Man, this is going off on a tangent such that maybe it needs it own thread.
Originally Posted by
SonicFlyer
This is VERY high risk and could cause you to at best go bankrupt and at worst lose your primary residence. Some people are successful at it, others are not. Even if you do everything right using this method, environmental and market conditions beyond your control can absolutely screw you. I would recommend never financing your personal residence and ideally pay for the first rental in cash or 80% in cash. Yeah the numbers don't look as good like that but you're also much lower risk and not building a house of cards..... Remember rental and housing prices can decline sometimes.
No one is talking about financing their home here. Reading comprehension is hard.
Originally Posted by
rickair7777
Word of caution on going all-in on rentals... be careful what state you do it in. Some of the democratic socialist republics lately seem inclined to rent controls and even worse, draconian eviction protections... basically the occupant has the right to stay until they feel like leaving, you can sue them for rent (good luck), but only if they don't have an excuse like health or family crisis. If that gets too bad, the resale values will drop to as nobody will want to own/operate rentals and the market will have to drop low enough to entice renters to buy... in a market where they can already live there for free. You could blow the fruits of your life's labor to provide free housing to indigents and slackers.
I let in Texas. Not California. But yeah, I know.
Originally Posted by
pitchtrim
I've had to evict someone recently and it makes you want to murder. I luckily live in a state where they make the scumbags move out, but as the landlord you have to cross all I's and dot all T's. The maddening part for me was at the courthouse they will assign them an attorney. So they try to find loopholes to get cases dismissed so you get to file again and go through the whole process again, while said scumbag lives for free. They almost act like you're the bad guy while you're being stolen from. I had the case dismissed on a loophole then got my buddy lawyer to show up. In the end the tenant should have taken the deal I offered back when I predicted an eviction and court were eminent. Instead he tried to play the system and lost out bigger. F him. On a side note that's going to sound condescending...I don't understand why you breadwinners are needing permission from the wife on how to invest/ spend money.
I used to have another rental house when I lived in another state that I tried to manage myself. I’ll never do that again. I don’t want to deal the tenants mainly. But once you do have a good property manager handling things, you’ll probably find they pay for themselves anyway.
Regarding the breadwinner comment, major financial decisions that effect both of us are a both of us decision. Seems strange to me that anyone would do it any other way. But also, this is a two breadwinner household so it would be extra strange to exclude her because I’m “a breadwinner”.
Originally Posted by
rickair7777
Makes sense, Non-socialist states, where the refugee socialists are likely to flee and drive up property values and rents.
This too. I correctly did this with my first property, it took about 15 years, longer than I expected but it did get there.
Yes your tenant demographic makes a difference, most especially if you manage it all yourself and hope to have any QOL on your days off. Slum lords actually have higher margins but they have to deal with a lot more BS. Wealthier tenants have high expectations, are used to getting what they want, and know how to work the system. Concur with mid-level.
With more than a couple units I'd probably outsource the management too. That can actually mostly pay for itself... professionals can often get higher rent with less vacant time, and have volume accounts with Mx pros. I've had tenants call about broken garbage grinders, etc. If I'm on the road I'll just tell them to call a plumber and give me the receipt. With a manager, his plumber will go in and find the fork the tenant dropped into the grinder. Then the manager charges the tenant instead of charging me.
That last paragraph is gold. Our property manager has a stack of applications on his desk already when our house goes vacant and numerous contractors and technicians on speed dial for when tenants call in a problem and I’m sure he’s got a negotiated rate with them. Yeah, he gets a cut of the rent but it rents faster and he’s got more experience culling applications for new tenants than I do so I’m betting he’s getting better quality tenants than I would as well. He’s well worth the expense. Having done it with and without, I’ll never do it myself again.