Anybody Own Rental Property?
- Thread starter JimmyWa11
- Start date
I think you can only rent rental property. Otherwise it wouldn't be rental.
Terrible time to get into it, imo. Market is at peak, properties are selling well above value.
My father has owned several over the years. Still has two with long term tenants. Good and bad over 20 years of owning and renting properties.
Right now though? Hell no. You’re going to lose your *** if you’re not very careful and I sure as **** wouldn’t get involved with multiple properties in multiple cities.
Right now though? Hell no. You’re going to lose your *** if you’re not very careful and I sure as **** wouldn’t get involved with multiple properties in multiple cities.
- You can't do enough background checks on potential clients.
- Against common thinking, most reliable tenants are Section 8 beneficiaries. A, they don't want to lose their government gift, and B, authorities inspect their apartment each year so they again have incentive to keep it clean & undamaged.
- Against common thinking, most reliable tenants are Section 8 beneficiaries. A, they don't want to lose their government gift, and B, authorities inspect their apartment each year so they again have incentive to keep it clean & undamaged.
Have over 100 units. I've steered several first timers into the BRRR method. It's a great plan. But like 80 said, it might be the worst time of our lifetime to buy right now.
Im not interested in selling anything and haven't sold anything in decades. But I have a closing tomorrow on a 5 Plex I own. California buyers came in, offered me something nutty. Never came to look at it etc etc. Prices are nutty.
Im not interested in selling anything and haven't sold anything in decades. But I have a closing tomorrow on a 5 Plex I own. California buyers came in, offered me something nutty. Never came to look at it etc etc. Prices are nutty.
^
To follow up on that point, most of the people I know that have done well have pretty much made it their profession and career, owning dozens of properties.
Those that just buy a handful as a side gig (like I did as a younger and not as wise Tskware) end up spending a lot of time for not much compensation.
True story, I never had more than 4 or 5 units, but decided to sell everything when one of my renters was on the 6 o'clock news, barricaded himself inside of my house, took a shot at his ex wife, then the SWAT team used teargas to get him out of my house. I was OVER IT right then and there.
I've sold nearly all my properties. Putting the money in other places the next couple of years. Eventually all the amateurs will quit overpaying for real estate and some deals will be available again.
I currently own a duplex, live in half of it and rent out the other half. The guy who owns 100 units probably forgot more than I know.. but ask away.
I enjoy it, but my stance has changed over the last few years. I went from wanting to build an empire of units.. down to 10.. and now I don't know if I'd want more than a few. It takes work for sure, and you work for yourself. There's no boss, no manager, no help.. it's just you figuring **** out. Not sure how to screen for new tenants? Figure it out. Not sure how to fix a broken door? Figure it out. And that can be stressful.
.. but I also think it affords someone a ton of financial freedom. My tenants rent literally pays for all of it.. mortgage, taxes, insurance. Now if something big breaks, I might go into the red.. but it's also stuff that makes the house worth more, and is a write-off.
Speaking of write-offs.. owning property only makes sense if you have a good accountant.
I enjoy it, but my stance has changed over the last few years. I went from wanting to build an empire of units.. down to 10.. and now I don't know if I'd want more than a few. It takes work for sure, and you work for yourself. There's no boss, no manager, no help.. it's just you figuring **** out. Not sure how to screen for new tenants? Figure it out. Not sure how to fix a broken door? Figure it out. And that can be stressful.
.. but I also think it affords someone a ton of financial freedom. My tenants rent literally pays for all of it.. mortgage, taxes, insurance. Now if something big breaks, I might go into the red.. but it's also stuff that makes the house worth more, and is a write-off.
Speaking of write-offs.. owning property only makes sense if you have a good accountant.
Good point. Also, section 8 gives you a percentage of their rent the 1st of every month. In NY they pay like 2/3rds.
At the same time, I try and stay away from "trashy" people. They will ruin your house, and they also know the ins and outs of being a tenant, which means they know what they can and can't do.
Surprisingly, college students aren't bad. They don't know the rules, which means you have the upper hand, and you can normally get a parent to cosign.
