Who here owns rental properties?

[zachary]

I am not worried about a few phones calls throughout the year. My dad is actually semi retired and has built several houses before on his own so i was thinking about making him get an lLLC and have him do all the maintenance calls etc. Although I have not spoken to him about this yet.

I am looking at small one bedrooms around a school campus here where i live. All rent in the 800-100 a month range very low HOA costs. Played with a 15 and 20 year note and either of them I could still make like 100$ a month now potentially, and the properties are cheap enough i could cover if had to evict or sat vacant for a while.

in example the one i am looking at first we can get for 82k(foreclosure), good neighborhood just a small 2/1 that is 1000 square feet. right next door is one that is for sale for 100k that is same size. same block one same size with updates rents for 900$.

The one i am looking at is not updated etc. Thinking of getting it updating it, paint, updated appliances etc and am pretty sure could have some instant equity to build on for the future. Right away i see all those tax write offs the first year

[kpc01]

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

Sorry yes 1%. Although I would be ok with 10%!! I do the work on almost all of our homes and just take the pay that I would of paid the a/c guy or plumber or whatever. So that way I get my income from houses but also get the extra pay I would of paid out. Its not always fun at 7pm with a no A/C call but like mentioned....its a job that makes money you do what you have to do. Managers usually do get more money because they have MLS and can comp current rents. I'm a realtor so I can run them and that helps too. Most people don't realize how much the homes around them are going for and under price them in this crazy market.

[Y2KSilverGT]

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.

Are these in Dallas ? Section 8 ? Any direction on where to start looking for one of these units ?

I had an old co-worker that used to buy HUD foreclosed apartments in this price range and he did pretty good.

[8mpg]

I am not worried about a few phones calls throughout the year. My dad is actually semi retired and has built several houses before on his own so i was thinking about making him get an lLLC and have him do all the maintenance calls etc. Although I have not spoken to him about this yet.

I am looking at small one bedrooms around a school campus here where i live. All rent in the 800-100 a month range very low HOA costs. Played with a 15 and 20 year note and either of them I could still make like 100$ a month now potentially, and the properties are cheap enough i could cover if had to evict or sat vacant for a while.

in example the one i am looking at first we can get for 82k(foreclosure), good neighborhood just a small 2/1 that is 1000 square feet. right next door is one that is for sale for 100k that is same size. same block one same size with updates rents for 900$.

The one i am looking at is not updated etc. Thinking of getting it updating it, paint, updated appliances etc and am pretty sure could have some instant equity to build on for the future. Right away i see all those tax write offs the first year

just remember if you do update it, you just make it rental friendly. Granite countertops and what not usually will not give you a return. You need to see what others are renting for and keep it in that same level of updates. Nice appliances usually dont bring returns either. People who rent in the sub $1000 market dont expect stainless appliances, solid surface counters or wood floors. Laminate counters, over mount stainless sink, white/black appliances, laminate floors or tile are the way to go.

[David]

Appliances? You get a stove and maybe a dish washer at a bulk of our properties.

[svauto-erotic855]

Are these in Dallas ? Section 8 ? Any direction on where to start looking for one of these units ?

I had an old co-worker that used to buy HUD foreclosed apartments in this price range and he did pretty good.

Most are near Skillman and Royal; a few others are near Walnut by Richland. I just look on Zillow when I have some cash for a new one but none have been popping up lately. I bought the first 2 from a client who was sick of dealing with them and bought more because many of my employees have a hard time renting a place. I have never even considered dealing with section 8.

[Y2KSilverGT]

Thanks, I'll take a look and see what I can find

[akfodysvn]

just remember if you do update it, you just make it rental friendly. Granite countertops and what not usually will not give you a return. You need to see what others are renting for and keep it in that same level of updates. Nice appliances usually dont bring returns either. People who rent in the sub $1000 market dont expect stainless appliances, solid surface counters or wood floors. Laminate counters, over mount stainless sink, white/black appliances, laminate floors or tile are the way to go.

Definitely agree with making it comparable with others in the area. However if you can and the area supports it... I would update it for a higher caliber tenant that's willing to pay more.

