| Author | Message | ||
| rick catalano (Tatcat)
New member Username: Tatcat Post Number: 39 Registered: 9-2001 |
rentals can't be dabbled in. you must do it a professional. do your homework. do it like a job. its not fun but if done properly it can be rewarding. starting out its best to do the shared house.and go on from there. its not rocket science. just hard work and it doesn't hurt to be lucky. | ||
| magoo (Magoo)
Advanced Member Username: Magoo Post Number: 2686 Registered: 2-2001 |
The best way is to buy real estate and live in it as you make the improvements. Then sell it on the open market. That way you don't have someone tearing your house apart and the constant aggravation of trying to get the rent money. | ||
| Ron Thomas (Ronsupercar)
New member Username: Ronsupercar Post Number: 11 Registered: 5-2002 |
I live in FLa. and own a two family house in N.Y. and I always recommend that you purchase property where you live so you can keep an eye on it. I am very luck that I have EXCELLENT tenents that take care of my home. In order to keep them planted, they pay $300 less than what other may charge in the area..I make a couple of dollars for my wife to buy shoes and the house is taking care of itself. I would say to look into some property that need alittle TLC and you can turn over for a profit.I feel that is much better that dealing with bad tenants that know the courts are for them. Quick story - A friend had a tenant that just decided not to pay rent..I took him a year of courts and legal fees to get him out. keep in mind no rent coming in plus a mortgage to pay and attny fees.. NOT WORTH IT | ||
| Willis Huang (Willis360)
Member Username: Willis360 Post Number: 670 Registered: 8-2001 |
You have to remember that the members of this site live in different areas with widely varied local economic situations. What works in one probably will not work in yours. Commercial properties, especially office buildings, just sucks here in the Seattle area. The big bucks were made by the developers and the banks selling the properties initially. Secondary owners get left holding the bag (tech bust, high vacancy rate, low lease rates). But as risks goes, residential is the safest bet. Everyone need a place to live, right? | ||
| Mitchell L. Davidson (Jussumfastgi)
New member Username: Jussumfastgi Post Number: 18 Registered: 4-2002 |
I see commercial properties as much more risky than residential. I might be wrong, but that is just what I have seen. What kind of fees should I expect to pay out to a property management firm? What exactly do they handle? (I assume this varies greatly) | ||
| bruce wellington (Bws88tr)
Junior Member Username: Bws88tr Post Number: 199 Registered: 4-2002 |
tim...lol bruce | ||
| DAVE SHEARS (Daveshears)
New member Username: Daveshears Post Number: 18 Registered: 3-2001 |
Real estate is a wonderful vehicle for appreciation and can enable you to retire at a young age. | ||
| Tim N (Timn88)
Member Username: Timn88 Post Number: 851 Registered: 6-2001 |
Some italians do very well in the waste management business too, you might want to try that. | ||
| bruce wellington (Bws88tr)
Junior Member Username: Bws88tr Post Number: 198 Registered: 4-2002 |
I STILL SAY GIVE YOUR MONEY TO THE "BADA BING BOYS" 20 %, NO QUESTIONS ASKED..  | ||
| Chris Richardson (Boozy)
Junior Member Username: Boozy Post Number: 141 Registered: 11-2001 |
My family has done very well with oceanfront rentals at the beach in St. Augustine Florida. When you buy in a managed community they take care of everything so you don't have to worry about it. You won't make a killing on the rental income but they appreciate well, they're a great tax write off, and you can use them personally some of the year. | ||
| Martin (Miami348ts)
Intermediate Member Username: Miami348ts Post Number: 2051 Registered: 5-2001 |
why limit yourself to residential property? I made a killing in office/commercial properties. Office space and warehosues are great investment. Retail if in a decent location and good priced. My residential properties are mainly condos. easy because they are maintained by the association and if priced right will make you some money, besides that they apprechiate in value. | ||
| Najib Amanullah (Najib)
Junior Member Username: Najib Post Number: 117 Registered: 4-2001 |
In my opinion it is probably one of the easiest ways to make serious profits provided one takes the view that you have to spend some to make some. Keep your tenants happy (within reason) and there should not be much of a problem. Always use a professional agent to verify references etc. Also, assuming you borrow say 2/3 of the purchase price, with a relatively small increase in the price of property, say 8%, you get 24% on your investment plus any surplus rental income. Can't be bad. Just remember, timing is everything. Try not to buy at the top with high gearing or you will really get stung when interest rates go up and everyone wants to off-load. And just to keep BretM happy...I've let property to very nice Italian tenants as well!!! | ||
