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I would like to get an opinion from the investors out there.
So I own a 6 year old condo free and clear in SoCal. Just bought it for $530k cash. I am renting it out for $3,200/month. HOA is $230/month. Taxes, not sure yet, I guess around $6k/year.
I myself just rent a little room and have a job that doesn't bring in a lot. But I am able to put all of the rental income into savings. I have no debt, no credit card payments, no car payment, nothing. An emergency fund I do not want to touch.
Would it make sense for me to take out $150k of my equity and buy several little units somewhere in a cheaper state? A friend of a friend said something about having bought units for $30k each and minus taxes, property manager, etc. her return is $600/month.
Which means if I get 5 similar units, I would get $3,000/month. Or even if I spend $50k on each unit, I should get something around $3k, no? Does that make sense, aka does the bank lend money like that?
My income is not big enough to get a loan easily but with the condo I should have leverage.
I'm not a fan of long-distance rentals, so my general recommendation is to invest in properties which are close to your home so that you can keep an eye on them. If you rely on property management firms to handle your rental properties, that eats into your potential profits, although it can work out for some.
I'd be wary of a neighborhood where you can buy a house for $30,000. The lower the rent, the lower the reliability of those you might rent to (to try to put it nicely). Most lenders will focus on your income, not your assets, however your rental income should count, but it may need to be seasoned.
I'm not a fan of long-distance rentals, so my general recommendation is to invest in properties which are close to your home so that you can keep an eye on them. If you rely on property management firms to handle your rental properties, that eats into your potential profits, although it can work out for some.
I'd be wary of a neighborhood where you can buy a house for $30,000. The lower the rent, the lower the reliability of those you might rent to (to try to put it nicely). Most lenders will focus on your income, not your assets, however your rental income should count, but it may need to be seasoned.
I live in CA, there is nothing nearby under $500k. I am a very hands on landlord, so paying a property manager is not my ideal situation but if I want to invest out of state, I do not have any friend anywhere who could help me with rentals.
I did not really start looking yet but apparently there are areas in states where you can get a decent apartment for $30k-$50k, not just in horrible areas. I have not gotten in contact yet with the friends friends who apparently has no issues with her rentals.
With having so many Californias move out to neighboring states, the prices went up there a lot. I looked in Vegas and AZ, prices almost doubled. Not a good time to buy. So I would have to go pretty far like Alabama or Mississippi, I guess.
Curious as to why you just didn't invest the $530k?
I am very safety driven. I am scared of stocks, and crypto and all that other stuff, I only believe in real estate as in investments.
I did not come that far because of my income. I never earned much.
I bought a dump in 2010 for $270k, rented out rooms while I lived in it and turned it into something desirable and sold it last year for $505k. So for me, that is very special and precious and I am too scared to risk it. Real estate feels safe for me.
I am very safety driven. I am scared of stocks, and crypto and all that other stuff, I only believe in real estate as in investments.
I did not come that far because of my income. I never earned much.
I bought a dump in 2010 for $270k, rented out rooms while I lived in it and turned it into something desirable and sold it last year for $505k. So for me, that is very special and precious and I am too scared to risk it. Real estate feels safe for me.
You bought when the country was still recovering from the crash of 2008. You should ask your condo neighbors who bought in 2007 if they also feel there is no risk in Real Estate? So, where are you "saving" the 3k you are receiving every month? Bank account with no return?
You should talk to a financial advisor about the benefits of diversification. Having all of your assert tied up in one sector is very risky. After the hurricane season we're having this year, Mississippi doesn't seem like such a great place to buy property. And with the nationwide run-up in real estate values over the past several years it will be challenging to find any bargains in general.
You bought when the country was still recovering from the crash of 2008. You should ask your condo neighbors who bought in 2007 if they also feel there is no risk in Real Estate? So, where are you "saving" the 3k you are receiving every month? Bank account with no return?
I am not sure why you are trying to be snarky.
I just bought the condo in May. I sold my old house and my truck and downsized a lot last year to be able to buy here in Socal.
So right now I am putting everything I get back in low return CDs and in my emergency fund to stay liquid for now until I know what the future holds. If I buy again or if I move away and just buy for me or if I keep renting rooms for myself and buy a car .... I am considering options and play them out in my head.
You should talk to a financial advisor about the benefits of diversification. Having all of your assert tied up in one sector is very risky. After the hurricane season we're having this year, Mississippi doesn't seem like such a great place to buy property. And with the nationwide run-up in real estate values over the past several years it will be challenging to find any bargains in general.
I have been burned with other investments. And I have not researched yet what area is good with low taxes, less chance of natural disaster, weather, general price fluctuation.
But you are probably right, I should get more informed once I reach the point where I have enough money for a long term investment. I will probably need a year until I fully recovered from my condo purchase. Who knows where real estate prices are then and my personal situation.
I just bought the condo in May. I sold my old house and my truck and downsized a lot last year to be able to buy here in Socal.
So right now I am putting everything I get back in low return CDs and in my emergency fund to stay liquid for now until I know what the future holds. If I buy again or if I move away and just buy for me or if I keep renting rooms for myself and buy a car .... I am considering options and play them out in my head.
Not trying to be snarky; just pointing out that Real Estate can be just as volatile as other investments.
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