Anyone own rentals?

[Murf'n'surf]

In my experience.... people are freaking animals! They live in filth and ruin your stuff/property. If its not them...its their animals. I could never rent my property unless it was mid to high end clients.

 

[Minh Nguyen]

I'm new to this also and just got my first rental not too long ago. And in the dfw metroplex starter homes to rent out is almost non-existent. I learn from my realestate buddy that has around 10 properties to fix the house up when you purchase it to future proof it for the next 15 years. That means new appliances, a.c., floors, etc...Tile up the floor for durability, even if it's the faux wood type and carpet only in the rooms. The last thing you want is a place where you constantly have to go back and fix minor stuff, eats too much of your valuable time. And choose carefully, 3/2 or 4/2 single story is great for rental. It can be fun buying and fixing up to rent, but it could be a nightmare if you choose wrong.

 

[Minh Nguyen]

Oh and go through the proper way to find renters...credit check, income, past history, references....if done correctly you and your renters will be happy. Good luck.

 

[djetok]

Oh and go through the proper way to find renters...credit check, income, past history, references....if done correctly you and your renters will be happy. Good luck.

Also your gut is typically right. We had one couple that was interested. My wife seemed to like them or she was just going through the motions. I met them and it didn't feel right so I walked away. My wife took their application fees for credit and background. We got home and my wife asked why I walked away. I said I didn't like them. We pulled background, bogus checks , drug charge , assault. It just didn't feel right and I know how hard it is too get someone out of the house for non payment.

 

[Gym]

Was about to post a question but basically we are looking at doing a rental instead of part of my house project!
The cost of putting on a ...large 3rd bay on the garage is the same cost it would be to buy a small house and some of the rehab of it and then rent it out.

Basically, my wife and I thought it would be cool if we found a property with a nice big garage, or no garage at all and build it and then rent the house out while I use the garage as storage for the boat.
I would assume a problem would be splitting electric.
Ideas or concerns on this one?
I have a financial plan or goal to have 3 small rentals before I retire. I figure the first one should be this boat storage deal!
Another question - would you take out a loan for 50% of the house your will be renting in order to purchase it or is it cash only or don't do it?
@007 I know you said you do this stuff and @Gym
So advice on going this route? Good or bad idea to steal the garage for my boat?

First let me congratulate you on your phenomenal recovery @Speedling. Although I'm sure you still have work to do there it's great to see you getting back to the task of family life.

I can throw out a couple of ideas that may be a consideration. Without having read this entire thread, I'll apologize now if I've reposted anybody's idea.
1) Anyway you decide to finance this, cash or 50% down, it should come close to paying for itself initially. That's before you factor in depreciation. Rember there IS a cost for using your own money. Depending on where you take it from, it may only be a only a quarter of a percent if taken from a savings account or it could be 5 - 8% if taken from an investment portfolio. The interest from any amount you borrow for investment property is fully deductible. So, if you pay a 5% rate for "non owner occupied" and your effective tax rate is 22% you are actually only paying 3.9%.
2) A garage addition can, at first glance, be written off over time unless used exclusively for you. So if the space is shared with a renter you have a foothold for a write off. My accountant, being anal but correct, would break it down to a percentage used by each but many accountants would give the wholè garage as a write off. Check with your accountant.
3) My criteria on buying rental property was to buy within a 25 mile radius of my home. That limits the need to hire out many issues reducing my income. This may be a factor depending on your skill level and availability for doing repairs.
4) As I mentioned, 3 years ago, on this thread I owned rental properties for 22 years with a very successful track record by following my personal criteria. 1) I would not rent a place I wouldn't live in with my family as that tends to attract people who won't care for your property. 2) As much as you might want/need that rent check I would leave a unit vacant until I found someone I liked. Once it took me 7 months. If I got their address early on in the application process I would do a drive by to check it out. Look at the car they drove up in. If it's a wreck your house may look the same when they're done with it. 3) Do your homework. Let them know you'll be running a standard financial & corey background check as part of the application process. Ask them if there is anything you should know before this is done. Have them front you the fees for these checks. If they have skin in the game they are unlikely to lie. If they walk they are hiding something. If you use a broker look over the paperwork DON'T take their word for it.

