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For my husband and I we have been landlords for 3 years now. Each year our insurance goes up quite a bit on each house, also we have city fees(sewer) we must pay and they have increased over the years also. That and just costs to repair has increased some to. We have to increase rent to keep up and make profit to live off of.. Which we barely do now. We hope to sell most off within this year and move!
However, we have never increased rent while a tenant still lived there. We always wait till they leave and then increase it when we list it for rent.
All that's doing is pricing tenants out after a while.
I don't know if this is true everywhere, but in my area the housing crisis was more severe than the recession. Many middle and working class people lost their homes but a lot of them kept their jobs.
The result has been that now you have people with income but no credit. The foreclosures they engaged in on their underwater houses have obliterated their ability to get any more home loans. The housing crisis meant that new housing stock ground to a complete halt. From 2009-13 hardly any new homes were built in my area and zero multifamily units, even though the population increased. Thus, you have people with money to spend who need housing and a decreased stock of housing so rents go up to an extreme level. It's really hard for younger and poorer people.
My mortgage is $400 less than what my house would rent for. Maybe $500. That's thousands of dollars per year, lots of money. The lowest apartment rents available, even for slumlord places are less than my house mortgage. What I pay in mortgage on a modest house with a garage and some land, in the rental market, would get me a mobile home and that would be lucky. I'm only paying about $150 more than renters pay for bedrooms in someone else's house these days.
For my husband and I we have been landlords for 3 years now. Each year our insurance goes up quite a bit on each house, also we have city fees(sewer) we must pay and they have increased over the years also. That and just costs to repair has increased some to. We have to increase rent to keep up and make profit to live off of.. Which we barely do now. We hope to sell most off within this year and move!
However, we have never increased rent while a tenant still lived there. We always wait till they leave and then increase it when we list it for rent.
I have had some tenants for 8 years plus I would be selling and barely making it if I used your business plan.
All that's doing is pricing tenants out after a while.
We are still right at comparable units within the area. Our increases have never been high and we have done it once maybe twice in the years we have had them. We also have never had trouble re renting a place out. There is a higher demand at least in our area and is quite fast to find new tenants. If we ever did have trouble renting out a unit, we would lower price.
I have had some tenants for 8 years plus I would be selling and barely making it if I used your business plan.
The longest we have had a tenant is 2 years. Most last 6mo to a year and typically we have to evict many for non payment. Unfortunately the area where our rentals are is going downhill. we bought all our houses (single family and duplex) for $12k and under. Most in good shape and ready to rent. We get $400 to $625 per unit which is average there. Its been enough to support us comfortably the past 3 years. We do not make a killing off it, but its enough to pay mortgage/bills, vacation, ect.
It would be different if we had long lasting tenants. We have an older lady now I believe will stay for many years though. She has been one of the best.
Even with the large down payment (Or PMI if you don't have the 20%) it's still cheaper around here to own than rent. I bought my rental house in fact. My "rent" went down $350 monthly. And yes that's including taxes, home warranty and insurance. The home warranty covers everthing from electrical, plumbing and appliances/AC/Furnance etc. I bank the extra funds toward maintenance and emergency house repairs. Plus houses smaller and not as updated as mine are renting even higher than what I was paying for my home a few months ago. I would be saving about $500-$600 right now if I had stayed renting it and they raised it to match the market rent in the area.
But this doesn't of course apply to all areas. I just got lucky that I do live in an area that's it's way cheaper to own than rent.
This only happens in areas where most people can't or don't want to buy homes: i.e. the hood. Even after the market crash Seattle neighborhoods that has any semblance of decent schools were still far more expensive to buy in vs rent. With 20% down we were able to break even more or less with rent on a monthly payment basis, but not on a cost basis. Owning is a luxury, you pay more for it where people are willing and able to pay more for it.
The longest we have had a tenant is 2 years. Most last 6mo to a year and typically we have to evict many for non payment. Unfortunately the area where our rentals are is going downhill. we bought all our houses (single family and duplex) for $12k and under. Most in good shape and ready to rent. We get $400 to $625 per unit which is average there. Its been enough to support us comfortably the past 3 years. We do not make a killing off it, but its enough to pay mortgage/bills, vacation, ect.
It would be different if we had long lasting tenants. We have an older lady now I believe will stay for many years though. She has been one of the best.
Just a shot in the dark but you cannot run lower income the same as middle income and up. As the property goes down you must adjust faster then you tenants change. There is more work in lower income but there is also better profit on cash flow. My attitude toward lower income is a 180 from my higher end properties. You have to train them. I see your in Ohio have you ever read Michael Rossi e book 1 MINUTE TO RENTAL PROPERTY RICHES.
I never see rents going down. I know that some landlords won't raise the rents when they have a good tenant so they won't move, but I always see them staying the same for a while or going up.
1. When the rent goes up u should be able to request certain things like a new kitchen floor
2. I can't believe there was a white floor in the kitchen when I moved in. That is not the color you want for a kitchen floor.
1. You can ask for anything you want. Having your request granted is something else.
2. I've never had an issue with any light-colored kitchen floor. If it bothers you, then rent somewhere else where the food you drop on the floor blends right in and saves you cleaning it up.
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