Poll of the Day > Anyone here own any rental properties?

(+) Yeah! (+)

I was talking to someone on Xbox, and he said he owns a few dozen homes that he rents out for money. So I thought: Why don't I do the same thing?

But before I do that, I would like to have a massive amount of research to get done before I start thinking about it.

Is are there any rental homeowners? If so, could you give me insight on what its like being a landlord and stuff, etc?
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A few of my friends do (I don't actually). The biggest thing is just maintenance. Make sure when your tenant has a problem you are on top of it and fix it or send someone out to fix it.

Other then that just getting rent, and putting up with the excuses your tenants will have about why they can't pay rent. Then if they don't pay rent long enough, evicting them and getting someone who will pay rent.
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Dikitain posted...

A few of my friends do (I don't actually). The biggest thing is just maintenance. Make sure when your tenant has a problem you are on top of it and fix it or send someone out to fix it.

Other then that just getting rent, and putting up with the excuses your tenants will have about why they can't pay rent. Then if they don't pay rent long enough, evicting them and getting someone who will pay rent.

K

How many homes do they have? I've been looking at home prices, and although there are a few really cheap ones for only a few thousand, there are even more of them that are at 12,000 dollars. How much money should I have in my bank before I decide to buy and rent out a home, and how much money should I do when renevating it?
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thedeerzord posted...

I've been looking at home prices, and although there are a few really cheap ones for only a few thousand, there are even more of them that are at 12,000 dollars.

What middle of nowhere hell hole do you live in that a house is a "few thousand dollars"?

The main reasons most people don't rent out houses (besides not wanting the hassle of being a landlord) is that houses are expensive. Not exactly easy to own a "couple dozen houses" when that will cost you several million dollars to get.
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thedeerzord posted...

Dikitain posted...

A few of my friends do (I don't actually). The biggest thing is just maintenance. Make sure when your tenant has a problem you are on top of it and fix it or send someone out to fix it.

Other then that just getting rent, and putting up with the excuses your tenants will have about why they can't pay rent. Then if they don't pay rent long enough, evicting them and getting someone who will pay rent.

K

How many homes do they have? I've been looking at home prices, and although there are a few really cheap ones for only a few thousand, there are even more of them that are at 12,000 dollars. How much money should I have in my bank before I decide to buy and rent out a home, and how much money should I do when renevating it?

Most of them just have one. However the big difference is they lived in them for a few years (fixing all of the things they would need to) before renting them out. How much you are going to spend on renovations depends on the house, what building codes the area has, etc. Also you have to keep in mind that if you are looking in a low-income area, you are going to have to deal with HUD, which while they guarantee you get most of the rent they also have stricter guidelines for what they consider "rent-able".

I would say if you see a house for a few thousand, expect to spend as much if not more on renovations to make it livable. If you get one of the more expensive ones then you might be able to get away with only a few hundred in renovations. Again, it all depends on house condition and what the requirements are for renting in your area.
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Dynalo posted...

thedeerzord posted...

I've been looking at home prices, and although there are a few really cheap ones for only a few thousand, there are even more of them that are at 12,000 dollars.

What middle of nowhere hell hole do you live in that a house is a "few thousand dollars"?

The main reasons most people don't rent out houses (besides not wanting the hassle of being a landlord) is that houses are expensive. Not exactly easy to own a "couple dozen houses" when that will cost you several million dollars to get.

I live in Texas.

I'm not looking into houses in any major city area like Austin or Houston. I'm talking about in the armpits of Texas where houses will be relatively cheap that I can just rent out for so I can get a small amount of extra money coming in until I have enough to buy another one.

Of course, I'm not expecting to be successful, which is why I'm doing research.

Dynalo posted...

Not exactly easy to own a "couple dozen houses" when that will cost you several million dollars to get.

That's why I was looking into buying cheap ones for me to rent out just so I can get started.

When I starting getting a considerable amount of profits, then I'll starting looking into buying more expensive homes.
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Consider renting out the house you're in, if possible. Buy a second house to live in, move stuff from old house to new, fix up any issues in old house, then start renting it out. You'll already know about old house's problems and what needs attention. This way, you can possibly upgrade your house while having a renter pay part, or maybe even all of your new house's payments.

However, if you don't want to leave your current home, then maybe go for a nicer house that'll get you a higher rent, if you don't want to be the landlord to a lot of cheaper homes. Just some things to consider.
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I get that rural areas are cheaper, but how the fuck is there anywhere in America where houses are $12,000? Are you sure you're not missing a digit somewhere? RVs are way more expensive than that and that's like a shitty version of a house. Even a lot of just normal cars are more expensive.