| James H. (Jamesh)
Junior Member Username: Jamesh Post Number: 59 Registered: 5-2001 |
Mitchell, just as Dave mention, ask the perspective tenant for the name of prior landlords. Its true that his last landlord would give a good referance cuz he wants to get rid of them so go back as far as you can. Not all rentals are horror stories but it can happen even if you do all the right thing. As for paying a real estate company to manage the property, that is also not a sure thing. We had Cauldwell Banker manage a house in Lake Tahoe and they rented it to kids working at Mcdonalds. The house and all the furniture was destroyed. They also stopped paying rent and had to evict them. On the positive note, our duplex rental in San Francisco has had no problems. Last vacancy we had over 30 applications and almost all of them seem to be good prospective tenants. We ended up renting to college students and their parents co sign for them. You can always do what I do in selecting a new tenant. I just pick the prettiest one. That way when they call to have something fixed, I dont mind going over to fix it.(ONLY KIDDING) | ||
| Jeff Whitley (Phuket_jeff)
New member Username: Phuket_jeff Post Number: 5 Registered: 4-2002 |
Have you looked at commercial property? I have had the same tenants leasing from me for 12 years and from day 1 it was a positive cash flow business. The best thing to do is find projects/units that pencil out financially. If you do it right you can have your loan paid off over 10 years with the tenants paying your mortgage. Not to mention depreciation write-off's for tax purposes, appreciation of the property over the years etc. | ||
| djmonk (Davem)
New member Username: Davem Post Number: 30 Registered: 1-2002 |
I purchased a multi-family to live in as first home. Very glad i did too, after renting a few places in town to be closer to my buisness, realized there was a huge demand for nicer places to live for renter's. I took my time looking but bought a neglected house in best part of town{high on hill with great waterviews}. Spent money to get the best bang for the buck to make it look upscale. Prospective tenants fell in love with the view an i had my pick of the litter. After i moved to my own house i kept it with minimal time involvement on my part. Each tenant did maint. as far as one took care of yard, other the snow. Lease stipulates any repair under 25 they fix don't call me. Usually the tenants become friendly an when time to move i ask the other tenant to find his next neighbor {hey they got to live with them not me} for that i give them $ 50 off next months rent an i would save a ton of time an money off interviewing. It always worked well, of course i then approved them. I charged slightly less than going rate so to have quality tenant's who appreciated it. Would check lot of referances going back to landlord before the last in case current landlord wants to unload a loser on me. Lastly multi's should have much better cash flow but typically have slower appreciation in value. I sold house this summer an 3 appraisals i recieved were all over the place, highest one was for an owner to rent out other half scenario as opposed to a pure invester type. Waited for right buyer an got the high bid. Luckily my biz is strong an expanding but i will do more. | ||
| wm hart (Whart)
Member Username: Whart Post Number: 251 Registered: 12-2001 |
Clearly a relevant topic, since it creates wealth, and you all know what money can buy (yes, indeedy). My wife (a very smart business person) and i have recently turned our focus to real estate, mainly because we have done really well on our purchases of primary residences, seem to have the vision to look at a dumpy or neglected property and have some creative ideas to improve the places we have owned so far, without massive construction. Having said that, we are put off by the residential rental market cause it would seem to be no end of headaches, managing, dealing with residential tenants, etc. While there may be some value in watching the property appreciate, and leveraging that for more investments, it strikes me that the rental income v cost of money thing is not the quickest way to make the dough, but instead, by flipping more significant residential properties. Having said that, i don't have a clue on commercial real estate, and would invite feedback. Gracias. | ||
| BretM (Bretm)
Advanced Member Username: Bretm Post Number: 2534 Registered: 2-2001 |
Bust a lot of knees....I mean come on, this is an Italian website. | ||
| Greg Rodgers (Joechristmas)
Member Username: Joechristmas Post Number: 263 Registered: 3-2001 |
