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-- thinking of purchasing some realestate to rent out

thinking of purchasing some realestate to rent out

a buddy of mine does this for a living and makes some good cash doing so. however, i'd just want one or two places to start with.


is there any major risks in renting out property when i have zero preference in it? the extra cash would be nice, and i know there is going to be a good bit of paperwork and hassle of getting other people/myself to maintain the place, but what are your thoughts?

Ebay has really cheap houses!

no joke

commercial, residential, or industrial?

you'll be a slumlord before you know it!

quote:

Originally posted by Marc Summers commercial, residential, or industrial?

residential

quote:

Originally posted by Allied Nations you'll be my landlord before you know it!

fixed

well its great if the property is paid off. but when u have to find a renter & owe a mortgage, it can be a real bitch. Im in the middle of trying to find a renter right now & cant find one. Time to run an ad.

quote:

Originally posted by enferno fixed

lol im too poor to live in cali

buy stuff in DR i can be your advisor

I rent out 4 places, it's a handfull and I do my own books which cuts down on the real estate agent overheads, not sure if thats a good idea if you have a full time job or business already. Biggest risk really is the flat spots in between tennants where you have to soak up the cost of morgage payments for a few weeks sometimes.
Right now theres a real shortage of rental places where I live so every time someone moves out I can bump the rent up and someone will take it anyway regardless... its good being evil

Aside from rates, insurance and taxes its generally the safest way I've found to make 'some' money and accumulate assets which will see you far, along with a bank manager who is understanding.
In short, do it.

quote:

Originally posted by Lilith I rent out 4 places, it's a handfull and I do my own books which cuts down on the real estate agent overheads, not sure if thats a good idea if you have a full time job or business already. Biggest risk really is the flat spots in between tennants where you have to soak up the cost of morgage payments for a few weeks sometimes. Right now theres a real shortage of rental places where I live so every time someone moves out I can bump the rent up and someone will take it anyway regardless... its good being evil Aside from rates, insurance and taxes its generally the safest way I've found to make 'some' money and accumulate assets which will see you far, along with a bank manager who is understanding. In short, do it.

where i live is in a similar situation, more people are trying to move in than out.

however, i have enough cash to make it so i wont have mortgage payments

if it's your only asset it can be difficult. It's not like you can sell off part of your 1 home investment if you need some money, unlike a share portfolio. On the other hand, you are never going to lose everything on property like you could with shares. do you have the funds to cover the big potential expenses? Hot water blowing up, no tennant for a month or two?
my sister quit her job and has now got 5 houses on interest only loans. the rent more than covers all expenses, and in 5, 10 , however many years all the capital growth is hers. sounds like a great way to make her money work for her.

Re: thinking of purchasing some realestate to rent out

quote:

Originally posted by enferno a buddy of mine does this for a living and makes some good cash doing so. however, i'd just want one or two places to start with. is there any major risks in renting out property when i have zero preference in it? the extra cash would be nice, and i know there is going to be a good bit of paperwork and hassle of getting other people/myself to maintain the place, but what are your thoughts?

You need to be able to choose the right tenants, and haggle out business with customers and other business men. You should learn a few things about how business works, a few concepts. You don't necessarily need a degree, but you can teach yourself and ask ur friend. If your friend knows what he's doing, I'de say place yourself under his wing for a time, so you can learn the ropes.

I've been studying stock investment for the last few months. Havn't even started looking at real estate investment. I'll probably be getting a real estate license too sometime in the future, I'de suggest getting one of those too.

I dunno about in the real world, but I live in a college town and it's wicked good money to buy property and rent it out. Think about town houses/condos/small houses that can be rented out by four roomates or something. Then make the total rent the same amout/more than as your monthly morgage. If you live in an area with alot of young people/ college students and the place is decently nice (i.e. not falling apart or in a bad neighborhood) it will deffinatly rent out easily.

quote:

Originally posted by enferno where i live is in a similar situation, more people are trying to move in than out. however, i have enough cash to make it so i wont have mortgage payments

Good, you can afford to be fussy with your tennants then. Young people are ok provided they work and married couples are even better, share housing with students and stuff, keep well away from. Basically a lot of them are first time out of home, have no respect for anything and terrible with money.
They also never mow the damn lawns
Pick good ones who'll stick around for awhile, don't stuff them around when things need to be fixed and they generally won't mess you around either.

quote:

Originally posted by Lilith I rent out 4 places, it's a handfull and I do my own books which cuts down on the real estate agent overheads, not sure if thats a good idea if you have a full time job or business already. Biggest risk really is the flat spots in between tennants where you have to soak up the cost of morgage payments for a few weeks sometimes. Right now theres a real shortage of rental places where I live so every time someone moves out I can bump the rent up and someone will take it anyway regardless... its good being evil Aside from rates, insurance and taxes its generally the safest way I've found to make 'some' money and accumulate assets which will see you far, along with a bank manager who is understanding. In short, do it.

what she said. i own 1 property, and its a pain in the arse, but as long as the rent is coming in and house prices are rising (which they always are) youre set. one of my best friends is now a millionaire from doing just this (admittedly the boom helped a lot) but the basic premise is: people always need somewhere to live, and house prices ALWAYS go up in value, if youre looking at the longterm. as soon as i get enough equity ill be borrowing again and buying another place.

quote:

Originally posted by enferno where i live is in a similar situation, more people are trying to move in than out. however, i have enough cash to make it so i wont have mortgage payments

i own 1 property in manhattan - brownstone with 14 apartments

If you can pay off the mortgage outright, then you're only monthly overhead is the real estate tax and insurance. Utililities should be provided by the renter so you might have to get the rental up and running for the basics.

You're safe zone will be to estimate the mortgage return over how many months at the given market rate per square foot. Well maybe not so much in other areas just in NYC, space is a luxury so we go by sq foot and then apt attributes.

Generally renting is safe but like lilth said, if you have a day job/career and you are doing this as a side you might want to invest in a real estate agent, lawyer, and a carpenter. Those I think are the essentials to owning property. Be prepared to be called upon when renters have needs that exceed their ability to fix, ie: heat is not working which can be a building problem but that's where you're carpenter/super of the building comes into play.

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