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I'm in Phila. It's a tenant friendly city. I was thinking of maybe looking for a duplex in a close-in suburb. I actually have been online today....looking. I've also looked at he possibility of a row house.
1) I would not be doing any work on the property myself, I'd have to hire out for all of it.
Ideally I'd want something with as little maintenance as possible.
If I get a suburban SFH that means the grass would have to be cut. A duplex, the right duplex, would have no yard to maintain. Because I'd never trust a tenant to cut the grass that would be an additional expense. I could hire a property manager. But then you have to keep an eye on them too.
While looking online I have to admit, most of what I thought while looking at property photo galleries was...and if the window breaks that's a few hundred....and if the toilet gets stopped up the floor could be damaged...there goes another few hundred. IF it needs a roof there's a few thousand. I'd need to keep 50K in a maintenance fund. Which of course I could do. But I just tend to see all the responsibility that goes with rental property ownership.
Of course, that's only one side of the situation. But it's the side that has me hesitant.
I'm 40 y.o, making $75K a year in California, no debts. Looking at my colleagues being laid off left and right, I know I could only hold on to my job up to six months. Even there was no COVID-19, my chance to find another job similar to my current one is very low, let's say less than 5%. Now with the pandemic, the chance is close to zero. There's no career ladder for my particular job. It's either I'm hired or no job. So to save my young family with three toddlers and long time unemployed wife, I plan to use the saved money as down payment to buy a $400K-$450K house for rent (our current house is paid off).
Here's the kicker: after more than 20 years of hard working, I know my limits: I'm not cut out to be a landlord because of my naturally high anxiety personality. I happen to be my brother's representative in dealing with his management company and tenants for a few months and I've lost sleep for each repair. Mind you, I even lose sleep if I know I have to wake up early at 4:30am on selected days I travel to work. I've tried everything: meditation, exercise, self-help books. Read, understand and practice but I'm not stronger mentally. I know my life would be miserable if I continue being a landlord for a long time. I don't know anything about stock investment, especially in this tough time.
Any input regarding what I should do is appreciated.
This is JIMHO, but you should not. Not in this economy and not with the fact that your company is conducting layoffs with great frequency. This is not the time to be thinking about getting into the rental space in my opinion.
Location: Formerly Pleasanton Ca, now in Marietta Ga
10,351 posts, read 8,569,440 times
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Quote:
Originally Posted by sxmfan2018
if you don't toughen your soft personality then renters will walk all over you. when you buy a rental property you just got another full time job!!! iv'e always used a property MGR works out well. and if you run them your self do you really wanna hear the phone going off at 3 am. tenant be saying i put my mom down the garbage disposal and now it's plugged up my toilets backed up. then you have the ones that destroy the place and expect there deposit back need i say more.. even if there's no rent coming in you best have money stashed to fix things and keep the place going
Why does everyone always bring the late night phone call about a backed up toilet?
Dealt with many rentals for over 30 years and that has never happened.
don't buy any rental housing you can't receive rental income of 1% of it's value per month.
i.e., $400K home must rent for $4K a month.
unfortunately literally impossible in my area. Virtually all of the standard rule of thumbs aren't possible. I kinda envy a lot of you guys that are able to purchase property at $50k, then rent at $1100. Around here right now, you'd probably have to buy a $250k property to rent at $1100.
Why does everyone always bring the late night phone call about a backed up toilet?
Dealt with many rentals for over 30 years and that has never happened.
Would you rather buy:
-- TWO cheap houses in a not so great area? (for cash)
-- one duplex/triplex is a so-so area? (for more cash)
-- OR ONE house is a better area?
(duplex/triplex is a better are would be out of my price range, if I didn't want a higher mortgage)
We have owned a couple of Triplexes. It has been our experience that they market for less than a SingleFamilyResidence would market for in the same neighborhood.
Location: Formerly Pleasanton Ca, now in Marietta Ga
10,351 posts, read 8,569,440 times
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Quote:
Originally Posted by sxmfan2018
been there LOL
First, why do you give tenants access to calling you at that hour? A plumber is not going to come at 2 am so why let them contact you on an issue that can wait until the morning?
Second, you’re not liable since they caused the backup in the toilet, not you unless you kept the rental in poor condition to start with. Do you not have a clause that puts the burden on the tenant after they have been there renting for a certain period and the toilet has been ok?
Unless you have tree roots growing in the line, it should be fine.
Location: Formerly Pleasanton Ca, now in Marietta Ga
10,351 posts, read 8,569,440 times
Reputation: 16698
Quote:
Originally Posted by rya96797
unfortunately literally impossible in my area. Virtually all of the standard rule of thumbs aren't possible. I kinda envy a lot of you guys that are able to purchase property at $50k, then rent at $1100. Around here right now, you'd probably have to buy a $250k property to rent at $1100.
Back in my part of California that 250k is your down payment. You can’t buy anything for that cheap.
The 1% rule isn't easy to get, but it's absolutely what you should shoot for. You're unlikely to find these on Zillow or MLS listings. A lot of real estate investors will target an area and do mail out flyers and skip the real estate agents, say houses sell for $275k in that area but rent for $2,000... it's absolutely possible to find a house for $200k if someone is motivated to sell, it's as-is, and needs a little work.
As the old saying goes, you make your money when you buy.
Why does everyone always bring the late night phone call about a backed up toilet?
Dealt with many rentals for over 30 years and that has never happened.
i will put it this way. being a landlord is like being a pregnant female... every one wants to tell you there horror stories.
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.. even if there's no rent coming in you best have money stashed to fix things and keep the place going
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