When you get a good tenant, do whatever you can to keep them.. even if it means losing a bit of money because you don't raise rent. I'd rather give a good tenant a discount to keep them.. then going through the whole process of cleaning, repairs, screening.. just to get a bad tenant that moves out in a year.
Any thoughts on the corporate entities/investors, like Blackstone, cornering the market and driving prices up? Will the prices rise longer than expected due to them becoming bigger players in the market?
We've been in the rental business for years...therefore don't have any experience in BRRRR. The plus we have is that all of them are paid for, so no mortgages....just upkeep, insurance, and taxes. So that simplifies things a lot. No worries to speak of if a tenant moves out.
Have both residential and commercial. Our situation is unlike most.
Have both residential and commercial. Our situation is unlike most.
I hope not, sure making it very difficult for young people to get their first house
It seems to me that investors and companies go after larger 50-100 unit places. I don't know if they go after duplexes and 4-unit places so much, probably not worth their time. Every new building means another location for things to go wrong, where as if you have say an 8-unit apartment building.. it's one roof, one lawn/driveway to maintain, etc.
Hard to say where we go from here. I know that new housing starts are skyrocketing.. Much of which was put on hold because the shortage of supplies and subsequent price hikes... a good example being lumber. So I wonder if and when these homes are built, and people move away from their "1st home", if the market evens out, supply comes back, bidding wars stop and prices even off.
Speaking specifically on rental properties.. the housing price hike has narrowed the margins to make money. My duplex was $150k, and it's now estimated at $220k.. that's almost $350/month more in mortgage. At some point, being a landlord for some of these properties just isn't worth it. That price increase could mean the difference between making money and losing it. That, coupled with inflation, loan forbearance ending.. I could see it at least flattening out. But don't think we're ever going back. Home prices have really only dropped once, and that was the housing crisis in 2007. They go up, and they may flatten, but they almost never go down.
I currently own a duplex, live in half of it and rent out the other half. The guy who owns 100 units probably forgot more than I know.. but ask away.
I enjoy it, but my stance has changed over the last few years. I went from wanting to build an empire of units.. down to 10.. and now I don't know if I'd want more than a few. It takes work for sure, and you work for yourself. There's no boss, no manager, no help.. it's just you figuring **** out. Not sure how to screen for new tenants? Figure it out. Not sure how to fix a broken door? Figure it out. And that can be stressful.
.. but I also think it affords someone a ton of financial freedom. My tenants rent literally pays for all of it.. mortgage, taxes, insurance. Now if something big breaks, I might go into the red.. but it's also stuff that makes the house worth more, and is a write-off.
Speaking of write-offs.. owning property only makes sense if you have a good accountant.
Absolutely. When I first got out of college, I owned 3 units. And I did the painting, the plumbing, the grass cutting etc etc myself. I had just those 3 for years, couldn't handle anymore. Now that I have a lot more units I have 3 direct employees, plus a plumber who almost works completely for me. It's much less of a headache for me now with over 100 units, than when I had 3. It definitely makes a difference being set up for it.
It's an interesting question, and one that is playing out right now. In Nov Zillow announced they were getting out of the home buying business. Firing over 2,000 employees and reportedly had lost over $540 million in recent years.
Buying properties in that quantity seems impossible to me. That's alot of infrastructure required in alot of different markets. Zillow lost that kind of money in the best housing market of our lifetime. Just think what will happen if/ when the correction occurs, and you are sitting on thousands of homes.
Blackstone of course acquires commercial and maybe large multi family mostly. So that's different and sustainable. But the single family home game that Zillow and several others have tried doesn't seem plausible to me.
We had this discussion like a year and a half ago on this board I think. People were saying it was going to crash and I disagreed. There’s a massive inventory shortage right now, it’s not going down any time soon. Like you said it may plateaus in a couple years but my guess is it just keeps rising but maybe more of a 3% per year type thing.
