Those of you who are landlords, couple of questions.

[Frank]

1. Do you have a home warranty company on your properties? If so, who do you recommend?

2. Have you ever purchased a brand new home you have no intention of moving into for the sole purpose of renting it out because the deal was "that" good?

Let's call it a 4/2/2, sub $200k, fast growing area. All appliances included. Closing costs up to $9k paid by builder. Low down FHA, about 2.99% interest 30y.

Since its new, it has a warranty, so less BS to deal with. After rent, you could net about $400 a month which of course you can increase from there on assuming values don't plummet.

Shoot holes in this idea. Gotchas, caveats?

[dcs13]

First question - Can you cover the note if your renter stiff's you ?

[Frank]

First question - Can you cover the note if your renter stiff's you ?

Yes, for a little bit.

[AnthonyS]

Make sure you know your property tax rates. We built brand new. Our note escrow was based on the value of the land only to start. It takes a full year to know and get your real escrow set up right. We estimated the improved value and set aside the cash to be prepared. I don’t know if everyone in our neighborhood did. Honestly, when interest rates dropped we did a refi, and the broker was surprised we knew to do it. I suppose some do not.

Also project your taxes will go up the full 10% a year since we are in TX. They are doing it and screwing all of us.

We had to fight the valuation on a brand new house. Their valuation was $50k more than we paid.

[AnthonyS]

My biggest regret to date is selling our first house. We kept it as a rental for two years and should’ve kept it. I’d love to have a dozen or so $100-$200k rent houses.

[TX_92_Notch]

Do you plan to use a management firm or handle the rental yourself (finding, screening and maintaining tenants)? That's a big factor in the numbers.

Are you factoring in a Landlord's insurance policy?

AnthonyS is spot on with property taxes - I pay $5k annually on my one rental. Don't forget to consider the lack of Homestead Exemption when you estimate the taxes. I lived in that house for 13 years and the taxes are roughly $1500 more annually now than when I last lived there (moved out 4 years ago).

[TX_92_Notch]

My biggest regret to date is selling our first house. We kept it as a rental for two years and should’ve kept it. I’d love to have a dozen or so $100-$200k rent houses.

exactly this.

We almost sold our rental a few months ago - we got a pretty solid offer the day after we decided to pull it off of the market and had to turn them down.

My ex's grandparents have 7 or 8 rentals (paid off long ago) in Garland and they're sitting pretty every year without ever touching savings accounts / retirement money.

[bcoop]

No FHA loan for investment properties. Primary residence only. Whatever loan you do qualify for, given it’s an investment property, is going to be at quite a bit higher rate. The mortgage co will want to see 6 months worth of payments (or more) set aside, free and clear.

Property management fees, you need to account for maintenance, taxes, insurance, and damages. You can write it in the lease agreement that tenant is responsible for insurance, however, with it being an REO you must carry your own policy as well.

There are easier ways to pick up $400/mo in income stream. But it requires cash to do it. Send me a message if interested. I’m about to launch a new product.

[Unicorn Jeff]

www.biggerpockets.com Go here, research your ass off. Everything from Podcasts to forums is very imformative.

[bcoop]

www.biggerpockets.com Go here, research your ass off. Everything from Podcasts to forums is very imformative.

There is some great content there, but there are also a lot of people talking out of their asses about things they know nothing about. Proceed with caution. I’ve seen so, so, so much bad advice given there.

[dblack1]

I had nine at one time. I've got one left to sell and one im keeping.

My bank would only go 15 fixed it five year balloons on a 20yr. Never found a 30yr fixed investment mortgage.

I'll never own single family homes for rentals again. Maybe a vacation property. But that won't be to make money mainly just to take the cost of ownership burden down a notch.

I paid cash for most of mine and after repair/upgrade would finance. I had a few actually end up worth more than my investment even after repair costs.

[bcoop]

I'll never own single family homes for rentals again.

Out of curiosity, care to expand on why?

[4EyedTurd]

Wow, 9 at one time! I take it you had a management company covering repairs and such? A good friend one does mobile homes, he can buy them relatively cheap, repair and rent them. I think he’s got 3 right now.

[BP]

Also project your taxes will go up the full 10% a year since we are in TX. They are doing it and screwing all of us.

That cap only applies under a homestead exemption which you can't use on investment properties.

[Ruffdaddy]

I'm gonna be a wet blanket and say that if you have to do FHA and can only afford it for a little bit without a renter...then you actually can't afford to have an investment property. Or at least not THAT investment property.

If you factor in cost growth and the other associated risks...being able to afford it for a little bit just isn't sufficient.

And as has ready been mentioned you don't get the benefit of homestead and you can't do an FHA on an investment property.

Buy a cheap condo if you're dead set on RE investing or find another product like bcoop.