Multi-unit homes give retirees income and freedom.
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I've watched friends struggle with bad tenants in their multi family property. It's awkward living in the same building when you're throwing your evicted tenants belongings out of the window onto the street. Personally I think I would rather invest in a vacation property with weekly rentals and use it in the off season then live with tenants.
We are looking at going back into apartment buildings. This time we will only do college students. I would expect they will generally trash the units, however the leases will be written in a manner that they all leave at the end of each school year. The buildings will be empty 2 months every year. We should not have to deal with many evictions this way. Any bad tenants will only rent from us once.
The agents will call their relatives to fix the leaky faucet and then charge you double than if you had just called the plumber yourself. Agents can't be trusted to work for your interest.
Judge Judy would be out of business if it weren't for rental disputes....LOL
I know many people have had bad experiences, to each his own, I just want to add, I've found it profitable. Right now I don't have rentals as I've decided to seel some and develop some of my properties.
My apartments were in lower income areas, but they paid a deposit and paid their rent or were promptly evicted. I didn't manage these, just received emails of the finances and money directly deposited to my bank account.
My smaller units that I managed were in beach towns renting to young professionals, they kept the places nice and paid their rent. Unfortunately for them, with a little math I found I could develop and sell the properties for much more money.
I'm undecided as to whether I will buy more after selling my new builds.
This is just one type of income some retirees who are seeking more income should consider, I know many people do not live in an area that is good for rentals, I also understand it is an uncomfortable proposition for others. To each his own.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Quote:
Originally Posted by marino760
They can also be a tax nightmare.
My income props are a tax DREAM for me;
I can schedule capital and expensed items at end of yr during high earnings and reduce overall rates. Last yr when I took several months off for remodeling, I was able to roll a bunch of fix-up expenses in and get tax rate to zero, so I could then do some ROTH rolls till I got income tax rate back up to 5%. (LT property valuations increased significantly due to remodels, and I will reap those gains later)
I have been able to favorably tweak my tax rates using my income props. Sometimes using 1031's, and other times realizing gains during 'tax holidays'
significant travel expenses (including 50% of food) are attributed to actively managing income props in different locations that I enjoy visiting several times / yr.
Tools, tractors, dozers are expensed or depreciated against investment activities / property development
work related internet / phones / computers...
Building supplies galore (plenty of extras to build my next place, or donate to Habitat. )
Even my very few 'nightmare' tenants have been of value to me (learning more about law, and learning how to be kind and accepting of people who push your buttons + learning how to bolster my rental agreements. )
It is not for everyone, and not forever for me.
Doing taxes is part of the fun and a very important part of fiscal planning. (I hate Monopoly, but IRS 'games' are more fun and have good payback.) Play within the rules, but know the rules. (well)
We are looking at going back into apartment buildings. This time we will only do college students. I would expect they will generally trash the units, however the leases will be written in a manner that they all leave at the end of each school year. The buildings will be empty 2 months every year. We should not have to deal with many evictions this way. Any bad tenants will only rent from us once.
Great choice. You have two months to fix any broken doors and holes in walls. A good handy man on call can be a big help in that.
Quote:
Originally Posted by Submariner
Really?
What did you encounter that made it into a 'nightmare' ?
My guess is that they couldn't figure out the tax forms to file and do it right. Income rental properties are very easy to deal with as far as taxes go. In fact if you own income property a lot of stuff is able to be written off including some stuff that you can use at both your house and the rental (like a really good vacuum cleaner).
Great choice. You have two months to fix any broken doors and holes in walls. A good handy man on call can be a big help in that.
My guess is that they couldn't figure out the tax forms to file and do it right. Income rental properties are very easy to deal with as far as taxes go. In fact if you own income property a lot of stuff is able to be written off including some stuff that you can use at both your house and the rental (like a really good vacuum cleaner).
We have had extensive experience with Multi-Family-Residences before I retired. The tax forms were a breeze, the tax sheltering was great, and the growth in Net Worth was fantastic.
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