Nice! Yeah idk if ill ever go much deeper. I still have my full time job. Maybe if the right property came along, but like you guys said, the market is just too crazy. I see some of these properties being sold near me and I just laugh. Plus I'm not all that handy, even though I'm learning. I think one of the best traits you can have, if you want to get into owning rental property, is to be handy. I have amassed a few guys to handle work. I have an excellent plumber and hvac guy, also a Mason guy.
How are your units spread out? Lots of duplexes, or a few apartment buildings?
I own property in sandestin. Vacation there 3-5 times per year, AB&B it out the rest of the time. Florida is a great place for that, aside from down payment, place doesn’t cost me a dime as guests fees cover my entire monthly expenses and then some. Florida property only going to increase for foreseeable future.
Only have 1 duplex left. Everything else is bigger, a 12 Plex, 11 Plex, 28 unit apartment etc.
Like you mentioned earlier, it's easier to have it all under 1 roof, instead of 28 different ones.
Seems like a good deal for anybody in LEX looking for a possible AirBnB, etc..
https://www.explorelexingtonky.com/...5VeLydZrQEjtM5ft2f9vnlyd80usnW6casgRGSx9zlU18
https://www.explorelexingtonky.com/...5VeLydZrQEjtM5ft2f9vnlyd80usnW6casgRGSx9zlU18
I am in the process of selling a few of mine. I just sold a tri-plex in December and selling one of my SFR to my tenant. Actually signed the contract yesterday and closing next month. I have two more to sell in the next couple months.
I bought a loft in downtown last year and under contract to buy another one later this month. I will only Airbnb these as thats the way to go if you can. There is some serious money there if you are in an ideal location. I got bored with the month to month SFR stuff.
I have a SFR in St Matthews that is paid off and will not sell until my girls are ready to go to college. Hopefully they dont go to UofL but I wont have to pay for a place if they do. If not, I will sell and pay for their college.
I did not have any issues with Covid and tenants not paying but I will never sign a lease for more than a year and would do month to month after that. You could still evict if the lease was up. I always thought a 2yr lease would be nice but not now.
Buying in this market if listed is not smart. You are competing with first time home buyers who are desperate to find a home and paying over top dollar to get. The two lofts I have bought downtown have been off market and not dealing with everyone and their mom. Find an agent that knows everyone in town and knows whats coming up and can show you the property before it hits the market.
I bought a loft in downtown last year and under contract to buy another one later this month. I will only Airbnb these as thats the way to go if you can. There is some serious money there if you are in an ideal location. I got bored with the month to month SFR stuff.
I have a SFR in St Matthews that is paid off and will not sell until my girls are ready to go to college. Hopefully they dont go to UofL but I wont have to pay for a place if they do. If not, I will sell and pay for their college.
I did not have any issues with Covid and tenants not paying but I will never sign a lease for more than a year and would do month to month after that. You could still evict if the lease was up. I always thought a 2yr lease would be nice but not now.
Buying in this market if listed is not smart. You are competing with first time home buyers who are desperate to find a home and paying over top dollar to get. The two lofts I have bought downtown have been off market and not dealing with everyone and their mom. Find an agent that knows everyone in town and knows whats coming up and can show you the property before it hits the market.
I will second that idea, that is how we found our house in the area we wanted a few years ago during a very hot market (right after the end of the recession), an agent called us, we looked at it the next day, made an offer and bought it the day after, otherwise, would have been gone, baby, gone before we had time to think much about it.
Moral to the story is that agents can be really helpful in super hot markets in buying a property (but the corollary is that I am not sure how much value they add if you can sell it yourself for a really high price without their advice and help and paying 6% for same - many RE agents will disagree with this concept, I know)
Buying destressed properties and upgrading them, to rent or flip is the most profitably way to go. If you don't like to fool with renters, turn everything over to a management company - they normally charge 10% to collect the money, take the ***** calls, locate contractors for services when needed etc.
Been looking for a lake house for years and just had an agent call me about one that will be going up in two weeks. Not even her listing. Going to see it first thing in the morning. If Its something I like, I know I will be paying more than I would have 3 years ago but it could save me $40k not allowing it to hit the market.