Landlords (spinoff)

race_jeep · Feb 10, 2015

I've been wanting to buy a rental house for awhile but won't ever pull the trigger when I run across a good deal, the investment thread prompted this thread, I was just curious what the landlords of hardline had to say about it. :fish:

ibrokeit · Feb 10, 2015

It take more time than you would think. Taxes suck. And better have a maintance man you can call on a whim.

wgamble · Feb 10, 2015

When you buy a rental property, just look for good bones. DO NOT GET ATTACHED to the house. Remember you are not going to live or ever live in it. This is an investment so keep all feelings on lock down.

When you get it ready for rental remember these words and you will be just fine. LIPSTICK ON A PIG. You want it just nice enough to get someone in because by the time they leave your house will be ****ed again.

I have been buying in an old neighborhood just south of the Air Base. I hate to admit but I have been waiting for the older people to die off so I can buy their houses from their greedy ass kids. I get the houses for about half of what they are worth and my rental money is guaranteed when I rent out to active duty. If they jack my stuff up then I just proceed through their Chain of Command.

John Galbreath Jr. · Feb 10, 2015

bigsilly · Feb 10, 2015

I own one rental house, I wound up with it in a trade. It took me a year and a half to recoup the $$ amount of my investment. I am extremely lucky that my tenant is a handy man by trade and he does the upkeep himself. For example he called one day and asked if I would by the paint he would paint the interior of the house, he had paint sitting on his porch before the end of the day. I do everything I can to keep him happy. The only time I see or hear from him normally is on the first day of the month when he brings me his rent to my office, in cash. I know there are plenty of nightmare stories out there and I have the dream tenant. I honestly do not know what i will do with it if he ever decides to move. It takes a month and half rent for the taxes and insurance I have on it. Other than that it is profit at this point. With all of that said, I can see that it can be good business but you have to be careful to pick the right property and even more careful in picking the right tenants.

LightBnDr · Feb 10, 2015

When I was 22 me and 3 other buddies rented a nice 2 story house in a nice neighborhood. We partied constantly. We trashed the house. Though we paid our rent on time every time. We paid a deposit and when we moved out they kept it.

Would you rather have a tenant that is young and parties or a family with 5 kids? Seriously asking. I'm also thinking of renting my house

matth_85 · Feb 10, 2015

My plan with my current house, which I just finished remodeling is to get it paid off and when I start a family in the next 5 years or so get something bigger and rent this place. We will see how that goes... My current GF will be willed her grandmothers lake house and in all actuality when the time comes we will more than likely remodel it and move in there. Only kicker for me is I have a pretty decent shop right now and will either have to work that out down the road or build another...time will tell. May just live in my little 2BR/1Bath bachelors pad forever.

TacomaJD · Feb 10, 2015

I would like to get into rental properties one day too! I plan to rent my current 2 bedroom 2 bath house out when I am ready to build a bigger one on down the road. And then I'd like to buy other rental properties also, little by little. I know several people in the area that makes damn good side money renting out properties. I'm HIGHLY interested in this thread.

Trailabite · Feb 10, 2015

I have a house in GA that I couldn't sell because of the crashing housing market. So we rented it out. I live in SoCal so I hired a management company to handle everything. They charge 8% for their fee and with that I'm able to cover the mortgage payment with what's left over. I have tenants that have been in the house going on 3 years straight now. So far so good. This year the market has finally came back up to where I could sell it and make a little money, but I plan on riding it out for as long the tenants keep staying then I'll think about selling it.

TacomaJD · Feb 10, 2015

I know some people that swear by "rent to own" because they never finish out the owner financed loan and the landlord isn't responsible for anything that goes wrong with the house since he/she is basically just being a bank and loaning them the house. Then if the tenant(s) go a couple months without paying a payment, you get the place back and they gtfo. I'm sure just like renting, it's probably not that simple, but not being liable for a water heater or central unit going out, would be very helpful. There again, since they would be financing and basically owning the house while they reside in it, they could make physical changes to the house/property, whereas they cannot do so while renting unless cleared with landlord. This could spell bad news for you if you are renting out a fairly nice place. My current house is small but nice for what it is. I would **** a golden monkey if someone trashed it. But I also believe that I could find responsible tenants and judge a stranger's character good enough to where I can avoid major disasters like getting my house fawked all up by some dumbass renters.

