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OT Renting houses

Old 04-14-2004, 10:15 PM
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Don't forget about vacancy loss between tenants, repairs and maintenance, capital improvements, possible legal fees to collect rent. You can eat a years profit very quickly, especially in vacancy loss. If/when you sell will you use a broker? Remember that when thinking about appreciation.
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Old 04-14-2004, 10:41 PM
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Originally posted by georges
Didn't most, if not all, legislators start (low)life as phucking lawyers to begin with? duhh!
Georges, instead of speculating, why don't you test your theory, starting with the Florida legislature. I'm sure you can figure out how many in that body are lawyers. But even if the lawyers are a minority, I am sure that they have nothing to do with maintaining laws that protect your right to bear arms in Florida, your right to freedom of speech and the like. No, the lawyers in the Legislature merely pass stupid laws to screw honest landlords out of their hard earned money.

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Old 04-14-2004, 11:12 PM
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I've rented several out.

Here's what I've learned.

1) You either get a solid house with good usable storage (stairs to floored attic) that is in the lower price range in a modest neighborhood. Proximity to shopping, the business district, and excellent schools is a must for this house.
You get a higher priced house in a reputable neighborhood that is in a rapidly developing upscale side of town. It will also need better than average storage and a 2 car garage.

The first house is for the young family with small children. The school situation is a big deal, as is the storage. You will not be able to raise your rent price over the norm for the range and size, but your storage and school and such will let you attract "better" renters.

The second house is for the newly relocated executive or the guy who is building a new house and has to sell the old one before the new one is finished. Turnover will be 6 to 9 months on that house, but you will have excellent clients to choose from.

Big high dollar rental property only makes sense to me if you can have enough equity in the house to make your 15-yr mortgage payments end up being around 35% of the expected rent.

As you own the property, you will be able to depreciate it on a 40 year straight line.

Remember, though, that if you plan to sell it, you will have to recover the depreciated amount at whatever the recapture rate is at that time (currently it is up to 25%, although there is a chance that it will eventually be reduced to the capital gains rates depending on who gets elected).

I agree that 180k sounds like a stout number for a rental, unless it is "perfect" for relocators and orphaned folks building homes. It will need to be in the "right" neighborhood and you will need connections with a realtor who knows that market.

good luck.

If I were you, I would be aiming at a $90k house.
Concrete drive. Detached garage.
Copper pipes (they give best service).
Plastic drains (Dran-o won't hurt them).
Double water pressure regulators.
Laundry area with drain to the outside.
Brick or vinyl siding.
Vinyl windows.
Good level yard with no drain problems.
City sewer (your renters can screw up your septic system so bad that it will cost you $15k to fix).

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Old 04-14-2004, 11:24 PM
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There are 2 ways to make money in the rental biz.

1. When you buy a unit and it's paid for (i.e. no loan) and it's rented.

2. When you sell a rental and realize your capital gains. (and if you depreciated it, you'll have to pay tax on that amount depreciated)

Otherwise lost rent, repairs, attorney fees, your time spent to rent, or 10% paid to a firm to manage it for you, etc etc will take up what little you make if you have a loan.

It's great to be in it if you're in it for the long haul. And that will be probably 10 + years for most folks.
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Old 04-14-2004, 11:38 PM
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If you would like some advice i will be glad to talk to you.I own 43 houses right now and flip up 65 houses a yr, the money is great,pretty much retired already at 37.I have a full time crew that work for me and take all my phone calls from tenants. All i do is write checks once a week.There is to much to go over on the computer so give me a call if you want.I can definetely help you out with all your questions,i have been doing this now for about 11 yrs.
815-968-8087 HOME
815 243-8087 CELL

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Old 04-15-2004, 12:02 AM
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Originally posted by HyperBaja
Here 180k is a 3-4 br 2 1/2 bath house, nice neighborhood, 2 car garage.

Or should we look for auction 50k houses?
Unless you plan on renting to celebrities or the Partridge Family, I would stick with 3 bedroom and no more than 2 bath. Anything bigger and you're getting out of your target income IMO.

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Old 04-15-2004, 12:06 AM
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damn.... 43 houses! and you FLIP 65? A friend of mine flips about 20-25 a year and he is doing REAL well. Are you buying and renovating the houses you flip, or just buying distressed property to help out a homeowner that is about to lose it anyway?
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Old 04-15-2004, 12:54 AM
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i do a little of both,some get rehabbed and sold,some are just wholesaled to other investors,some are rented and sold as turn key operations,every house is different,depends where i can make the most money.The most important thing is a very creative tax person,i would have to say i have one of the best in the country,she worked for the I.R.S. for 20 some yrs as a auditor and is now is on our side.
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Old 04-15-2004, 01:10 AM
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Originally posted by buck183
Who the hell considers $180k plus homes rental property?

You can buy 2 new homes at that price where I come from. Decent homes at that.

$180K is a down payment!!! Here in SoCal there are ****hole properties (houses) that rent for $1800 a month, and range up to the top-dog stuff at $25K a month.
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Old 04-15-2004, 01:47 AM
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Yeah, Nort, but we're talking about the USA, not Mexifornia.

We all realize that a 1400sf house goes for $700,000 out there.
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