AWW$HEEET Posted October 8, 2010 Report Share Posted October 8, 2010 Is rental property a worthy investment, yes or no? And by property, I mean residential, not commercial. Please only respond if you have experience or have relatives w experience. I also want to know if there are management companies that take care of all the bitch work, aka finding tenants, fixing shit when it breaks, dealing with evictions, etc and there is a clearing acct between you and the management company where $ is exchanged, or how does that work? Thanks in advance. Quote Link to comment Share on other sites More sharing options...
Nitrousbird Posted October 8, 2010 Report Share Posted October 8, 2010 I am one. It is not worth it. It may be if you own a multiple dwelling unit, or are making a good sum of money over the mortgage/taxes/insurance. Otherwise, it is a big loss of money and bigger head ache. Quote Link to comment Share on other sites More sharing options...
AWW$HEEET Posted October 8, 2010 Author Report Share Posted October 8, 2010 what did/do you find to be your biggest challenges? Quote Link to comment Share on other sites More sharing options...
smokin5s Posted October 8, 2010 Report Share Posted October 8, 2010 my inlaws have rental properties... it's a HUGE headache, they always destroy the property, you have to fight them for rent, etc.... it's just not worth the headache. Quote Link to comment Share on other sites More sharing options...
Mojoe Posted October 8, 2010 Report Share Posted October 8, 2010 Mortgaging non owner occupied properties have higher rates and are a hassle to appraise for the loan. In 8 years of Real Estate, I have not seen a reanal property worth while. Quote Link to comment Share on other sites More sharing options...
AWW$HEEET Posted October 8, 2010 Author Report Share Posted October 8, 2010 Mortgaging non owner occupied properties have higher rates and are a hassle to appraise for the loan. In 8 years of Real Estate, I have not seen a reanal property worth while. would be purchasing as a primary residence then eventually renting it out. Quote Link to comment Share on other sites More sharing options...
Miller Posted October 8, 2010 Report Share Posted October 8, 2010 Let me know if you need help on the taxes, if you decide to make the mistake of doing this I mean. Quote Link to comment Share on other sites More sharing options...
TurboNova Posted October 8, 2010 Report Share Posted October 8, 2010 yeah also if you buy in a more urban area where if the house sits vacant for more than a minute and someone breaks in for something as little as some copper wiring/piping/furnace or ac unit. see it ALL of the time Quote Link to comment Share on other sites More sharing options...
Supplicium Posted October 8, 2010 Report Share Posted October 8, 2010 would be purchasing as a primary residence then eventually renting it out. thats what I have been doing to get FHA loans so I only have to put 3-5% down on properties. I have an llc but you have to put down 25% to get a loan in an llc as an investment (to my understanding). I can transfer the properties into the llc after 2-3 years. I look at rentals as a long term investment. It takes up alot of time and cash but I feel in 15 years ill be in alot better position. I only invest in 2-6 unit properties at the moment and they are all outside of Ohio. Quote Link to comment Share on other sites More sharing options...
AWW$HEEET Posted October 8, 2010 Author Report Share Posted October 8, 2010 thats what I have been doing to get FHA loans so I only have to put 3-5% down on properties. I have an llc but you have to put down 25% to get a loan in an llc as an investment (to my understanding). I can transfer the properties into the llc after 2-3 years. I look at rentals as a long term investment. It takes up alot of time and cash but I feel in 15 years ill be in alot better position. I only invest in 2-6 unit properties at the moment and they are all outside of Ohio. Interesting. Do you have someone managing them? Quote Link to comment Share on other sites More sharing options...
Sam1647545489 Posted October 8, 2010 Report Share Posted October 8, 2010 I have one rental. I rented to some friends who I know very well and will not destroy the house. I think that is the #1 problem people have. People do not care about others property. Although I do take care of the grass and yard and outside maintenance, they take care of everything inside. They are only paying me what my mortgage is right now since I cut them a break. But I only have 5 yrs left on the mortgage till I own it outright so I dont mind. I figure its better then leaving it sit empty and having to pay 2 mortgages. I think if you do enough screening on potential tenants then you wont have to big of an issue with rental properties. Quote Link to comment Share on other sites More sharing options...
