U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Real Estate
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 05-15-2018, 11:34 AM
 
Location: Formerly Pleasanton Ca, now in Marietta Ga
4,115 posts, read 3,410,513 times
Reputation: 5648

Advertisements

Quote:
Originally Posted by chao View Post
except that you are limited to max of 10 mortgage and a lot house is not mortgage approved (foreclosed)
generally speaking, mortgage is great, but cash has it's advantage in many cases
True, but there are some ways to get beyond 10, just a bit harder and more hoops to jump through.
Cash is great on the purchase as it gives you an edge.
Reply With Quote Quick reply to this message

 
Old 05-15-2018, 11:37 AM
 
Location: Formerly Pleasanton Ca, now in Marietta Ga
4,115 posts, read 3,410,513 times
Reputation: 5648
Quote:
Originally Posted by chao View Post
i personally had both cash owned house and mortgaged house, but regardless how i purchased, i always try to find quality tenant as soon as i can, i wont sitting on it and take my time just because my property is paid in full, when you are not making income that you could, you are losing income, that goes for both mortgage or cash property.

on top of that, even cash property has withholding cost such as water/gas/electric, especially gas during winter could goes for $200+ and without tenant, that's few hundreds utilities bill out of your own pocket.
Not to mention typically your insurance for an unoccupied unit is higher than one that is rented. Plus you are still paying property taxes. Not to mention vandalism or a squatter or copper being stolen.
Reply With Quote Quick reply to this message
 
Old 05-15-2018, 12:18 PM
 
25,866 posts, read 49,763,368 times
Reputation: 19313
Yes... but the pitfalls are there for the unwary... very easy to run afoul and I have seen it happen and end badly.

The business aspect is paramount and as such, the business person is held to a higher standard to know the law.

I've helped several of my friends get into rental property... mostly duplex to 4-plex property where they lived in one of the units... it was a great financial move and let them obtain the lifestyle they wanted when they cashed out and bought their forever homes... none stayed in more that 10-12 years.

In addition... if you have to call someone for every little thing... it is not the business for you... you have to be able to shop and buy smart... the margins just are not there otherwise on single family or small plexes.
Reply With Quote Quick reply to this message
 
Old 05-20-2018, 12:07 PM
 
71 posts, read 38,586 times
Reputation: 257
I own two townhouses out of state that are managed by property managers and I am very happy. However I treat this as a business so I am prepared to sometimes put the required money and/or time to it.

As someone else in the thread said if you have good properties in good locations you should do ok. And to me anyway "good location" means good proximity to things like jobs, shopping, entertainment, etc, not necessarily that it's a nice area. One of my units is in an urban location that some people don't think is the best area. It's not a dangerous area, but it is urban. However, the location is *prime* (like amazingly prime) so people will pay up for it.

Keep in mind that not all properties are necessarily good candidates for renting. If the location is too far, there's no rental demand, there's lots of other rentals in the area, etc then just buying a place and putting a for rent sign in the yard isn't going to cut it. It will sit vacant draining money, or worse you'll get desperate and rent it to a bad tenant in hopes they won't be. (vacancy is better than bad tenant that trashes the place in my opinion). Do your research.

Also, screen screen screen your tenants. Prop manager requires 700+ FICO, solid rental history, solid job history or income and no evictions. We DO NOT make exceptions. One unit took two months to rent because several applicants were rejected. However, the tenants can make or break you. In fact the tenants are your business.

One other thing if you have a good tenant refrain from rent increases, or at least explain to them reasons for rent increases so they know you're not just taking advantage of them. For example property taxes are going up and I am going to absorb most of the increase but I do need to to a small increase to help with these costs... most tenants will be reasonable if you explain it. And give them perks if you can like upgrades or whatever else to keep them happy. Again the tenants can make or break you so do whatever you can to keep a good tenant happy and they'll keep you happy.

P.S. I am a renter myself even though I own rentals, so I can guarantee there are good renters out there!

Last edited by luckydogg; 05-20-2018 at 12:25 PM..
Reply With Quote Quick reply to this message
 
Old 05-20-2018, 01:38 PM
 
Location: Honolulu, HI
4,636 posts, read 1,156,512 times
Reputation: 6627
I don’t own a house for income but I plan to in the future. I’ve seen the success stories of people becoming independently wealthy and the horror stories of people going to court in order to evict a tenant who is trashing the place.

