Welcome to City-Data.com Forum!
U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > U.S. Forums > Connecticut
 [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 05-31-2011, 06:37 AM
 
3 posts, read 7,910 times
Reputation: 10

Advertisements

Does anyone here have any insight into the state of the rental real estate industry in central CT, from the real estate owner's position?

Specifically, I'm interested in the towns of Newington and Glastonbury. Several condo properties are available in each town in the $100 - 150K range in some of the popular condominium/rental areas. I'm wondering about the downsides and upsides of purchasing such a property in the two towns mentioned above and renting them out in the neighborhood of $800-1000 for rent. The new condominium complexes around the Berlin Turnpike seem to be doing well (Glen Oaks, etc), and Glastonbury (Georgetown Village, etc) has always attracted young professionals who work in the Hartford area but wish to commute from outside of the city. I have lived in Marlborough, CT for the past twenty years and have seen a large population growth and corresponding increase in traffic around the Berlin Turnpike in the past ten years. Glastonbury has continued to grow as well.

It's easy to see the upsides to such a proposal, but I'd like to hear from anyone who has attempted or considered such an undertaking and had actual success or failure. This would be my first time undertaking such a responsibility. I do have the ability to cover a 15-20% down payment, and have at least a year's worth of payments as cash in the bank, if finding a tenant proved difficult. If it helps, I have carpentry, electrical, and mechanical skills and am not afraid of undertaking repairs, etc. What I am concerned about is finding and dealing with tenants, and hearing about people in a similar position's stories in taking on a similar investment.

Thanks in advance for any help,
Jay
Reply With Quote Quick reply to this message

 
Old 05-31-2011, 09:27 AM
 
2,855 posts, read 10,398,301 times
Reputation: 1689
Boy we sure have a lot of guys named Jay on this board

Anyhow, I just wanted to make sure you ask before buying a condo if the association has any rules against renting the units out. As I have come across 2 different condo complexes in the past that do not allow renting within them. Just something to keep your eye out for. Good Luck!
Reply With Quote Quick reply to this message
 
Old 05-31-2011, 10:32 AM
 
35 posts, read 878,266 times
Reputation: 73
Myself is also a new landlord. We just rented our house in Plainville, good location (on farmington townline) and the house is in a good shape. I can't give you a lot of advice since I'm new but we found it quite easy to find a tenant at this time. We posted ads on craigslist on a Saturday, and got 30 inquiries in 2-3 days, and by the end of Sunday, we already interviewed 8 couples. I don't know if we just got lucky but it does look like the rental market is pretty strong in demand, I guess more people are renting now that the bank has made it so hard to get a loan.. However it is not easy to find the right tenant, you really have to be patient and firm about what you are looking for. Good credit, financially stable, strong reference, small family with no dogs were our main criterias. We are happy we stick to our terms, it took a while for us to pick the final tenant from the a list of candidates, but it is worth the research and effort. Also don't forget to ask for tenant insurance.
Reply With Quote Quick reply to this message
 
Old 05-31-2011, 11:50 AM
 
490 posts, read 1,783,363 times
Reputation: 262
Quote:
Originally Posted by sannysw View Post
Myself is also a new landlord. We just rented our house in Plainville, good location (on farmington townline) and the house is in a good shape. I can't give you a lot of advice since I'm new but we found it quite easy to find a tenant at this time. We posted ads on craigslist on a Saturday, and got 30 inquiries in 2-3 days, and by the end of Sunday, we already interviewed 8 couples. I don't know if we just got lucky but it does look like the rental market is pretty strong in demand, I guess more people are renting now that the bank has made it so hard to get a loan.. However it is not easy to find the right tenant, you really have to be patient and firm about what you are looking for. Good credit, financially stable, strong reference, small family with no dogs were our main criterias. We are happy we stick to our terms, it took a while for us to pick the final tenant from the a list of candidates, but it is worth the research and effort. Also don't forget to ask for tenant insurance.
Excellent advise. I have learned a lot as I am trying to become a landlord myself. Working with a RE agent as it is my first time. This agent has tried to push people with bad credit on me and I have had to be very strong. I am about to fire this person too and re-list with somone else.

On my own point of view, I've tried to stay away of "roomies" situations. Young people that never had a place, in my opinion, may run down my place in just a year. And since they have no family ties, they'll be prone to move out quicker.

I recently read an article online that says this last housing meltdown has given birth to a new generation of renters. I do see a lot of interest in the rental market right now, is just a matter of finding the right tenant.

I am glad I found this post.
Reply With Quote Quick reply to this message
 
Old 05-31-2011, 01:29 PM
 
Location: Connecticut
34,727 posts, read 56,531,322 times
Reputation: 11163
There are many reasons why more people do not own rental properties. First there is the ever present fact that the tenant may not send the rent check on time to pay your mortgage and common charges. If they do not pay the rent al all, it is not easy and will take a couple of months to kick them out especially in the winter. They may walk out on the rental agreement at a bad time (like over the holidays when no one is looking to move) so you may not have a rent coming in for a couple of months. Usually every time a tenant moves out you will have to repaint and have the carpets cleaned or replaced. That gets very expensive. The tenant may damage the property which could cost you more than the security deposit to repair. Common charges on condos can be very expensive as can special assessments when something big has to be done like replacing roofs or repaving parking areas. There are always repairs needed like broken fixtures, aging hot water and heating systems and broken appliances. When all is said and done, you do not really make a lot of money with a rental unit. Jay
Reply With Quote Quick reply to this message
 
