Rental Property

[Grape]

is it more lucrative to start with cheap properties ie like trailer homes or stick with real brick homes. Reason i ask is i have a quarter acre in granbury sitting their doing nothing and have free income to build a trailer home on it to rent out but haven't thought itd be worth it.
Neighborhood is mix of everything guy next to my property has trailer home guy across has brick house.

only way to make money with ONE rental property in DFW is a house within 1 mile of TCU or SMU that rents for $2500/month to college kids.

[347Mike]

I wouldn't want kids living in my house.

That raises a good question. I wanted to upgrade the interior of my house ie wood floors, counters, bathrooms etc. However the more I think about renting, I think I wi ll be better off leaving it in it's factory setting. I don't want to invest $4-5k in floors and paint only for an extra 50-75 a month and possibly have them ruined or replaced. This is why I am asking these questions though. I don't know the best way, what works and what doesn't.

[03mustangdude]

only way to make money with ONE rental property in DFW is a house within 1 mile of TCU or SMU that rents for $2500/month to college kids.

starting point lol

[SVT Lurch]

compared to houses in my area that are for rent and it looks like I can get almost $400 more than what my current escrow payment is. Now being the novice I am, I have no idea if this is decent, good, or terrible when you factor in all the costs associated with renting.

If you can have positive cashflow that is awesome. Most of the time you're lucky to come out even. The real money maker is when you sell the property (unless you just hold on to them all and continue renting them for much more than your tax and insurance payments like a few retired clients do).

I think I already know the answer to this but do you typically need someone in the rental property or a contract signed in order to be approved for another home? I know there are a lot of things factored into this like credit score, networth and income but I am curious as to what all is factored in and how hard it is to have two mortgages.

You now have to have 2 filed tax returns showing rental income to be able to use that income to offset the payment (unless you can get an appraisal to show you owe less than 70% of the house's value) and then you can use 75% of the rental income to offset that payment. You will also need 6 months (12 is preferred) reserves on each property you own (after your down payment on the new house).

[Real Estate Nate]

Where do you want to do happy hour?

[WOMACK03]

The key to being a successful landlord is to carefully screen your tenants before they move into your house. There are companies that will run background / credit checks on your prospective tenants for a fee (charge your prospective tenant an application fee to cover this) and it will be worth every penny to you.

Get a good deposit.

Be a good listener when the tenant has a complaint. Address the concern as well as possible if it is realistic.

Get the rent on time. Give notice immediately if it is late.

Price competitively. You don't really want to have the highest rental price on the block...you want a house that is rented and stays that way. Be a little lower than your competition. Every day that your house is empty costs you $$$$.

This is perfect info.
I screen to the enth degree, and make sure all bases are covered.(deposit, legal, ect.)
It is also a great idea to be handy, or know someone with building\remodeling abilities. PM me if you want to talk mor specifically.

[347Mike]

Where do you want to do happy hour?

Where are you located again?

[SMKR]

Anyone own a few rental properties that wouldn't mind answering a few questions for me? I am looking for an entry into this and plan on renting my house in another two years. I am just looking for someone to bounce some questions off of and answer some general questions for a newbie.

Thanks.

Ive got 3 homes currently so ill give my 2 cents. My 3 are all worth <$100k each, just 3/2's that I bought cheap, put some $$$ into, and currently renting out with 1 year leases each.

In the 4 years Ive been doing it here are a few things I've learned:

1. Get first and last month's rent up front
2. Make sure they understand when rent is due & how it's to be paid
3. Do not spend a lot of $$$$ really updating the house with nice stuff- renters will tear shit up
4. Make sure they understand that when anything goes wrong, they let you know about it
5. Do thorough background checks and call their references/previous landlords
6. Make sure they sign off on your requirements (ie- no smoking in house, or no large dogs inside, etc)

That's all I can think of off the top of my head. In my 4 years of owning rental property Ive taken in $98,000 in rent and paid out $96,000 in repairs/updates/etc so im pretty much breaking even and hoping to see more on the income side vs. the expense side this coming year.

[Grape]

In my 4 years of owning rental property Ive taken in $98,000 in rent and paid out $96,000 in repairs/updates/etc so im pretty much breaking even.

the defense rests

[347Mike]

Ive got 3 homes currently so ill give my 2 cents. My 3 are all worth <$100k each, just 3/2's that I bought cheap, put some $$$ into, and currently renting out with 1 year leases each.

In the 4 years Ive been doing it here are a few things I've learned:

1. Get first and last month's rent up front
2. Make sure they understand when rent is due & how it's to be paid
3. Do not spend a lot of $$$$ really updating the house with nice stuff- renters will tear shit up
4. Make sure they understand that when anything goes wrong, they let you know about it
5. Do thorough background checks and call their references/previous landlords
6. Make sure they sign off on your requirements (ie- no smoking in house, or no large dogs inside, etc)

That's all I can think of off the top of my head. In my 4 years of owning rental property Ive taken in $98,000 in rent and paid out $96,000 in repairs/updates/etc so im pretty much breaking even and hoping to see more on the income side vs. the expense side this coming year.

They must tear shit up to a whole other level. If my math is right that is 6,000 a year for each house.... I am expecting to make some money off of this. I don't want to be stuck breaking even. Are there any precautionary steps you can do to see their living habbits? I know you probably wouldn't ask them straight out but can you meet them at their place or anything of the sort?

I am very weird when it comes to things I own and I think if I knew someone was tearing my place to shit I would freak ultimately in affecting my attitude towards them. Everyone has wear and tear but straight up trashing it would be nuts.

You don't have to answer this if you don't want to but how much over your current payment are you charging?

[SVT Lurch]

I am very weird when it comes to things I own and I think if I knew someone was tearing my place to shit I would freak ultimately in affecting my attitude towards them. Everyone has wear and tear but straight up trashing it would be nuts.

Then it sounds to me like you don't want to own investment properties.

[FreightTrain]

That's all I can think of off the top of my head. In my 4 years of owning rental property Ive taken in $98,000 in rent and paid out $96,000 in repairs/updates/etc so im pretty much breaking even and hoping to see more on the income side vs. the expense side this coming year.

Fuck that. Your situation equals getting kicked in the balls once a month for an extra $500 a year. No thanks.

[SVT Lurch]

Fuck that. Your situation equals getting kicked in the balls once a month for an extra $500 a year. No thanks.

Most people don't have positive cash flow on investment properties (unless they pay cash for them). Any of you that own them currently care to comment on that?

[347Mike]

Then it sounds to me like you don't want to own investment properties.

No, I believe in people not trashing where they reside. If you don't show any responsibility or are a slob, I probably don't want to do business with you anyways.

I lived in a few rental properties growing up and we lived clean, and spent the last two days cleaning the shit out of the place to get our deposit back.

Do you charge first and last month on top of a deposit or how does that work?

[SVT Lurch]

No, I believe in people not trashing where they reside. If you don't show any responsibility or are a slob, I probably don't want to do business with you anyways.

I lived in a few rental properties growing up and we lived clean, and spent the last two days cleaning the shit out of the place to get our deposit back.

Do you charge first and last month on top of a deposit or how does that work?

I'm with you 100% on responsibility and respecting other people's property, unfortunately most of the people that are renting do not have that same belief.

Typically the deposit is the first and last month's rent, maybe add a pet deposit if they have a large dog.