My rental is granite, higher grade laminate wood floor, 5" trim, etc. I was able to rent for significantly more than if it wasn't upgraded. My applicants could have easily qualified for the mortgage but they choose to rent.

Various strategies and solutions to being a successful real estate investor. It's all about your comfort level and what works for you. Basically there is no one set way and if someone says they have the only way... Run away as they want to sell you some garbage.

[KBScobravert]

I'm going to revive this and see how everyone here with rentals has done 3 years later.

My wife and I are discussing getting our first rental. I'm already dead set on a management company. Since I primarily work overseas, I dont need to be dealing with it. I like to use my day job income to start building a rental portfolio, now that CC debt us zero and mortgage is almost paid off on our current home.



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[bcoop]

I’ve been wrestling with this for a year. I’ve got +/- $170,000 in equity in my first house and owe less than $100,000 on it. On one hand I could really use the equity for my next place. On the other, I’m in a position where I could refi (not a cash out refi), and it would cash flow $6-700/mo.

Wife is against it, but, it isn’t really her call. I don’t know the first thing about renting, I just know this is a prime opportunity to do something like this.

[1carcrazyguy]

We just bought our first investment property last week. We bought a commercial lot. We were planning to buy 5 acres and build either storage units or possibly shops to lease out. The property has approx 500 feet of highway frontage and TXdot is planning a highway expansion (already done half the road already) that is scheduled to start later this year or early next year. So rather than build anything now and take a chance on the highway construction hurting business or hindering access. We decided to spend the land and build budget to buy a total of 10 acres. We figured if we bought the 5 acres. If and when we decided we needed more. The land would be much more expensive if it was even still available. The time it will take the highway Dept to complete the project, we will have saved enough to build more by borrowing less. 5 acres didn’t seem like a lot....but once you start mowing 10 acres you realize it is a pretty big chunk of property!


We shopped for a couple of years for land. We originally wanted residential rentals. However my brother talked me out of that. He bought about 15 rentals. He then decided to buy a storage facility that his buddy was selling due to moving out of state. A year into owning that. He is selling all his residential units and going to all storage units. He said it is way way less stress and headaches.

[beefed88]

I have 4 rentals in watauga. Single family 3 and 2 bedroom homes. I started 7 years ago with my first house. Instead of taking my equity i decided to rent it and it ended up working out. All 4 homes are on the same street.

I manage my own properties and do all the repairs. i would really have to see the math on buying a home right now, renting, and using a mgmt company.

I dont think you need a mgmt company. You need a good set of contacts in the trades. If you buy in the right area at the right price point they rent themselves. I have my tenants on auto pay through erentpayment and some just zelle me.

I have learned a lot and i am still learning for sure.

[Gasser64]

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.

What about hiring a property manager to deal with all the stuff you don't want to

[TX_92_Notch]

I’ve been wrestling with this for a year. I’ve got +/- $170,000 in equity in my first house and owe less than $100,000 on it. On one hand I could really use the equity for my next place. On the other, I’m in a position where I could refi (not a cash out refi), and it would cash flow $6-700/mo.

Wife is against it, but, it isn’t really her call. I don’t know the first thing about renting, I just know this is a prime opportunity to do something like this.

That is EXACTLY how I got started with a rental. I lived in a house for 13 years and kept it when we moved. I had around $150k in equity teasing me but my monthly payments are crazy low and I'm $500 in the black every month (and that's using mgmt. agency). It'll be paid off in 4 years and then it's more like $1,100 profit every month for the rest of my life, hopefully steadily increasing.

I'd like to acquire more, but we're also trying to build a house for us and another rental isn't in the cards for a while.

[KBScobravert]

I may have the wife talked into our first rental. Need to find one first, of course.

We are looking for around $200,000-220,000 asking price and putting 20% down. I am seeing "for rent" homes on Zillow for $1,700-1,900 in neighborhoods with homes for sale in our same target asking price range. Doing the math, it won't cash flow me very much after a management company and after setting a little to the side each month to cover repairs. But at least it will be letting someone else pay off the mortgage for me.