Educated opinions....

[TacomaJD]

Solution = cheap hardwood/linoleum floors and no pet policy. A friend of mine rented the house beside mine for a period of time ending last year. I went in it for the first time while he was living there and to my amazement, it has remained just as nice inside as my house is, and I believe he was the 6th party through it in the roughly 6 years that I had lived there (at that time), and that house is a few years older than mine.

A wise landlord once told me to not have any sort of sentiment toward a specific house/property if you are going to rent it out. For instance, I am very OCD about **** and like to keep my **** nice. It would definitely bother me to some extent to see my current house not kept up as I would keep it up if someone were renting it. But I will understand that going in and treat it solely as a business utensil, should I decide to rent it.

I was over at Monte's one time, who lives in a pretty nice sub division in Rainsville and he pointed at a lot a few over from his, which held a nice red brick house roughly 2k+ sq ft, only a few years old and said it rents out for $900 a month. I figure it was roughly $150k-ish house/land, I was just amazed that something like that rents out for that. Now at that point, I have trouble justifying someone renting vs. buying, unless they are temporarily relocated for work or something of the sort, and that does happen often too.

 

[grcthird]

Thinking about renting my house when we move/build, the one across the street has been a rental since before I moved in over a decade ago, same people.

 

[ibrokeit]

Other than my real job, for the past 4.5 years, I've been managing 11 rental houses in Auburn/Opelika ($6,450 per month). i scanned over Josh's jibber jabber I promise, it's not even close to as easy/simple as he is making it out to be. "Write in the contract no smoking inside." LOL. Good luck with stuff like that.

 

[TacomaJD]

I never said it was easy there, El Professionale..... Who owns these homes that you manage? He/she is obviously doing well off of them if they can afford to pay you to manage them.

Mostly what I've said is to cover all your bases the best you can and you can avoid a lot. One friend I have talked to a lot about this stuff is a defense attorney and has a few rental properties. I think it's safe to say he would be a reliable source of information on the matter. Regardless of what's said in this thread, from the people I've had serious conversations with about rental properties, I'm confident in what I've learned from them. Not one has said, "oh **** no, don't rent your **** out, that's a bad idea....." :

Sure you run into problems, hell I run into problems at work. It's how you deal with the problems that makes all the difference.

 

[johneddie]

Rental market around here is pretty strong. Just worked in a house a couple days ago that will be a rental (new construction), $1000 a month for a 3 bed/2 bath. Nothing fancy but nice, probably about 1600+ sq ft. Builder has several of these he rents. Does background checks on everyone, the lady renting this one is in her 80s. He goes in once a month to "change the return air filters". Granted he does a lot of the construction himself which cuts down on the investment. Duplexes around our area can rent from $500- 1000 per month, depending on location and how nice it is. Like Josh mentioned, rental costs can cull a lot of the riff raff out of the picture...basing this on several of the contractors that we do work for. I realize that I can't just hold my pockets open and money will fall into them....if only it was that easy we'd all be rich!

 

[TacomaJD]

Re:

Last sentence wraps it up. It's clearly not easy, but you have to have a solid gameplan in order to be profitable and continue forward. There are lots of folks that make a good living or side living doing it, who are no better or more intelligent than you and I or the next guy. Anyone can do it if they are willing to learn the ropes, invests wisely, and puts in the work. And I want to do it!

 

[5BrothersFabrication]

...and the willingness / ability to be an asshole when it's called for. The house across the street from me was bought by a nice couple for $128k. They graduated from college, he got a job in Ohio, so they decided to rent instead of sell. They did a thorough background check on a lady and her boyfriend before renting the house to them. A month later, there's a different car in the driveway for 5 minutes a pop, 20 times a night. Obvious what is going on there. We called the cops, they "started an investigation" (in Knox County that means NOTHING). We called the owner, they're too scared to do anything. Eventually, they broke up, he moved out, a couple weeks later she moved out. After that, the owners came back to Tn to check the house out, there was dog **** and piss ALL OVER one bedroom, a bullet hole in the living room through to the kitchen, the house had been broken into via garage door and n***** rigged to fix it, and the walls were tan from smoke.