I plan to do far more research before getting into it, but I have to give it a shot eventually. Threads like this are very informative and provide amazing insight
Reply With Quote Quick reply to this message
 
Old 05-20-2018, 01:41 PM
 
Location: Floribama
13,527 posts, read 29,479,721 times
Reputation: 11934
Quote:
One other thing if you have a good tenant refrain from rent increases, or at least explain to them reasons for rent increases so they know you're not just taking advantage of them. For example property taxes are going up and I am going to absorb most of the increase but I do need to to a small increase to help with these costs... most tenants will be reasonable if you explain it. And give them perks if you can like upgrades or whatever else to keep them happy. Again the tenants can make or break you so do whatever you can to keep a good tenant happy and they'll keep you happy.
I agree with this. One of my rentals has had the same tenant for the past 7 years, and that whole time I have only raised the rent once ($50 due to sewage rate increase from the city). They take care of the place and always let me know if thereís a problem, so I do my best to keep them there, despite the fact that the rent is less than market rate.
Reply With Quote Quick reply to this message
 
Old 05-21-2018, 07:19 AM
 
71 posts, read 38,586 times
Reputation: 257
Quote:
Originally Posted by southernnaturelover View Post
I agree with this. One of my rentals has had the same tenant for the past 7 years, and that whole time I have only raised the rent once ($50 due to sewage rate increase from the city). They take care of the place and always let me know if there’s a problem, so I do my best to keep them there, despite the fact that the rent is less than market rate.
That's very smart and I hope my tenant does stay for 7 years, and if so I will try to never raise the rent. I was telling a friend of mine the other day when you have a good tenant it's almost like they are paying you to take care and manage your investment for you, and possibly pay your mortgage too. What could be a better deal than that?

It's amazing how many landlords don't get this though, they'll raise the rent at the drop of a hat even on good tenants to try and squeeze every last penny out of them. I know it just happened to me when my last building was sold to Chinese investors and they raised everyone's rent 20% at one time even though I pay on time, don't cause problems, don't complain and keep the place clean and spotless - so I said goodbye and good riddance, I didn't even try and negotiate with them because I was so put off. Very short sighted in my opinion...
Reply With Quote Quick reply to this message
 
Old 05-21-2018, 11:15 AM
 
110 posts, read 39,987 times
Reputation: 72
Quote:
Originally Posted by luckydogg View Post
That's very smart and I hope my tenant does stay for 7 years, and if so I will try to never raise the rent. I was telling a friend of mine the other day when you have a good tenant it's almost like they are paying you to take care and manage your investment for you, and possibly pay your mortgage too. What could be a better deal than that?

It's amazing how many landlords don't get this though, they'll raise the rent at the drop of a hat even on good tenants to try and squeeze every last penny out of them. I know it just happened to me when my last building was sold to Chinese investors and they raised everyone's rent 20% at one time even though I pay on time, don't cause problems, don't complain and keep the place clean and spotless - so I said goodbye and good riddance, I didn't even try and negotiate with them because I was so put off. Very short sighted in my opinion...
yes and no
generally you want keep good tenant even if that's slightly less profit than market price, however, in many cases raise rent is worth the hassle and find average tenant is not so difficult (depends on city and states law)

take that 20% rent increase for example, if the 20% rent increase is still within market price and landlord have no problem finding new tenant with new rent range, why wont they increase the rent?

landlord love good tenant, but they dont love tenant enough to lose 20% rent.

if i have to choose average tenant that pays me $1200 or great tenant that pays me $1000 a month, i will always choose $1200 average tenant, that's if $1200 is still acceptable by the market within the area and i dont have problem finding new tenants.

it's all about maximize profit that's still within market acceptance and still able to find average or above average tenants.
Reply With Quote Quick reply to this message
 
Old 05-21-2018, 11:38 AM
 
98 posts, read 40,441 times
Reputation: 248
Yikes chao! That would be my approach to renting out apartment units but NOT a house. A great tenant in a house is worth more than $200 or $400 a month - they don’t call about small problems, they fix things themselves without calling for a ($$) repair service, they garden like it is their own yard, and they keep the house pristine. They are members of the neighborhood and community and they help to keep all of the property values increasing. No way would I risk losing that tenant for an unnecessary price increase.
Reply With Quote Quick reply to this message
 
Old 05-21-2018, 01:26 PM
 
110 posts, read 39,987 times
Reputation: 72
Quote:
Originally Posted by CapitalBat View Post
Yikes chao! That would be my approach to renting out apartment units but NOT a house. A great tenant in a house is worth more than $200 or $400 a month - they donít call about small problems, they fix things themselves without calling for a ($$) repair service, they garden like it is their own yard, and they keep the house pristine. They are members of the neighborhood and community and they help to keep all of the property values increasing. No way would I risk losing that tenant for an unnecessary price increase.
$400 a month is $4800 a year, let's say tenant stays for 3 years, i personally will not giving up $14,400 in 3 years just so i can "upgrade" my average tenant to great tenant. not to mention those example of 7 years...that's a lot money. ($33,600)

in another word, i can pay way less than $4800/yearly for repairs/gardener yearly and still have my property end up like having a great tenant even with average tenant.

not down play the importance of good tenant, but if you are investing in rental property, then dont get attached to the house too much, it's all about numbers.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate
Follow City-Data.com founder on our Forum or

All times are GMT -6.

© 2005-2018, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top