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I currently am selling a 3/2 w/a pool in Broward county.
The mortgage is low around 70k. Considering the market would it be better to rent the home out and get some extra monthly income or sell it for whatever I can get for it by slashing the price well below all others?
I already have a decision made depending on the numbers but i was wondering what others thought.
a couple of other questions.
What is the best way to get a quality renter?
What would you consider an acceptable profit margin to make renting justifiable. (more of a question to investors than the person who has to rent it out.)
Maybe post this on the RE board. Lots of good info & responses there. Well, as much as can be expected for a random public website. But, still, probably get more activity there.
I currently am selling a 3/2 w/a pool in Broward county.
The mortgage is low around 70k. Considering the market would it be better to rent the home out and get some extra monthly income or sell it for whatever I can get for it by slashing the price well below all others?
I already have a decision made depending on the numbers but i was wondering what others thought.
a couple of other questions.
What is the best way to get a quality renter?
What would you consider an acceptable profit margin to make renting justifiable. (more of a question to investors than the person who has to rent it out.)
I you want I can move it to RE or to the Orlando sub-forum. They might be able to provide better advice.
Depends...
You become an investor at that point. The first question you need an answer to is "what is my exit strategy?" You need to plan for the worst and have a way out. What if your renter becomes a squatter and stops paying. It can take as long as 6 months to evict the renter. Can you support the second mortgage if that happens?
You'll also need to budget repainting the entire home, replacing carpet (and hope cleaning works), refinishing scuffed hardwoods, scratched counter tops, broken windows, holes in drywall, bent garage doors, missing/ruined appliances, holes in vinyl, the cost of your time if you do it yourself, landscaping, and other neglect. You may get a good renter but most don't take care of a property. If you aren't worried about that or your home isn't in great condition now, then it's different.
Quality renter? Have a clean, well maintained property and hire a property management company. It will cost you 10% but they'll handle it for you. Oh, and credit scores don't usually lie.
Profit margin? I want at least 10-15% because I know I'll probably need it to fix the place when they leave. The plus is that they paid down my mortgage for me.
If all this sounds ok to you, by all means try your hand as an investor and seek a property manager today!
Depends...
You become an investor at that point. The first question you need an answer to is "what is my exit strategy?" You need to plan for the worst and have a way out. What if your renter becomes a squatter and stops paying. It can take as long as 6 months to evict the renter. Can you support the second mortgage if that happens?
You'll also need to budget repainting the entire home, replacing carpet (and hope cleaning works), refinishing scuffed hardwoods, scratched counter tops, broken windows, holes in drywall, bent garage doors, missing/ruined appliances, holes in vinyl, the cost of your time if you do it yourself, landscaping, and other neglect. You may get a good renter but most don't take care of a property. If you aren't worried about that or your home isn't in great condition now, then it's different.
Quality renter? Have a clean, well maintained property and hire a property management company. It will cost you 10% but they'll handle it for you. Oh, and credit scores don't usually lie.
Profit margin? I want at least 10-15% because I know I'll probably need it to fix the place when they leave. The plus is that they paid down my mortgage for me.
If all this sounds ok to you, by all means try your hand as an investor and seek a property manager today!
Thanks
Can I hire a management company just to do the background check or should I stick with them for everything. Also is it better to rent month to month or get a lease? My guess is a lease would be better to get quality renters, not a guarantee I know, and be more stable but you can remove squaters faster.
Can I hire a management company just to do the background check or should I stick with them for everything. Also is it better to rent month to month or get a lease? My guess is a lease would be better to get quality renters, not a guarantee I know, and be more stable but you can remove squaters faster.
Are you going to be a long-distance landlord?
You can hire the management company to do specifically what you want (i.e. just the background and the lease agreement) but if you are going to be a long-distance landlord you should have someone available to check on the house periodically and to hire the workers when things go wrong. This is why you should have a management company and just put the whole thing under contract.
I have a terrific, experienced property manager I recommend to clients with rental properties. I'd ask for referrals from friends, because in my experience good property managers are not easy to find. Ask people who own rental properties. A good property manager / rental agent, can offer a variety of services depending on what your needs are.
And you'd asked about acceptable profit margin...When you find rental property owners locally and ask for recomendations for property managers, ask what method they use to calculate profit. There are various formulas for this, above and beyond the old "does it cover itself" exercise. One I like is "Cap rate". You can look it up and use it on a few places just as an exercise - then see what the Cap rate on your would be.
Would you buy your property today, given it's present Cap rate?
Hope that helps...
David
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