Who here owns rental properties?

[zachary]

A townhouse just popped up here that is under priced significantly compared to the comps and same size one rents for 1k a month right next to it. Thinking of jumping into the purchase. Curious to talk to some folks about tax deductions etc

[D. Lil]

Right now there really isn't any other investment that will yield the kind of returns you will get with a good rental property. If you can do it.

As far as deductions, I think just taxes, repairs, etc.

[beefed88]

What is the price?

Taxes deductions are interest, insurance, depreciation, repairs/improvements/maintenance. Mileage.

[kobuzz]

Just make sure your ok with the call at 1:30am saying "They can't get into the garage because the door wont open" or my favorite" The toilet is flooding the floor and I don't know what to do!!"
Make sure you get a deposit that's substantial enough they won't want to lose it when they move out so they don't trash the place and NEVER cut them slack on paying the rent on the agreed date or it WILL BE LATE every month.

[8mpg]

You better make sure the HOA allows you leasing it out.

[Scott Mc]

I recommend a company do handle all the leasing and repairs, it will make less of a headache being a slumlord.

[svauto-erotic855]

You better make sure the HOA allows you leasing it out.

There are ways around that and there are also ways around allowing felons to live on a property even if the HOA rules prohibit it.

HOAs are a HUGE pain in the ass and they are all fucked up. If I could do it over again I would try to buy a very small apartment building instead of a bunch of small condos spread through several developments.

Buying a rental property will be the smartest and dumbest purchase of your life all wrapped into one.

[JC316]

Make sure you get a deposit that's substantial enough they won't want to lose it when they move out so they don't trash the place and NEVER cut them slack on paying the rent on the agreed date or it WILL BE LATE every month.

Bingo. Don't have rental properties, but I do finance cars. You have to be a cold hearted son of a bitch or they will take advantage of you at every turn.

[yellowstang]

Bingo. Don't have rental properties, but I do finance cars. You have to be a cold hearted son of a bitch or they will take advantage of you at every turn.

Can you get me into a new Z06, nothing down right now, but in a few months I can sell some of my stocks to repay you. I would like payments around $500 a month also. This is on the Stanger's hookup plan. Thanks!

[kpc01]

We have a little over 20 in Denton county that we lease. I manage a hand full of them and we have a few other folks that handle some too. Pretty good write offs but our main problem right now is you can't really find any to buy and create cash flow. My basic rule of thumb is you need to be able to get 10% of the cost of the place plus repairs from monthly rent. This way it will cover escrows and repairs as you go. So a $150,000 place needs to bring in at least $1500 a month. Again just a rule of thumb but works great for us.

[akfodysvn]

I think you meant 1% rule. Most guys shoot for 2% but this market is tough.

Read up on biggerpockets.com. it was actually suggested on here a few months ago and I'm obsessed with the site.

I have one property that cash flows around $400 month. You need to figure costs
-principal, interest, taxes, insurance (actual numbers)
-monthly maintenance. I figure 5% of rent
-vacancy. I use 1 month or 8%
-capital expenses 5%- roof, water heater, etc
-property management 10% if you cant self manage

My expenses are a little on the low side but my rental is only 5 yrs old. I built all the reserves I need in one year of cash flow as expenses were less than $500 for the year. I will continue to put those expenses into the acount monthly even though my reserves are built up.


Benefits are the tenant builds you equity. Possible appreciation. Tax deductions for interest paid and depreciation, and most most important to me is cash flow.

Im looking to use the equity in my rental to purchase my second property. My schedule allows me to manage pretty easily working only 11 days a mo which ia a plus.

Guys crying about toilets and issues aren't good people to take advice from. This is a great way to build wealth and it takes work but it's not hard

[svauto-erotic855]

I think you meant 1% rule. Most guys shoot for 2% but this market is tough.

I typically get $650 per month out of a unit that has HOA dues of $100 to $135 per month and I paid cash for the place. You can find the kind of properties that I own for 20k each if you feel like looking.

[beefed88]

I think you meant 1% rule. Most guys shoot for 2% but this market is tough.

Read up on biggerpockets.com. it was actually suggested on here a few months ago and I'm obsessed with the site.

Benefits are the tenant builds you equity. Possible appreciation. Tax deductions for interest paid and depreciation, and most most important to me is cash flow.

Im looking to use the equity in my rental to purchase my second property. My schedule allows me to manage pretty easily working only 11 days a mo which ia a plus.

Guys crying about toilets and issues aren't good people to take advice from. This is a great way to build wealth and it takes work but it's not hard

This is spot on. I have four rentals and once you start to get them paid off they really snowball.

If work paid you $500/mo. (plus appreciation) to be on call and you had to pick up the phone 3 times a year, would you do it??

From my experience the guys that cry about getting called either have not had a rental and this is their mentality about working hard and creating wealth,OR had or have a rental that does not cash flow so dealing with tenants is a PIA.

BTW I would always recommend saving for retirement first through 401ks and IRAs, and using rentals as the next place to put money.

[DamonH]

I don't live close to ours, and got tired of driving across town for issues or showings (or more importantly - NO showings). I'm paying a property manager, and for the most part life is MUCH better. They rented it out without issues and got more per month then I was getting - which almost makes it a breakeven for me after they take their cut. I had to evict my last tenants, which was a PITA, but now it's on autopilot. The market has taken off, so it's just appreciating for me and my tenants are paying for it.

[David]

Property manager is a must. Takes the headache out of it that most people bitch about.