My 22 years in the rental business were, comparitively pleasant. I had only 3 legal issues as opposed to my friend who has legal issues monthly. Two of my issues were caused by sellers unwilling to loose a months rent, during the selling process, who rented to unscreened tenants that they dumped on me. Only 1 was a tenant that I put in. I was able to get full restitution from her without a court appearance. You will most likely be dealing with family's though. Hope this helps @Speedling. Good luck with the process. For the rest of you reading this I hope it helped put you to sleep.

 

[Speedling]

First let me congratulate you on your phenomenal recovery @Speedling. Although I'm sure you still have work to do there it's great to see you getting back to the task of family life.

I can throw out a couple of ideas that may be a consideration. Without having read this entire thread, I'll apologize now if I've reposted anybody's idea.
1) Anyway you decide to finance this, cash or 50% down, it should come close to paying for itself initially. That's before you factor in depreciation. Rember there IS a cost for using your own money. Depending on where you take it from, it may only be a only a quarter of a percent if taken from a savings account or it could be 5 - 8% if taken from an investment portfolio. The interest from any amount you borrow for investment property is fully deductible. So, if you pay a 5% rate for "non owner occupied" and your effective tax rate is 22% you are actually only paying 3.9%.
2) A garage addition can, at first glance, be written off over time unless used exclusively for you. So if the space is shared with a renter you have a foothold for a write off. My accountant, being anal but correct, would break it down to a percentage used by each but many accountants would give the wholè garage as a write off. Check with your accountant.
3) My criteria on buying rental property was to buy within a 25 mile radius of my home. That limits the need to hire out many issues reducing my income. This may be a factor depending on your skill level and availability for doing repairs.
4) As I mentioned, 3 years ago, on this thread I owned rental properties for 22 years with a very successful track record by following my personal criteria. 1) I would not rent a place I wouldn't live in with my family as that tends to attract people who won't care for your property. 2) As much as you might want/need that rent check I would leave a unit vacant until I found someone I liked. Once it took me 7 months. If I got their address early on in the application process I would do a drive by to check it out. Look at the car they drove up in. If it's a wreck your house may look the same when they're done with it. 3) Do your homework. Let them know you'll be running a standard financial & corey background check as part of the application process. Ask them if there is anything you should know before this is done. Have them front you the fees for these checks. If they have skin in the game they are unlikely to lie. If they walk they are hiding something. If you use a broker look over the paperwork DON'T take their word for it.

My 22 years in the rental business were, comparitively pleasant. I had only 3 legal issues as opposed to my friend who has legal issues monthly. Two of my issues were caused by sellers unwilling to loose a months rent, during the selling process, who rented to unscreened tenants that they dumped on me. Only 1 was a tenant that I put in. I was able to get full restitution from her without a court appearance. You will most likely be dealing with family's though. Hope this helps @Speedling. Good luck with the process. For the rest of you reading this I hope it helped put you to sleep.

Thanks!
I have been working my tail off more hours than most people are awake! We made a rough financial plan after the stroke and i am trying my hardest to get ahead of it to make things easier when my kids are in high school.

 

[Khalid]

I am about to jump into the rental game!
we decided to do it after several people came by offering to rent the house after looking at the neighbors house that is for sale. The amount we can get for rent is crazy!
We meet with the most promising couple tonight. All goes well we will be moving out and finding a place to stay!
a little scary honestly but the house should get paid off pretty quick if they accept our terms.

Any tips for a noob?
If they like the house we talk numbers tonight as well. My part time boss at the fireworks store was a realtor for over 40 years so she is helping me sort it all out.
Rent would be 1800 a month 2 year lease agreement with safety and 1st month down. Family with kids just into high school so I doubt they would leave before kids are done.

I own several rental properties in Texas and Louisiana. If I were to give only one advice it would be: rent ONLY to those with good credit, regardless what their excuses for bad credit is.

I learned the hard way and since adopting this rule 10 years ago, I've had great luck and easy landlord experience.

I don't use anyone to manage my properties (after finding the tenant). I don't see value by giving a realtor 10% of rent just to make an occasional phone call to a repairsman


Good luck!

 

[Speedling]

I own several rental properties in Texas and Louisiana. If I were to give only one advice it would be: rent ONLY to those with good credit, regardless what their excuses for bad credit is.

I learned the hard way and since adopting this rule 10 years ago, I've had great luck and easy landlord experience.

