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Especially with todays society leaning towards not paying rent or other obligations because they're strapped (a sad reality), or in some cases because they "don't feel like they have to".
Or the local city has an eviction moratorium because of the pandemic.
We're doing a rental flip now. Our last tenants were there for 18 years and we had previous tenants before them. If you were to guess that the house was a wreck you'd be right.
We don't want to rent it again. It's being repaired for resale and there's a difference between rehabbing for tenants and resale.
We've made a ton of money on the house and since it never had a mortgage, it's already paid for itself. Why be greedy? I just want to play the rest of my life. Nearly 20 years of solid, uninterrupted income? I doubt I'll ever be that lucky again.
We've made a ton of money on the house and since it never had a mortgage, it's already paid for itself. Why be greedy? I just want to play the rest of my life. Nearly 20 years of solid, uninterrupted income? I doubt I'll ever be that lucky again.
Why would someone buy a house to fix up and sell for a quick buck when they could keep it as a rental and take a slower but steady income, plus any equity capture as any loan principal pays down and values notch up?
The acquisition costs, fix-up costs, closing costs, capital gains tax and risk if anything falls through looks like a short-sighted way to make (in many cases) no more than a General Contractor.
Real wealth is built over time as assets appreciate in value. Rents almost always increase. Real estate is easy to borrow against because of the self-collateralization. How much better does it get? Why would anyone let something so valuable go for a quick hit of cash?
Any thoughts from the flipper crowd?
Because they don't want to deal with being landlords.
Why would someone buy a house to fix up and sell for a quick buck when they could keep it as a rental and take a slower but steady income, plus any equity capture as any loan principal pays down and values notch up?
The acquisition costs, fix-up costs, closing costs, capital gains tax and risk if anything falls through looks like a short-sighted way to make (in many cases) no more than a General Contractor.
Real wealth is built over time as assets appreciate in value. Rents almost always increase. Real estate is easy to borrow against because of the self-collateralization. How much better does it get? Why would anyone let something so valuable go for a quick hit of cash?
Any thoughts from the flipper crowd?
1) It depends on the CAP rate. Some places obviously make sense to hold, some are obvious flips.
2) It depends on whose money is in the flip. If they are borrowing or sponsoring the money, it's not really their choice.
3) It depends on their financial situation. Some people need the income from the flip.
Why would someone buy a house to fix up and sell for a quick buck when they could keep it as a rental and take a slower but steady income, plus any equity capture as any loan principal pays down and values notch up?
The acquisition costs, fix-up costs, closing costs, capital gains tax and risk if anything falls through looks like a short-sighted way to make (in many cases) no more than a General Contractor.
Real wealth is built over time as assets appreciate in value. Rents almost always increase. Real estate is easy to borrow against because of the self-collateralization. How much better does it get? Why would anyone let something so valuable go for a quick hit of cash?
Any thoughts from the flipper crowd?
1. If they know the area well and have the people in place to make the repairs they can often flip a distressed property fast.
2. As was mentioned before dealing with renters/repairs can be a major hassle and there's no guarantee about property appreciation.
Because many tenants are a huge PITA and rentals need someone available 24/7 365 days a year.
Local governments and now federal government are passing laws that are detrimental to landlords.
Some tenants cause their own damage and then sue. It is often an adversarial relationship and many tenants think they are owed big time and have no obligation to take care of themselves or to follow their contract.
Some neighborhoods are teetering on going bad, so it is "get in, get out, take the money and run" before the neighborhood slides into a slum.
Mostly because being a landlord is a lot of work and there is nothing fun about it.
Because many tenants are a huge PITA and rentals need someone available 24/7 365 days a year.
Local governments and now federal government are passing laws that are detrimental to landlords.
Some tenants cause their own damage and then sue. It is often an adversarial relationship and many tenants think they are owed big time and have no obligation to take care of themselves or to follow their contract.
Some neighborhoods are teetering on going bad, so it is "get in, get out, take the money and run" before the neighborhood slides into a slum.
Mostly because being a landlord is a lot of work and there is nothing fun about it.
All of this, really nothing to add.
Thread can be closed now LOL.
We have one rental property of sorts (ADU) and extended family rents it so my experience is very small and limited.
If the family member moved out I'd be very very very reluctant to rent to a non-family member.
I've always heard about the prototypical bad tenant, the usual horror stories. What's disturbing me lately is the horror stories we hear from friends who are also "mom & pop" landlords involve tenants who they knew as friends, or who they knew through reliable sources who lived otherwise very normal and respectable lives.
Because many tenants are a huge PITA and rentals need someone available 24/7 365 days a year.
Local governments and now federal government are passing laws that are detrimental to landlords.
Some tenants cause their own damage and then sue. It is often an adversarial relationship and many tenants think they are owed big time and have no obligation to take care of themselves or to follow their contract.
Some neighborhoods are teetering on going bad, so it is "get in, get out, take the money and run" before the neighborhood slides into a slum.
Mostly because being a landlord is a lot of work and there is nothing fun about it.
So you'll be selling all of yours soon? Sell 'em to ME!
Local real estate show hosts, informercial types promote this all the time. They are right in that it adds diversity to a real estate portfolio. But the past year is a perfect example of what can go wrong along with bad tenants and capital expense, repairs etc. It's responsibility and more work. But is can be steady income sometimes primary or supplemental.
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