Old 05-31-2011, 01:39 PM
 
Location: West End-Hartford
625 posts, read 2,043,541 times
Reputation: 377
Based on some of the comments above, you really need to be careful that you are not unlawfully discriminating against potential renters when people apply to rent your place. You can't descriminate against people based on age, familial status, etc. This website has some good information for landlords and tenants... Connecticut Law About Landlord/Tenant Law

Regarding purchasing a condo to rent, make sure you take a close look at the financial situation of the complex. Any special assessments that are levied can really eat into any monthly profit that you make, as you typically can't adjust the rent as much as the special assessment levied. Tenants don't care that your condo association feels the buildings need all new roofs...
Reply With Quote Quick reply to this message
 
Old 05-31-2011, 01:41 PM
 
Location: Milford, CT
327 posts, read 1,116,087 times
Reputation: 214
I will add on to what Jay states above.

Don't do condos and try to stay away from 5 or more units. I find that the 3-4 unit places are ideal. But many factors still go into ensuring you still come ahead. Best to look for a place which hasn't been managed well and you could easily go in with minor remodeling and get increased rents with proper leasing. 90% of the multi's I come across the owner is asking too much when you factor mortgage and insurance. The problem I find is finding a multi-family that makes you money on day 1.
Reply With Quote Quick reply to this message
 
Old 05-31-2011, 01:47 PM
 
Location: Milford, CT
327 posts, read 1,116,087 times
Reputation: 214
Some of the metrics I use and you should look into are Anticipated Gross Rent Multiplier, Cash Flow After Taxes, ROI year one. Maybe some others here can add to what they utilize to analyze properties.
Reply With Quote Quick reply to this message
 
Old 06-01-2011, 06:06 AM
 
3 posts, read 7,910 times
Reputation: 10
Thank you for the responses thus far everyone. Your comments have given me a lot to think about.

Quote:
Originally Posted by JayCT View Post
When all is said and done, you do not really make a lot of money with a rental unit. Jay
While I can certainly appreciate why this can be true for all the reasons you had stated, the property owner is still earning equity even when only breaking even on costs, correct? While not liquid, this would still allow him/her to use equity extraction via loans to further expand a portfolio or make investments elsewhere. It would be great to keep a positive cash from the rental property right off the bat, but I would think earning equity alone as still a positive outcome.

Quote:
Originally Posted by AmyBergquist
Based on some of the comments above, you really need to be careful that you are not unlawfully discriminating against potential renters when people apply to rent your place. You can't descriminate against people based on age, familial status, etc. This website has some good information for landlords and tenants.
Thank you for that link, I will have to study it closely. I have to say I was not aware that there were strict laws against discrimination against potential renters. I have quite a bit to learn. I would imagine that proper documentation of all prospective renters interviewed, their positives and negatives, and why you chose to or not to offer them the rental would be key here, similar to what HR makes most businesses do. This way, you would have a defense ready if a lawsuit was raised.

Quote:
Originally Posted by S2000
Don't do condos and try to stay away from 5 or more units. I find that the 3-4 unit places are ideal.
Why specifically are condos a bad idea? Condo fees that cut into profits? Not having complete control over the property? It sounds like you are recommending something like a standalone duplex instead. Is this due to the fact that it consolidates your tenants to one building on one property? I can see where this would be beneficial.

A huge thanks for the metrics you provided - I would welcome anyone else with similar metrics to chime in.
Reply With Quote Quick reply to this message
 
Old 06-02-2011, 12:46 AM
 
Location: West Hartford, CT
103 posts, read 426,870 times
Reputation: 93
I think investors tend to shy away from condos for a few reasons - no control over value, association management, and volatility.

When you buy a condo, you're buying a share of a community. More so than in a single family or multi-family home. In valuing individual condo units, a realtor or appraiser will use comps in that complex before any others. So if the last 2-3 sales were owners in distress, your property is automatically worth less, even if your unit is in better condition.

The real estate market in general works likes this but there is so many more variables that you can change with a single family or multi-family that can improve the value. I think the major reason investors prefer single family or multi-families is the control you have over rents and overall value. And in valuing the property, an appraiser or realtor isn't only using your immediate neighbor but similar type properties nearby.

Then there is the dread association management - deferred maintenance, poor management, dealing with unanticipated assessments. All outside your control. All of this also affects property values.

Most investors I know stay away from condos unless they can pick one up way below market in a stable complex that needs TLC.

I'll agree with S200 about 3-4 unit multis. 2 families in nice areas attract mostly owner occupied and therefore tend to be way overpriced, in my opinion. 3-4 units are better priced per unit but you aren't going to find them in areas like Newington or Glastonbury. Bristol, New Britain, Middletown, Hartford, etc are where these properties are available. I agree that good ones can be hard to find - expect to look for many months, kissing a lot of frogs along the way to your prince. The numbers don't work in so many - after your mortgage, insurance, taxes, routine maintenance, vacancy reserves, and reserves for major repairs, you are left with very little cash flow, if any.

As far as being a landlord goes, there are a lot of things you need to be aware of like discrimination, how to handle credit checks, applicability of lead laws, your responsibility when things go wrong, etc.

I suggest you start reading up on a site called Bigger Pockets. They have a forum with experienced investors and landlords.
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 > U.S. Forums > Connecticut
Similar Threads

All times are GMT -6.

© 2005-2024, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - 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, 36, 37 - Top