I don't use anyone to manage my properties (after finding the tenant). I don't see value by giving a realtor 10% of rent just to make an occasional phone call to a repairsman


Good luck!

So first time would u recommend using realtor to find tenant?

 

[Khalid]

So first time would u recommend using realtor to find tenant?

It depends on your market. Some markets are easier than others to find tenants. Also, it depends on whether you have time to interact with and screen them

 

[Speedling]

It depends on your market. Some markets are easier than others to find tenants. Also, it depends on whether you have time to interact with and screen them

Market here is probably one of the hottest around.
The time I have however, will be limited because I am hard pressed on time with everything! I keep pushing forward to meet my goals and deadlines, lol even though I made them myself! Working two jobs means very little time available so time becomes precious. I would hope that getting the rental would alleviate the need for so many hours worked and I would be able to relax a bit more! It would hopefully/Lord willing, make my goals by the time I am 40 more easily attainable.

 

[dan144k]

Any suggestions for finding an apartment building. Looking for a 4 to 8 flat. Nw suburbs of Chicago.

My grandparents have owned a 6 flat in Glenview for years, and I have always done most of the maintenence. Personally I don't consider myself the best in dealing with people,

Have heard rumors of house rentals tied with corporations always relocating people, which I would consider high end clients, but have no idea how to locate that market.

 

[Murf'n'surf]

Any suggestions for finding an apartment building. Looking for a 4 to 8 flat. Nw suburbs of Chicago.

My grandparents have owned a 6 flat in Glenview for years, and I have always done most of the maintenence. Personally I don't consider myself the best in dealing with people,

Have heard rumors of house rentals tied with corporations always relocating people, which I would consider high end clients, but have no idea how to locate that market.

Try loopnet

http://www.loopnet.com/for-sale/multifamily/?bb=0j69n0yizJ6t9l7qE

 

[fireflymedic]

Judge Judy says take lots of pictures, before they move in and after they move out!

 

[Gym]

Judge Judy says take lots of pictures, before they move in and after they move out!

You should actually have a condition statement signed by both parties at the beginning of the rental. If there are any pre existing conditions they should be noted. You can't prove when the pictures were taken and a tenant can always claim they were there prior to their occupancy.

 

[007]

So, I've been down this road. A few problems are:
1. Finding the house you'd be willing to rent for a price you'd be willing to pay with a garage big enough for the boat. Problematic where I live.
2. Does the garage share a driveway with the house? What if the tenant has a car parked there when you want to get the boat and they are no where to be found? Sure you could tell them not to block the drive, but tenants and friends of tenants often forget those little details.
3. As you mentioned, electric. It would be easiest if the electric was separate of the service to the home...which is more$$$

In the end, we never found a match. Doesn't mean you won't.

And I agree, being a landlord is a job. We have rentals. When its good, it runs on its own. When its bad...it consumes your life and taps your pocketbook. Best I can tell you is that the quality of your landlord experience is made or broken at least signing in most cases. Have a strong lease, screen your tenants, be empthetic to peoples problems (but not responsible for them), and set the right expectations. Every single time we've lowered our standards out of financial need to get a place rented its caused us problems. Still to your guns, even if you have to swallow an extra month or two of mortgage with no rental income. IF you can't do that, rental might be the wrong game.

Was about to post a question but basically we are looking at doing a rental instead of part of my house project!
The cost of putting on a ...large 3rd bay on the garage is the same cost it would be to buy a small house and some of the rehab of it and then rent it out.

Basically, my wife and I thought it would be cool if we found a property with a nice big garage, or no garage at all and build it and then rent the house out while I use the garage as storage for the boat.
I would assume a problem would be splitting electric.
Ideas or concerns on this one?
I have a financial plan or goal to have 3 small rentals before I retire. I figure the first one should be this boat storage deal!
Another question - would you take out a loan for 50% of the house your will be renting in order to purchase it or is it cash only or don't do it?
@007 I know you said you do this stuff and @Gym
So advice on going this route? Good or bad idea to steal the garage for my boat?

 

[seanmclean]

I have one, it works out okay for the most part. I generally screen a lot of applicants before I offer the place to a tenant. Even without causing me any headaches, I still hate the thing. If it wasn't so far underwater, I'd sell it in a heartbeat. Breaking even on it now, I just tell myself that one day it'll create income.