The house next to mine is about the same size and quality, but has no outside structures. I have a 20x24 shop and a 10x12 storage building on my lot. The house next to me has been a renter house as long as I've lived there (6.5 years), and has never stayed vacant longer than a couple months. There has been about 6 different parties of people through it, and just got new neighbors last weekend after one of my friends moved out and on to somewhere else. While he was living there, I went in the house to check it out and it was in just as good of shape as mine. That landlord has had extremely good luck with the tenants of that house, but I'm sure he screens the **** out of them....which is exactly what I would do. It rents out for $525 a month and I believe I could easily rent mine out for $575 a month since it has other structures.

Sucks that you can't establish a new trailer park in the state of Alabama anymore. Buy about 10-20 acres on a backroad somewhere, but about 25-30 trailers on it, immediate cash flow around here. You can buy an existing trailer park though, which is what a friend done and he is making a killing from it. He has 69 trailers he rents for $125 a week (charges by the week because there's more pay periods in a year that way than by the month.) He also has several houses he rents and then buys and sells properties too when he comes across a deal, for a quick flip. He makes damn good money and that's all he does.

It just takes balls to take the plunge and face the risk, but a well calculated plan can usually avoid major risks. If you think everything out, develop a plan, stick to it, and understand what to expect, most likely it will be a success and could lead to greater things.

TacomaJD · Feb 10, 2015

My lawyer buddy also does rental properties on the side and he and I are supposed to grab dinner one day when we both get a break, and talk about it. I guess he wants to teach me the ways of the wise when it comes to rental properties, so I am looking forward to that luncheon. My main questions for him are basically going to be about exactly how many restrictions I can get wrote up in the rental terms to cover my ass in the long run from corrupt tenants, and to get more info on the owner financing vs. rent to own ordeal.

wgamble · Feb 11, 2015

Pay them off as soon as you can. Don't be alarmed if the interest rate is higher because it is an investment property. After you purchase one and pay on it for a year or so, you can ask for a rate reduction. This is not a refinance, it is literally a reduction in your interest rate. If you have paid on time every time and you have a good credit score then the bank will reduce its rate. It's either reduce the rate or lose the business.

mikebrsa · Feb 12, 2015

I have 4 personal properties which are ok but i always have to chase rent due to they are in bad areas. But my day job i am a property manager of 490 single family homes. Just be ready for phone calls all the time, on call 24/7.

fl-krawler · Feb 12, 2015

wgamble said:
When you buy a rental property, just look for good bones. DO NOT GET ATTACHED to the house. Remember you are not going to live or ever live in it. This is an investment so keep all feelings on lock down.

When you get it ready for rental remember these words and you will be just fine. LIPSTICK ON A PIG. You want it just nice enough to get someone in because by the time they leave your house will be ****ed again.

I have been buying in an old neighborhood just south of the Air Base. I hate to admit but I have been waiting for the older people to die off so I can buy their houses from their greedy ass kids. I get the houses for about half of what they are worth and my rental money is guaranteed when I rent out to active duty. If they jack my stuff up then I just proceed through their Chain of Command.

Words to live by!

A few general rules I live by.

Don't finance your rental unless you have enough disposable income to cover the mortgage on the place when rent isn't paid. You may have to flip 3-4 houses to get the capital to buy a house outright.

Look for run down houses in good neighborhoods. Its easier to repair a house and renting it will be easy in a good area..No matter how nice the house is, if it is in a shitty hood, it either won't rent, or you will only attract renters that belong in that hood

Have a well written lease. Make sure it spells out when rent is due, when they can be evicted, how long they have to get out once evicted, and if they are going to be responsible for any repairs or damages to the home. I do one and two year leases. If you sign a two year, I discount rent by $50 per month

ALWAYS get first/last AND a damage deposit of atleast what ever the deductible is for your renters insurance

Make sure you have renters insurance

Property taxes. Make sure whatever home you choose, that the property taxes are no more than 1.5 times what you could collect per month in rent. Property taxes and renters insurance will usually cost you 2-2.5 months of rent for the year

Learn how to do repairs yourself.. Your renters will destroy the home, and it will need new paint, flooring and possibly even some drywall may need to be repaired when they move out. Renters insurance will cover this.

So far I have been really lucky. All 3 of my renters pay on time, and take good care of the homes they are in. The only time I have ever had issues with collecting rent, or damage to the home, was when I rented to family and friends, so my suggestion is don't do that