.

Is anyone currently doing this? I'd like to make a profit on it, nothing crazy just some extra income monthly. I'd ideally keep the home long term 20-30 years and eventually sell it depending on the market.

Thanks for all the help.

There are tons of variables in here. Are you planning on living in this house, or strictly buying an investment property?

 

[M91196]

Look for multi unit property you can afford

 

[Screw-Rice]

Look for multi unit property you can afford

That was going to be my suggestion if it's going to be owner occupied. He can do an FHA loan up to a 4 unit.

 

[terrible one]

I could live in it at first and then rent it out.

 

[Screw-Rice]

I could live in it at first and then rent it out.

In that case I would look for a duplex, triplex, or fourplex if you can. Live in one, rent the others out.

 

[PhoenixM3]

Looking at possibly buying a home in 2/3 years, probably somewhere in the south (NC/SC/GA or maybe TX). And I would I like to rent it out utilizing a property management company.

Probably 3-4 bedrooms, maybe around $150-200k, near a decent sized metro population.

Is anyone currently doing this? I'd like to make a profit on it, nothing crazy just some extra income monthly. I'd ideally keep the home long term 20-30 years and eventually sell it depending on the market.

Thanks for all the help.

First off, skip a property manager. They'll skim 10% off your monthly income and really aren't earning it. You can do simple background checks on potential tenants to avoid the headache of eviction later. Secondly, if you're handy and located close the to property you can do some of the easy repairs. You'd be amazed how many young renters can't tighten a toilet seat or change a furnace filter. Finally, don't think you're going to produce a lot of income in the beginning, but understand and take joy in the fact that someone else is paying for your home.

 

[Adower]

My parents always told me if you're going to rent out then get a duplex at minimum. You need to be able to sustain the house if it's vacant a month or more. You can't can't do that with a single household.

Also depending on what loan you get you need to live in the house a certain amount of time before you can rent it. If I remember correctly my first home with an fha loan had stipulations.

 

[IronSnake]

Charleston, SC is the land of rented out properties. A 2k square foot home within 20 minutes of downtown rents for around 2-2500 a month usually. Especially if it's nice.

However, be prepared to pay 275k for it.

 

[colin450]

I would skip the property management company. If you buy something decent you aren't going to need it. At some point if you have multiple properties and you can't manage it yourself that's probably when you'll want to hire a property management company. Just hire someone as needed if something comes up. I bought a two family house in my area about 5 years ago, make a profit every month and the property value is up quite a bit from what I bought it at.

 

[JetmechF16]

I have one rental, it's my first house that I decided to keep as an investment property after I built the new house. It is possible to make good profits if you are smart about what area you buy in and of course how much you pay for the house. I kind of got lucky with mine since I bought it in '08 when values were low. It is also a neighborhood that is popular with small families since it is located adjacent to a huge brand new school. I get $1600/month for rent and my total mortgage payment including taxes and insurance is $800.

I did not use a realtor to list my property nor do I use a management company. You can list a property for free on Zillow, then once you get a list of "finalists" you can vet them on a site called www.mysmartmove.com. I used legalcontracts.com to create my lease contract.

Good luck OP and be sure to do your homework before deciding!

 

[einehund]

I ended up using a management company on my home as i am not even on the same continent and didn't want to deal with any hassles. I also have a home warranty for when big stuff breaks, it doesnt cost me very much at all.

 

[terrible one]

Charleston, SC is the land of rented out properties. A 2k square foot home within 20 minutes of downtown rents for around 2-2500 a month usually. Especially if it's nice.

However, be prepared to pay 275k for it.

Charleston was one of the areas I was looking at, for a $250k house if I put down $50k what's the mortgage rate usually? I'd be a first time home owner with credit score in the high 700s/ low 800s if that matters

 

[Screw-Rice]

Charleston was one of the areas I was looking at, for a $250k house if I put down $50k what's the mortgage rate usually? I'd be a first time home owner with credit score in the high 700s/ low 800s if that matters

You're likely going to be around 4-4.5% since you'll be living there too. Standalone investment property is a bit higher.

 

[IronSnake]

Charleston was one of the areas I was looking at, for a $250k house if I put down $50k what's the mortgage rate usually? I'd be a first time home owner with credit score in the high 700s/ low 800s if that matters

My first time buyer rate was 3.65%. It's gone up since.

For 250k, you'll struggle to get anything above 1500 square feet and single story. Not very many houses around here that are decent or don't get put under water during a bad storm for less.

If you're going to live in it, taxes will be about 1400 a year. If it's a rental property, you'll be paying around 3500-4000 in property taxes.

At that down payment, luckily you drop PMI and all the fluff that comes with an FHA. I know my mortgage is around 1000 before taxes and insurance and PMI. Hopefully I can refi next year and get rid of the damn PMI. 200 bucks that does absolutely nothing.

 

[terrible one]

Thank you,

I was looking around a 3bd/2ba and about 1500sq feet. I like the smaller homes especially for the first one.
Next I'd have to make sure it was out of the flood zone, I'm sure flood insurance isn't cheap there.