Posted by JPiper on February 12, 2001 at 24:23:17:
Just a quick comment. If that’s the gross rent you’re talking about (the $20K) that is really low. I make that to be about $2500 per house on each of 8 houses per year…or about $200 per month. I can’t think of anywhere in my city where a guy can rent a house for $200 per month…not even in the really bad areas. And it’s not like my area is the highest price area of the country either.
I’d start by checking around your area to see what the rents are. If I’m not missing my guess your rents are way too low. How about going on a campaigne to raise those rents, perhaps to some inexpensive fixups to help with justifying.
Then look around and see what your next move is when you’ve got some additional income coming in. I have to wonder where you couldn’t increase your gross rental income by at least 50% given some effort.
I’m unemployed. I have 8 rental homes which are paid for free and clear. I bring in about 20k yearly in rents. Besides my wifes 15k per year income thats all we’ve got.
Should I borrow against the rentals to buy more rentals?
I’m pretty conservative and have always done all the maintenance on the homes.
Posted by phil fernandez on February 12, 2001 at 08:44:31:
Rick,
I agree with JPiper below. Your rents seem very very low. I would also go on a campaign as Jim suggests and start raising these rents to market value. Check around and see what similar houses are renting for.
With 8 free and clear houses rented at market rents, I could live off of the cashflow.
After you get all of your rents bumped up to where they should be, let’s call this stage 1, then you could proceed to stage 2 and refi some of them to pull some tax free money out to invest in more properties.