Chewster posted...

I get that rural areas are cheaper, but how the fuck is there anywhere in America where houses are $12,000? Are you sure you're not missing a digit somewhere? RVs are way more expensive than that and that's like a shitty version of a house. Even a lot of just normal cars are more expensive.

I remember like 12 years ago being in Boston and seeing TV ads for property for $3k in Texas.
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Kyuubi4269 posted...

I remember like 12 years ago being in Boston and seeing TV ads for property for $3k in Texas.

Define "property". If you're just talking about an empty plot of land that's not crazy, but I doubt there was any inhabitable building there.

Chewster posted...

Kyuubi4269 posted...

I remember like 12 years ago being in Boston and seeing TV ads for property for $3k in Texas.

Define "property". If you're just talking about an empty plot of land that's not crazy, but I doubt there was any inhabitable building there.

The picture showed a two storey wood clad building. Looked shitty but kid me was hyped.
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Chewster posted...

I get that rural areas are cheaper, but how the fuck is there anywhere in America where houses are $12,000? Are you sure you're not missing a digit somewhere? RVs are way more expensive than that and that's like a shitty version of a house. Even a lot of just normal cars are more expensive.

Here (Rochester NY) you can get a foreclosure/auction for about that much in the inner city (Typically in the $5K - $15K range). I think houses go for around $40K - $60K if you are just buying them outright in the same area.
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Kyuubi4269 posted...

Chewster posted...

Kyuubi4269 posted...

I remember like 12 years ago being in Boston and seeing TV ads for property for $3k in Texas.

Define "property". If you're just talking about an empty plot of land that's not crazy, but I doubt there was any inhabitable building there.

The picture showed a two storey wood clad building. Looked shitty but kid me was hyped.

would have bought and renovated the shit out of it. >.>
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i would never want to be a landlord

too much shit to put up with if you get a tenant that doesn't want to or can't pay rent
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That's why a lot of rental owners just contract the work out to property management companies.

Though in my experience with property management companies, as a renter, they all suck ass. I couldn't go that route either because I'd feel guilty making my tenants put up with their bullshit.

Jen0125 posted...

i would never want to be a landlord

too much shit to put up with if you get a tenant that doesn't want to or can't pay rent

That's what landlords insurance is for.
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Chewster posted...

I get that rural areas are cheaper, but how the fuck is there anywhere in America where houses are $12,000? Are you sure you're not missing a digit somewhere? RVs are way more expensive than that and that's like a shitty version of a house. Even a lot of just normal cars are more expensive.

If you look on Zillow.com, you can find a few homes that are relatively cheap and around that price range.

Jen0125 posted...

i would never want to be a landlord

too much shit to put up with if you get a tenant that doesn't want to or can't pay rent

I think it would worth it in the long run if it meant gaining a lot of cash.
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Kyuubi4269 posted...

Jen0125 posted...

i would never want to be a landlord

too much shit to put up with if you get a tenant that doesn't want to or can't pay rent

That's what landlords insurance is for.

uh landlord's insurance only covers loss of rents if you're filing a claim because the home is damaged, it's a covered loss and the tenant needs to be put up in alternative housing and they aren't paying rent. at least in the US. idk where you're from.

thedeerzord posted...

I think it would worth it in the long run if it meant gaining a lot of cash.

you're not gonna gain a lot of cash until the mortgage is paid off.
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Jen0125 posted...

Kyuubi4269 posted...

Jen0125 posted...

i would never want to be a landlord

too much shit to put up with if you get a tenant that doesn't want to or can't pay rent

That's what landlords insurance is for.

uh landlord's insurance only covers loss of rents if you're filing a claim because the home is damaged, it's a covered loss and the tenant needs to be put up in alternative housing and they aren't paying rent. at least in the US. idk where you're from.

UK. Recent adverts spam that it will cover when tenants won't pay for any reason.
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Jen0125 posted...

Kyuubi4269 posted...

Jen0125 posted...

i would never want to be a landlord

too much shit to put up with if you get a tenant that doesn't want to or can't pay rent

That's what landlords insurance is for.

uh landlord's insurance only covers loss of rents if you're filing a claim because the home is damaged, it's a covered loss and the tenant needs to be put up in alternative housing and they aren't paying rent. at least in the US. idk where you're from.

thedeerzord posted...

I think it would worth it in the long run if it meant gaining a lot of cash.

you're not gonna gain a lot of cash until the mortgage is paid off.

:/ Hmm, I know that paying off mortgage can take a long time, but if I just buy a cheap house completely, and then renovate with a considerable budget, I could end up making a profit if I rent it out for a few years, and then when I have enough, I could just buy another one.

