Who owns Rental Property for Investment? (Dallas: sale, real estate, renter)

[JenH1]

DH and I are interested in purchasing a rental property (single family home in a decent area). I'm trying to get as much info as possible before we take the plunge. Does anyone here own rental property? If so, how did you get started and did you use a real estate agent to help you locate a home? Any advice would be appreciated!

[richard88]

With the high sale price and property tax, is it still worth it for the rent to cover ? I guess just hoping the sale price keep increasing....

[unknown00]

what questions do you have? i own ~10 rental homes spread across DFW. i started with guidance from a family friend who was a home builder

Originally Posted by richard88

With the high sale price and property tax, is it still worth it for the rent to cover ? I guess just hoping the sale price keep increasing....

yes definitely still worth it, just stop buying so high. all of my rental properties are sub $250k at purchase

[tcualum]

Rental property can be profitable if:

1. You're able to buy when the homes are cheap. Right now the cost of properties suitable for rent is high so it may not be the best time to get into it.

2. You have time to manage it yourself.

3. You can find affordable properties in an attractive area.

4. You are handy so you can make at least small repairs without hiring anyone.

5. You have a healthy cash reserve in case of major repairs and/or you're unable to replace a tenant right away.

The more properties you own and manage yourself the more profitable it can be. I have a family friend who invested in property while he was working. While he was working he didn't have time to manage them himself so he basically broke even but during that time he was building up equity. Before he retired though he spent time learning how to do home repairs and how to manage his properties. When he retired he took over managing his properties which is basically a part-time job for him. Unlike his previous job though, his hours are flexible. In between his retirement fund and the income generated by the rental homes he is having a pretty comfortable retirement. He's got enough equity in the rental homes that when he gets to the point where he can't do it anymore he'll either be able to sell his business or make a profit off of selling the homes individually.

You have to be very savvy and careful though because I've also known people who made the wrong choices and ended up losing lots of money on such a scheme.

[charliebear414]

I have a rental property I have been managing for 3 years. I lived in it for 8 months before I moved to Los Angeles. Since then I had a variety of people moved in and out for 1 years lease to less.

I had a "friend" to to move-in to take care of it but took a turn for the worse case scenario. I kicked him out and he owes me lots of money for rent.

I had renters all over from CL from out of towners and in towners. I finally found one that is just the best in ways of paying and paying good. But before in one year it was smooth sailing another year it was rough, but not too rough. This was all done over the phone.

For maintenance, I had AC problems like every year. To have a reliable renter to be there when the AC tech guy is there and do all that jazz, is hard but when you do find a good renter is great.

Right now, I have a renter that pays and loves the place. And that's what you want happiness from both sides.

Out of the 3 bedrooms, I rented it out separately. I can tell you this, you can manage to do it all over the phone/email. But if you have 1 person renting out the whole house then, you better make sure they are reliable.

[TheOverdog]

With the high sale price and property tax, is it still worth it for the rent to cover ?

The price of ownership outstripping the price of renting is a very good sign that you either cannot afford your rental loan individually or that 'the market' is becoming over-saturated. Rent should exceed tax + monthly mortgage amount + regular maintenance no matter what the purchase price is. If you got the property cheap, then it should exceed those numbers by a lot.

[turf3]

If you plan to buy rental property for investment, it is paramount to keep in mind the adage "buy low, sell high". First of all, right now in the midst of Bubble II may not be the best time to buy, in a macro sense. But there will probably be deals to be had.

If a real estate agent is involved, you will instantly consume 6% in commish. Not recommended. I think your best bet would be a sell by owner scenario.

I've been out of Dallas RE for a while so I don't know the best way to find deals but if you can get to an owner while they are still thinking about selling that would be the time to buy.

If you can get a property that is cosmetically challenged but can be spiffed up, and you can do the work yourself, that would be a plus.

You'll need to consider very carefully where you want to have a rental property. For example, you could pay more for a house in a more "premium" area of town, which will require it to be in much nicer condition to secure the higher rents of that area, or you could go to a more downscale blue collar part of town where you will get less rent, but you don't have to keep the house looking as luxe, and where you will probably have a bigger selection of renters.

Don't forget also that every time you change tenants you will have to do a heavy clean and some repairs.

You need to run the numbers. How much you have to invest; how much you would borrow (if any) and the annual cost to service that debt; realistic rent income; realistic repair and maintenance costs; taxes, etc. If you think you can net more than with standard investments, go for it, if not, then don't. Don't forget the value of your own time in managing the property.

[bankingdom]

Check out www.biggerpockets.com for more info on renting and owning properties. LOTS of information on there. You can even make contacts with other owners to get some help.

I own properties in other cities and am moving to Dallas early next year and want to get a few properties in Dallas as well but all I'm hearing is the bubble and that I missed the boat.... Oh well. Will wait till prices come down a bit in a few years.

[MKartman]

Just from my experience, if you ever plan to move out of Texas, then you would also need to pay the taxes on rental income to residing state. (MA sucks any income even if it is earned in another state.)

[ITguy1981]

I am also in the same boat.. i think with the current market, the rents might not keep up with the mortgage payments and taxes. Thats what i think anyway, which areas are people investing in?