Does anyone have rental property?

[blakegill66]

I am looking for some advice from rental property owners. I have some questions about financing and if they profit is worth the headache and hassal. I know a few properties that have potential to provide great side income.

 

[kirby]

I have some (I am in Kansas City now). I am making good money, but they are a headache. If the foreclosure market is still hot down there then it is a great time to get in. I have not been able to find financing on my terms, so cash only for now.

 

[Pas Tout La]

This has been something I have been seriously considering getting into for a while now. Are there any recommendations on literature that may help a newbie tap the market? I have read reviews on several books and they all seem like get rich quick types of books. I would like something that is more realistic.

 

[Xenon]

Make sure you get quotes for R/E tax, liability, flood and homeowners insurances on that specific property. Those are the areas that generally are overlooked in the "profit" analysis. Three of the four are more expensive for a rental than your own home. Make sure that you can pay the note and all of the above for several months if a tenant misses rent and you have to evict, it sits vacant for repairs and then finally re-rental.

Set up an LLC to own the house and maintain a separate bank account for it. Cheap insurance. (I'm not giving legal advice)

 

[gunz4me]

Make sure you get quotes for R/E tax, liability, flood and homeowners insurances on that specific property. Those are the areas that generally are overlooked in the "profit" analysis. Three of the four are more expensive for a rental than your own home. Make sure that you can pay the note and all of the above for several months if a tenant misses rent and you have to evict, it sits vacant for repairs and then finally re-rental.

Set up an LLC to own the house and maintain a separate bank account for it. Cheap insurance. (I'm not giving legal advice)

^^ what he said.

I manage my family's LLC that rents out my deceased grandparents house and farm land. There always seems to be some hidden expense that pops up here and there. First off, they were shocked that they lost the homestead exemption and property taxes are much higher. Homeowner's and flood insurance are no picnic either. Then there was the issue of the damage that the first tenants did to the house where their security deposit covered roughly 1/4 the total of the repair costs.

After managing the family's LLC, it made me realize that I do not want to be a landlord myself. I have a house right down the road from UL Lafayette that is tied up in probate and I have no desires to rent it out. As soon as I get a judgment of possession, it is going on the market!

 

[CEHollier]

PM sent

 

[kirby]

I read a ton of books. Actually one of my favorite is the rich dad poor dad series. I then bought a ton of others. Find a good real estate agent who works with investors all of the time. Definitely set up LLC's. Property taxes and insurance eat up about 1/2 of what I get in rent every month.

Remember that you are here to make money. The worst experience I had was kicking a family with a young child out on the streets. The mother got very nasty and tried to get me to feel guilty.

Edit**
The books are only a primer. I don't agree with anything I have read 100%. Read, digest information and make your own decision.

Only buy a good deal. We look at houses weekly. In an average month I look at over 15 homes with my real estate agent in person. I look at 100's every month on the internet. If you only buy what you know is a good deal it is a lot easier to make money.

 

[crippy02]

For the love of God, screen everyone interested and have a strict lease with a gtfo clause. We did that and make sure we read the lease to our tenants to mak e sure they see it. We also reiterate to them several times that we reserve the ability to tell them to leave at the first hint of trouble. All it takes is a phone call from one of the neighbors and they're gone. So far I've been lucky. Current tenant has been there three years, pays her rent and keeps things low key. She's in the brpd police academy now, so that may have something to do with it. She was a dispatcher for ebrpso when she began renting.

 

[Praesul Presul]

Been involved renting with my dad (out of state) most of life plus been a renter on a few occasions while looking to relocating.

Good advice above.

Get in while it's a buyer's market
Better to get a small apartment complex than a bunch of houses in different places
Get a LLC or Corp
Write/copy a good lease with a good GTFO clause
Remember if you rent to trash you will get trashed
Avoid Section 8
Buy property with the least amount of maintenance (durable building materials, smaller yards, little to paint)
Equipment with easy to replace appliances, flooring, etc
Avoid houses with storage sheds or garages - renters will fill it full of $hit and leave you with it when they leave
Expect to be without tenants for several months and it will only be a couple days
Expect all fuses to blow and all water pipes to begin leaking on a holiday or while you are on an out-of-state vacation
Visit your rental on a regular basis

Finally there are only 3 kinds of renters:
1. Those that can own but don't want to
2. Those that can own but need to rent temporarily
3. Those that can never own so they have to rent

Every bad experience as been #3.

 

[madwabbit]

ive got multiples in a few states. I opted for a few in the same neighborhood actually, and hired a property management company to handle the footwork locally. costs 10% of monthly rent, so I just raised it by another hundred bucks or so. Whomever posted to setup an LLC gave fantastic advice btw.

If you dont have a stash of cash for repairs, uninhabited mortgage, etc- I'd suggest you reconsider.