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It seems that you are really thinking about this and doing your research, which is good, instead of being one of those people who are forced into renting their properties instead of selling at a huge loss. Those people usually have a very bad time.
Being a landlord is so much more than just getting that sweet rent check at the end of the month. Its a lot of hard work, it can be expensive if you are not careful and most of the times its just a PITA.
I will second the recommendation for the Landlording book. It will give you a good idea of what the job is like.
You also need to factor in vacancy, which can really eat up cash-flow if it's sitting empty for a couple months between tenants. You'll also spend more on repairs than you think, the little things add up and you also have turn costs between tenants. Spend the time and money to thoroughly screen your potential tenants, it's worth every penny. Google "professional tenants" to get an idea of what a bad tenant can do to your business. Also, know the law, document, and be firm with all your rules.
You won't make money on this deal and will probably lose a bit, but if you eventually plan on living there and just looking to cover as much of your mortgage as possible in the meantime, then go for it. You will learn a ton.
Last edited by truckingbronco; 03-26-2013 at 09:22 AM..
Stop trying to talk yourself into something you no is a bad deal
Not really trying to talk myself into something I know is a bad deal, because I do not believe it is one. Sure, if it was a likely loss, that would be one thing, but I think you are implying too much and I'm glad to see different opinions in the forum that are not solely pessimistic.
As I thought I had mentioned, most appliances are new within last 3 years (same with floors, tile, countertops). Have to keep my eye on the heat pump and W/D but am not too concerned of the newer appliances failing.
You also need to factor in vacancy, which can really eat up cash-flow if it's sitting empty for a couple months between tenants.
Quote:
Originally Posted by truckingbronco
You won't make money on this deal and will probably lose a bit, but if you eventually plan on living there and just looking to cover as much of your mortgage as possible in the meantime, then go for it. You will learn a ton.
Agree on the vacancy being a potential issue, though again, can't imagine most LLs spend over $1K every year on repairs/maintenance (unless it is a large/old house). So, there is risk for major appliances failing, to have a bad renter, and normal maintenance exceeding what I've experienced in the past 3 years. I just don't know if it is reasonable to expect, given the costs, that this property will lose money every year.
Appreciate the advice, though, good considerations.
Not really trying to talk myself into something I know is a bad deal, because I do not believe it is one. Sure, if it was a likely loss, that would be one thing, but I think you are implying too much and I'm glad to see different opinions in the forum that are not solely pessimistic.
As I thought I had mentioned, most appliances are new within last 3 years (same with floors, tile, countertops). Have to keep my eye on the heat pump and W/D but am not too concerned of the newer appliances failing.
I personally own close to 100 units not implying anything you will lose money. If that’s your business plan that nothing will ever go wrong then go for it. Good luck with what ever you decide but in the last 3-4 years I have bought 4-5 houses a year from failed landlords. Look at all the posts in this thread I did not see anyone tell you it will make money.
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disagree