You gotta be able to be an asshole when you need to.

 

[TacomaJD]

Re: Re: Educated opinions....

Other than my real job, for the past 4.5 years, I've been managing 11 rental houses in Auburn/Opelika ($6,450 per month). i scanned over Josh's jibber jabber I promise, it's not even close to as easy/simple as he is making it out to be. "Write in the contract no smoking inside." LOL. Good luck with stuff like that.

I still want to know who owns these properties and hired you to manage them. $6,500 a month = roughly $5-600 a month per property. I'm not really sure why notating those figures were even necessary. You are always too quick to promote negativity, but rarely contribute anything positive.

 

[pholmann]

My wife's uncle owns 35-45 rental houses. The main thing I've noticed in the last 15 years of us being together and watching him is that he gives zero ****s about any of these properties. He does the least amount he has to do to them to keep them up to standards for the government to give him a guaranteed rent check on each for low income housing. Not saying he could care less whether or not he owns them but he has no sentimental attachment to any of them. I know he cares about whether or not he owns them since his best friend stole 4 houses from him. He fought like hell to try to get them back but he just couldn't get them back from the finance companies his ex buddy lost em all to. One was a 350k$ house.

 

[ibrokeit]

I still want to know who owns these properties and hired you to manage them. $6,500 a month = roughly $5-600 a month per property. I'm not really sure why notating those figures were even necessary. You are always too quick to promote negativity, but rarely contribute anything positive.

You don't know him so why does it matter who? Name is Bret. Use to own a big plant in auburn. Retired and moved to Naples.

Not trying to be negative. One day, I hope to have some rental properties. But it just sounded like you had this fairy tale plan in your mind. It's way tougher than it seems.

 

[TacomaJD]

Bump.

Upon research I am trying to learn the advantages and disadvantages of renting properties that are owed for and paid for. At first glance, one would think that renting out paid off properties would be ideal based on the principle of all revenue being generated as profit less expenses like insurance and maintenance costs. But I have done some reading and it seems a lot of folks in this business are not worried about paying off their rental properties as early as possible, but moreso letting the debt remain as long as they are generating a profit or at least breaking even on said properties and then acquiring MORE properties. One of their reasons being the use of their property debt as leverage for lower taxes. If I am understanding this correctly, homesteaded properties receive tax breaks that income properties do not, thus making land taxes on income properties as much as 300% more than what it would be if homesteaded, AND if the income properties become paid for, they are then susceptible to higher taxes (can't remember if it was income or just land taxes, or both?). THEN, there is the tax deduction for the collective mortgage interest paid annually on all properties owned.


The reason I am debating this is because I may try and get into this sooner than I thought. Originally I planned to pay my current small 10 year old house off in 5-7 years, somewhere in that timeframe possibly put a ring on it, once married with dual income, build or buy a bigger house while conveniently living in my current house until able to move into new house, then rent my small house out after being paid off and letting that revenue pay for a 2nd rental home, and so on. BUT now I'm thinking I may not need to be in such a hurry to sacrifice all the spare money I can to pay off my current house and just let the mortgage ride, but instead build a side fund to cover start-out rental expenses, then move on into a new house in a few years and rent my old house out while renters cover the mortgage payment and leave just enough profits to set aside for property expenses, essentially just letting them pay the house off for me. And then progressively acquiring more properties as mentioned before.

Does anyone have anything to add to this to clarify if I understand this correctly? Judging by all that, it seems, paid off rental properties may not be as golden as one would think? Just thinking out loud to try and better understand this.

 

[TacomaJD]

Summary - shoot for rental properties to be paid off near your planned retirement age, and not be eager to pay them off early unless you are done acquiring new properties and have nowhere else for your money to go.

- my take on things. Does that sound right?

 

[kushKrawlin]

You don't know him so why does it matter who? Name is Bret. Use to own a big plant in auburn. Retired and moved to Naples.

Not trying to be negative. One day, I hope to have some rental properties. But it just sounded like you had this fairy tale plan in your mind. It's way tougher than it seems.

Who are you and who sent you here?