AWW$HEEET Posted October 8, 2010 Author Report Share Posted October 8, 2010 I have one rental. I rented to some friends who I know very well and will not destroy the house. I think that is the #1 problem people have. People do not care about others property. Although I do take care of the grass and yard and outside maintenance, they take care of everything inside. They are only paying me what my mortgage is right now since I cut them a break. But I only have 5 yrs left on the mortgage till I own it outright so I dont mind. I figure its better then leaving it sit empty and having to pay 2 mortgages. I think if you do enough screening on potential tenants then you wont have to big of an issue with rental properties. thats probably how I will have to do it. rent to someone who i know will respect my shit and pay on time. im not looking for positive income either, just build equity. Quote Link to comment Share on other sites More sharing options...
Nitrousbird Posted October 8, 2010 Report Share Posted October 8, 2010 Things to think of: - Just because you think you know someone, doesn't mean they will take care of the joint. Been there, done that. - There will be periods of time it is vacant, between tenants. Have to have money to float the mortgage during those times. - Could get a non-payer. Evictions take a long time. Again, you get to float that mortgage. Those folks who decide to stop paying usually decide to stop taking care of (or start tearing up) the place. There goes money for repairs. - Upkeep cash. Things in a house break. Things in a rental break more often. - Want a property management company? There goes some more cash. Want them to handle checking on repairs and caring for them...there goes a LOT more cash. - Tenant decides to skip out on some last bills when they leave (say, the water bill). Ahhh, more cash. Renting blows. At this point, once the lease on my rental is up, I'll take the loss on the property and sell it. I'm done with this BS. Quote Link to comment Share on other sites More sharing options...
Radio Flyer1647545514 Posted October 8, 2010 Report Share Posted October 8, 2010 It's going to depend more on who the tenants are and how reliable they are to keep the place in good shape and pay the rent on time. More than not, it's going to be more hassle than it's worth unless you have tenants picked out that you trust to keep the place clean and not destroy it. Quote Link to comment Share on other sites More sharing options...
AWW$HEEET Posted October 8, 2010 Author Report Share Posted October 8, 2010 for the reasons nitrousbird has listed, id probably ask for a large deposit. if the stakes are high for me, they're going to be high for both of us. Quote Link to comment Share on other sites More sharing options...
Nitrousbird Posted October 8, 2010 Report Share Posted October 8, 2010 for the reasons nitrousbird has listed, id probably ask for a large deposit. if the stakes are high for me, they're going to be high for both of us. And there is your other problem. The majority of people rent because they aren't in the position to buy. Meaning they are likely not going to have a ton of money laying around to put down as a deposit. I'd say most people aren't willing to put more than a months worth of rent down as a deposit. Quote Link to comment Share on other sites More sharing options...
zeitgeist57 Posted October 8, 2010 Report Share Posted October 8, 2010 There is a lot of great, accurate information in this thread. I have 4 rental/vacation properties, 2 locally here in Columbus. All of the properties should be at LEAST 80%LTV or lower...meaning as much cash down as possible. In retrospect, the only way it makes ANY sense is if you buy it as a primary residence, live in it for 5-7 years, do a little maintenance to keep it up (nothing fancy), and then turn it into a rental when you have the money to buy another home. As an investment I don't think rental properties make as much sense as they did a few years ago. Why? The appreciation no longer exists in Columbus, and maintenance is a bitch. I have a great property management company I've used for the past 7 years, charges me only 6% a month, has great, cheap maintenance guys, and only notifies me of charges over $250 (meaning I stay hands-off). I now have 7-12% guaranteed interest rate investments that make more sense than real estate as an investment if I had $20k to spend... Quote Link to comment Share on other sites More sharing options...
AWW$HEEET Posted October 8, 2010 Author Report Share Posted October 8, 2010 i wanna know where you are getting a guaranteed 7-12%. Im sitting on more or less 30% unrealized gains on my portfolio this year but guaranteed 7-12% set it and forget it would be nice. Quote Link to comment Share on other sites More sharing options...
zeitgeist57 Posted October 10, 2010 Report Share Posted October 10, 2010 20-year Morgan Stanley callable note. 7% per year for first 4 years 8% yrs 5-8 9% yrs 9-12 10% yrs 13-16 12% yrs 17-20 Callable quarterly after 10/30/11. Monthly payout. A2-rated (investment-grade paper). Quote Link to comment Share on other sites More sharing options...
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