I'm not going to buy a super fucking expensive house in any major city area. I don't have the money nor income to be able to do that. So cheap houses are the way to go if I were to start right now.
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Kyuubi4269 posted...

UK. Recent adverts spam that it will cover when tenants won't pay for any reason.

yeah it's not like that in the US.

you'd have to pay to legally evict them and then sue them. chances are they don't have money to pay so even if there's a judgment you wont get the money. though they may get their wages garnished so you'll get like.. $25 a month.
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I rather have Reits(real estate investment trusts) than own rental properties. "REITs generally must pay out an amount equal to at least 90 percent of their taxable income in the form of dividends to shareholders"

https://en.wikipedia.org/wiki/Real_estate_investment_trust
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Chewster posted...

I get that rural areas are cheaper, but how the fuck is there anywhere in America where houses are $12,000? Are you sure you're not missing a digit somewhere? RVs are way more expensive than that and that's like a shitty version of a house. Even a lot of just normal cars are more expensive.

My question would be... Why the fuck would anyone rent if you can buy a house for that? Even on minimum wage you could easily afford to buy instead of rent.
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I own some. This relates to the US rental market.

You don't just acquire them for no money down. You need to have cash to either pay the full purchase price or fund the down payment.

If using financing (i.e., leverage), the down payment for a rental/income producing properties will typically be higher than a standard owner occupied residence (which is 20%).

If applicable, you'll also need more cash or financing for renovations and repairs before it can be shown to tenants, and a cash reserve for unexpected costs.

Then you'll have to consider rental rates to determine if the property can cash flow (i.e., rents cover debt service, maintenance, insurance, property taxes) or you'll initially be cash flow negative (so you'll be bearing out of pocket costs. The usual metric for valuation is the cap rate.

Another thing you'll have to think about is whether you want to self-manage or hire a property management company for a fee (I do the latter).

After that, you'll have to deal with rental income tax and depreciation, tenant and rental law issues, among other things.

So it's not like you can just wake up one day and go out and buy a bunch of rental properties with no money or financing. Also, in my experience, the cheaper the house the less desirable the area which leads to lower rents and lower quality tenants. Yet another thing to think about.

reruns_revenge posted...

the cheaper the house the less desirable the area which leads to lower rents and lower quality tenants. Yet another thing to think about.

I see. So issues should I consider when dealing with "lower quality tenants"
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Not paying rent, having to evict them, damaging property, dealing with illegal activity, etc.

Being a slum lord can be extremely profitable with the right scale, but it's nothing I ever wanted to try. I prefer more predictability and less volatility and hassle. In other words, more dependable tenants that pay rent, take care of their living space and tend to stay longer term, which leads to less turnover (and, thus, more income and lower costs).

reruns_revenge posted...

Not paying rent, having to evict them, damaging property, dealing with illegal activity, etc.

Being a slum lord can be extremely profitable with the right scale, but it's nothing I ever wanted to try. I prefer more predictability and less volatility and hassle. In other words, more dependable tenants that pay rent, take care of their living space and tend to stay longer term, which leads to less turnover (and, thus, more income and lower costs).

K, thanks for the info?

Any other things I should know about getting started and being a landlord?
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Among other things, consider the feasibility of buying a rental property based on the financial circumstances (your personal finances, whether you have co-owners/investors, do you pay cash or finance, will the property cash flow, etc.), ownership and business structure (will title be in your name or under an LLC, etc.), income expectations and investment horizons, and in particular whether you really want to be a landlord.

It's hard work if you don't keep on top of upkeep or failing to properly vet your tenants.

If you are a do-it-yourselfer, you can make good money.


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Watch Judge Judy, it's 89% of the cases, ok?
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I used to listen to a financial advice thing on the radio a lot when I used to have a working radio in my work truck.
A lot of calls were rental property owners asking for help, and the radio guy even mentioned multiple times that rental properties are hard to work with, and there's a pretty big chance of you either losing money on it or not making profit for many years.

But then again, he thinks trickle down economy works, so I'd take what he says with a grain of salt.
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lihlih posted...

I used to listen to a financial advice thing on the radio a lot when I used to have a working radio in my work truck.
A lot of calls were rental property owners asking for help, and the radio guy even mentioned multiple times that rental properties are hard to work with, and there's a pretty big chance of you either losing money on it or not making profit for many years.

But then again, he thinks trickle down economy works, so I'd take what he says with a grain of salt.

You ruined my high, ok?
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yeah everyone i talk to at work that i get on the phone as a customer always tells me to never become a landlord because it's more trouble than it's worth >_>
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