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One thing is that with all the naysayers listing all the problems I would make a list of all of them and start preparing how to avoid or minimize them so that they don't become chronic.
Thanks. That's exactly what I'm doing despite people here saying I clearly am not absorbing what they are saying.
Quote:
Originally Posted by aslowdodge
I'm not sure if people were one and done and sick of it or they never made changes in how they ran their properties. All of this is valid whether they are pro or con. Expect some lessons that cost you money, but what is important is to learn and not repeat mistakes.
At the beginning I made mistakes but made changes. Watch your property manager like a hawk. Be fair but don't expect miracles and total non participation on your behalf.
A lot of people who are wealthy own real estate, there must be a reason.
Absolutely. Nothing in life is a free lunch. I'm prepared to learn lessons from this but it doesn't mean it would be a bad idea. I appreciate the other side's views because those views help me prepare if I decide to go for it. This whole "you're clearly uneducated and aren't absorbing what we are saying" BS is non-necessary. Obviously I have a bias and I came to this forum to either confirm or deny that bias but those who have told me it's a bad idea still haven't given me convincing evidence. Others such as Lovehound and NoMoreSnowForMe have shown how to provide advice without putting down the other person's intellectual capacity and I appreciate them for their advice (as well as you aslowdodge and others here who I haven't named).
Quote:
Originally Posted by aslowdodge
For those that mentioned cpa, that is a must. But get one that knows real estate. They should not only do your taxes, but sit down and help you plan for the future.
I've noted that, thank you. As I said I am moving long-distance possibly to Canada so I will be hiring a cross-border CPA anyways in the near future so I will make sure this is part of that search. I have done my own taxes for 8 years meaning I am fairly competent in navigating most basic tax code I am in no way saying I am an expert. I learn as I go and as I have said I have not done thorough research as others here would have like me to but simply because I am still 6 months away from making this decision.
OP does not seem to realize that a building that is currently half renters (or 3/4 renters if you count the "under the table" ones ) -- and may be more, at some point? -- will have little value to anyone who is NOT an investor. So OP, please don't count on that $300,000.
Inflation...As someone has previously said inflation is never a guarantee (but neither are property values) but inflation has historically occurred since the United States and other world nations abandoned the gold standard. This is a reality of our life and anyone thinking there will be 0 inflation for the next 40 years are sadly mistaken (and I hope their investment portfolios are not a savings account...)
$115,000 projected with a normalized average inflation over 39 years (until I am 65) using past data (which is NOWHERE near accurate but a VERY rough estimate for our purposes) would be computed to be $458,000. OBVIOUSLY the purchasing power would not be any different than it is today because of said inflation, but my point is at the end of those 39 years someone else has built my a small savings account through their rental of the home.
OP does not seem to realize that a building that is currently half renters (or 3/4 renters if you count the "under the table" ones ) -- and may be more, at some point? -- will have little value to anyone who is NOT an investor. So OP, please don't count on that $300,000.
That's an important thing to keep in mind but not always true. Renters can reduce values and is why HOAs are starting to ban rentals completely.
I think,lovehound had a ton of good advice except for the part of don't do it (make up your own mind) and then 5% management fee. The lowest I've seen is 7 and most common was 8 to 10%.
I meant 5% at a MINIMUM. I'm barely breaking even (and that's including depreciation) so me hiring a property management company has always been out of the question.
OMG I wish I had never become a landlord. I am currently in the process of liquidating my business at one property per year (fastest my CPA tells me tax consequences will let me do it). First property already signed the ER and going on the market soon.
Location: Formerly Pleasanton Ca, now in Marietta Ga
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Quote:
Originally Posted by Lovehound
I meant 5% at a MINIMUM. I'm barely breaking even (and that's including depreciation) so me hiring a property management company has always been out of the question.
OMG I wish I had never become a landlord. I am currently in the process of liquidating my business at one property per year (fastest my CPA tells me tax consequences will let me do it). First property already signed the ER and going on the market soon.
Well I can certainly understand your frustration. Real estate is not as liquid as some other investment if you need to get in or out.
If you are selling retail to homeowners keep going, but if you think your property has investment appeal you might want to contact property managers in the area. They may have someone interested.
It's not the liquidity, I could sell my entire holdings within mere months. (There is the problem that leased properties would have to be sold to my fellow investors.) It's the taxes. If not for the taxes I could be out of the business before good swimming weather arrives.
I'm selling retail using a Realtor. My properties will appeal to both private parties buying their next home, and to investors too. I really did learn something buying properties, how to find commercially viable properties quickly, and all my holdings have great investment potential.
I just didn't realize that I don't have the type of personality or temperament to be a landlord. I'm retired. I want to really retire. I just don't want these business responsibilities any more.
It's still a good plan long term. I'm sure if I were willing to work another dozen years and hold my investments there is huge potential for profit. The problem is that it is disrupting my life to the point that I just want to go back to being an ordinary retiree.
If this were Vegas I'd tell you I just want to cash in my chips and go enjoy a few drinks and watch the show.
Thanks aslowdodge. I have many life scars and this will be simply another one. You grow, you live, you learn, you come to know. I'll be around the forum another few years until I have dissolved my investment, and then probably move on to entertainment sections of City-Data.
Meanwhile I will be happy to share what I have learned both good and bad.
I'm currently renting & plan to always do that as I live in a senior building. I previously owned a house. Prior to that I was a renter.
Maybe I was unusual but every landlord I ever had practically begged me not to leave. The only reason I did leave apartments was due to job changes, until I bought my house.
I always left an apartment looking better than I found it. Just the way I, & other folks my age, were raised. The last apartment I rented, previous to this one & prior to buying my house, I rented for 5 years.
I'm uncertain as to the idea of renting to younger folks as I don't know their values nowadays, but there are many of us who were & are good renters.
I'm currently renting & plan to always do that as I live in a senior building. I previously owned a house. Prior to that I was a renter.
Maybe I was unusual but every landlord I ever had practically begged me not to leave. The only reason I did leave apartments was due to job changes, until I bought my house.
I always left an apartment looking better than I found it. Just the way I, & other folks my age, were raised. The last apartment I rented, previous to this one & prior to buying my house, I rented for 5 years.
I'm uncertain as to the idea of renting to younger folks as I don't know their values nowadays, but there are many of us who were & are good renters.
LOL. It's not about not liking renters, or about all renters being awful. It's about the entire business and the risks and risk management, and the horrors of bad property managers, etc.
Just like any business, you need to learn about everything that may pose risks or affect your bottom line.
For instance, in retail, you need to minimize shoplifting, or employee theft, learn how to find effective managers, provide training that's cost-effective, etc.
With property management - whether a landlord does it him/herself or hires someone, there's a lot to learn to minimize risk and increase potential profits.
Part of that is finding low-risk tenants and keeping them as long as possible, while still making a profit. That's not easy to do, as I'm sure you've learned as a tenant. There are just as many bad landlords/managers out there as bad tenants :-)
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