Posted by Lee in LA on April 29, 2011 at 12:55:03:
?Where are you (or anyone) finding properties where the rents over 2-3 years will cover the purchase price??
I would say 3 to 5 years, 36 to 60 months, point is it?s doable, they are out there.
I am in my early 50’s and looking to build a little retirement income cushion. I’ve been looking at getting into rental properties for a while, but I am nervous.
Posted by Chris in FL on May 09, 2011 at 01:29:16:
Read a few of my posts, and you will see I think it is a great time to buy rentals (in central FL). Prices are low, and rents are high. The ratio is the best I have seen in my 13 years, easily! If you buy right, and rent right, you can easily have positive cash flow from day one… Or, alternatively, pay off property fast. Personally, I bought 10 in the last 12 months. Mostly working class neighborhoods (no ghettos), mostly block, paying $20-30K including fix up, and renting $600-800/month. Buy good houses. Estimate conservatively - figure out your taxes and insurance, count 25% of rent on a decent SFR for vacancy and repair. Rent, minus mortgage (if applicable), minus taxes, insurance, vacancy + repair factor, and is there something left over positive? As far as managing them goes - it has it’s issues, but my experience is, if you put the right people in your homes, not as bad as people make it sound. I manage almost 30, and so part time that I am bored out of my mind when I am not in process of buying, fixing, and renting one… Plus, done right, it makes you so much money, any hassles seem minor compared to getting wealthy! Study your market, buy good homes at good prices, rent right - and go for it! I quit my JOB at 39… Get more wealth and income every year, whether I continue buying or not (paying off houses). One tip - screen applicants, and for best applicant only, go by where they live now without notice - whatever they keep the place like, that is what your house will look like in one year. This step is a huge difference maker!
In 2003 I started buying cheap houses for single family rentals. Now have 34 + a vacation property and 2 commercial properties. Landlording can be a pain, but the income is good. And in 2 or 3 years, mine will be paid off and ------$13,000.00 monthly income less taxes and insurance. It can’t get any better than that.
Posted by Lee in LA on April 26, 2011 at 11:28:17:
Put your toe in the water…
Find an apartment complex owner that will hire you to work on your off hours/ before
or after your regular job. Tell the owner you are an aspiring residential property
owner but need experience.
Do jobs for the complex owner that you will be doing or supervising for yourself as
an owner. Be an information sponge, learn everything: roofing, carpentry,
electrical, plumbing, flooring, painting/ sheetrock finishing, air conditioning and
heating, advertising, building codes, finance, insurance, local state and fed. law,
management, know about mold and lead, how to Buy property Right and taxes.
Or be efficient at hiring the above related trades.
Would you hire You/ (someone like you) if they/ (you) didn’t have the above
experience? I did, in 1978 when I bought my first property, what a ride it has been.
Tolits and Tenants have a way of teaching owners.
Like Max-VA says, We can encourage you and be there for you if you start investing. JT-IN kept it real and I agree that this is hard work.
I believe posting this thread is a good first step for you. I wanted to invest in 1999 and did not buy my first rental until 2002; so I guess your process has begun. I suggest you read all you can and join your local REIA group (Real Estate Investment Assoc) and talk with other aspiring Real Estate Investors. I personally love Real Estate and have a passion for it. As much as it is the Real estate property; I find that having the people skills is very important as well. Dealing with contractors, handymen, attorneys, tenants, banks, secretaries, county clerk workers, etc, etc. is going to require alot of time and effort. Or you can use a Property Manager who you are going to have to interview. All in all if you don’t want to do hard work, you may consider another Investment vehicle. All the best!
DJ-nyc
Then this might not be for you. Rental RE ownership is work, can be emotionally draining at times, especially if you are not cut out for this. So unless you are EAGER to get knee deep into this and KNOW that you will be able to handle some of the CRAPPOLA that will surely happen while owning rentals, then you are best to continue thinking about this and not acting upon the impulse.
I used to own restaurants and bars. Everyone wants to own one or the other because it has an allure to some fantasy they have. When folks would tell me about their fantasy I would listen, chuckle, then bust the heck out of their bubble cause it is nothing like you imagine. Owning rentals is a close second.
Posted by Kristine-CA on April 28, 2011 at 10:47:52:
Hi James. I normally really dislike your hype over low purchase price
houses. There are SO many hidden costs and the tenant pool can be a
big PIA. But there was something about your statement about getting
your capital back in 2-3 years that made me stop and think. My farm
has houses that fit that criteria right now. In fact I’m closing on one
next week and am set to flip it after a few repairs. It’s a 3/2 that would
rent for 900-1000K. Not a war zone. I know the neighborhood well
and have bought and sold lots of stuff there. I’ll be in 25K at closing
and then fix up. I don’t often get cute houses that are 3/2. Your
statement about buying so that you can make the money back in 2-3
years has got me thinking…Thanks, Kristine
You mentioned “safe, smart and easy…options and lease options”.
How and where do you find people receptive to do sell on a lease option deal? I’ve contacted many sellers and landlords but but most are not interested in selling on a lease option deal. Thanks for any insight on this matter.
Posted by Kristine-CA on April 26, 2011 at 20:51:48:
At least there is a little tiny bit of glamour in owning a bar or
restaurant. True that owning one is nothing like you imagine. So much
work, so much drama. But there are some fun times. My Dad’s
restaurant, his get-away fantasy in the woods of No. Michigan, on the
end of a dead end road with a harbor, with his wood stove, his English
Setter, his woman, his fish recipes, his bartending…those were some
good times, in spite of the difficulties, the cash flow, the employee
drama. Now managing his rental props…he never mentions any fun
times with that. Lots of drama, lots of cash flow problems, but not a
lot of fun. My experiencing landlording has been the same. Maybe it’s
a legacy thing?
