Quote:
Originally Posted by Shazam72
You should be in good shape as long as inflation doesn't run rampid. Even then, your rent receipts will probably increase with inflation.
Congrats!
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Each MFR [apartment Building] that we have owned, we have made a point of never raising rent. Once our rent levels have been 'set' there they stay.
Both sets of my grandparents had rental units. They both lost their farms in the dust-bowl, lost their bank accounts in the Depression and moved to California. Both sets began farming in the central valley of California.
One set of grandparents built a dairy, and then a house, and then next to the house small lean-to cabins to house renters. They added more one-room units each year until they got to over a dozen. As the decades went by they ended up housing mostly elderly and handicapped, and generally as the years went by they ended up burying each of their renters.
The other set of grandparents worked at a dairy for the every twelve-hour milking and then at a cannery for eight hours shifts. They bought a city lot and from scratch they built themselves a home. Then bought another lot and from scratch built another home and filled it with renters. They continued this until finally when they were too old they stopped and had 28 rental houses.
They rented to families. Each house' rent was set current the year that it was completed, and that rent level was never changed [except if the husband had a severe illness]. In the 1990's when those grandparents died, there were a large host of families that were there and who still were very devoted to them.
They had to sell off many of those rental houses to pay for their medical treatment during there last couple of years. But when my father finally got the books he saw that those rental houses in 1995 were still paying $30 to $35 monthly rent.
Renter loyalty was very strong on the renters. Because they had been able to live there for decades without rent increases, and even with inflation, and when children moving away, but the older parents were financially stable and could always afford to stay in their 'family home'. And that meant a lot to those families.
As a child I saw how those renter's families treated my grandparents. I did not know at the time that their rents were obscenely low. Just that my grandparents never had 'bad renters', most renters went out of their way to keep their homes fixed and in good repair. And seemed to take pride in their homes. And they always shared veggies from their gardens with my grandparents.
Now I have not inherited a dime.
But I have inherited the opportunity of growing up watching how two sets of people have handled renters, and how the renters responded to them.
I hear other land-lords talking about 'bad renters', and over the years we have experienced that too.
I set our rents to 80% of the local neighborhood average. With Multi-Family-Residences it covers: the mortgage, the garbage, sewer, water, and an extra payment on the principle.
The equity grows each month, and without looking at inflated market values of housing my Net Worth grows each month.
I do not need the rents to be any higher.
Any higher and I would possibly be forced to begin paying income taxes.
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