Some of you have been successful renting units/homes. What is the key and how is it done correctly so you see positive cash flow? Everytime I have seen rentals in my family they haven't been to positive. Many break their lease early or don't pay the rent. When they would leave the house would be wrecked etc. When they were taken to court we won the judgement but he didn't have a job and then filed bank. I am curious to know the best way to handle rentals. The more detailed the better. Thanks for the advice. | ||
| Alex Lee (Alxlee)
New member Username: Alxlee Post Number: 11 Registered: 4-2002 |
At one time we also had a single family house rented out. Screening was done through a local RE agent and all seemed well. We should have let them manage the property, but because the previous renters had been ideal customers (they even asked permission to put up a rope swing for their kids!), we thought we could handle it. Were we wrong! Even with the right screening it turned out we rented to the wrong people. Sure the wife was a teacher and husband had a good job, two kids no big deal. They stopped paying rent after about six months and by the time we could evict them we lost out on about six months of rent. Not to mention that the police had raided the place once or twice after the brother moved in and did who knows what in the place. (Police found stolen property among other things) Just be sure to screen carefully and really, let the pro's handle the managing if you have no experience. | ||
| Mitchell L. Davidson (Jussumfastgi)
New member Username: Jussumfastgi Post Number: 14 Registered: 4-2002 |
James, how do you screen your renters? Typically I run a credit check before I enter into a contract with anyone and that typically gives me an idea as to the persons willingness to pay. What other measures have you found work (or don't work) I am leaning more towards multi unit buildings and or duplexes.. | ||
| James H. (Jamesh)
Junior Member Username: Jamesh Post Number: 58 Registered: 5-2001 |
I agree with Frederick. I look at this site as also a type of social club/chat site. Its nice to be able to chat about other things and to get advise from others. My suggestion to Mitchell is stay away from cities that have rent control and always check the perspective tenants referances. If a tenant chooses not to pay rent, it can take up to 3 to 4 months to evict them not to mention the legal cost. | ||
| Martin (Miami348ts)
Intermediate Member Username: Miami348ts Post Number: 2044 Registered: 5-2001 |
Multi Units. Single Family mostly does not make the same return! What I think you asked? ...it made me a millionaire in less than 4 years! | ||
| Mitchell L. Davidson (Jussumfastgi)
New member Username: Jussumfastgi Post Number: 13 Registered: 4-2002 |
If it helps a lot of the would be profit from these investments would go to Ferrari purchases and maintenance. haha! | ||
| Frederick Thomas (Fred)
Member Username: Fred Post Number: 441 Registered: 2-2001 |
Yes this is Ferrari chat..but it is also a "Ferrari community" and I think a lot of us have come to value the opinions of the people on this board. I don't think it's a big deal to ask for their advice on other subjects. | ||
| bruce wellington (Bws88tr)
Junior Member Username: Bws88tr Post Number: 185 Registered: 4-2002 |
MITCH IM A BUSINESS OWNER ALSO AND I DO AGREE WITH DR MARTIN AS PUTTING ALL YOUR ENERGIES TOWARDS WHAT YOU KNOW BEST..I DID REAL ESTATE, BEEN THERE, DONE THAT.. NOT FOR ME ANYMORE.. GOOD LOOK IN YOUR ENDEVOURS | ||
| Mitchell L. Davidson (Jussumfastgi)
New member Username: Jussumfastgi Post Number: 12 Registered: 4-2002 |
Bruce, I am a web designer and a business owner. I do quite well, but am looking to expand into something that can build and expand a little better than my company. | ||
| Willis Huang (Willis360)
Member Username: Willis360 Post Number: 666 Registered: 8-2001 |
Owned condos, rental house here in the Seattle area as well as an apartment complex in CA. Sold them off as the markets peaked and management issues becoming problematic. For just starting out, condos might be the way to go. Small rental houses are fine too. I didn't have much tenant issues for about a decade. But for some reason, during the last 2 years of my ownership, the tenants started to make some demands (some quite unreasonable). In some areas, the county or city might demand that you make expensive changes or updates so you'd be compliant with new ordinances (can you say "sticker shock"?). All my properties were professionally managed and kept in top condition. You'd need to fiddle with your finances to make the cashflow work. Also, it's not necessary to buy in the best neighborhoods. A friend of mine made a ton when the urban renewal came around his area and sold his properties to young professionals during the tech boom. | ||
| Terry Springer (Tspringer)
New member Username: Tspringer Post Number: 35 Registered: 4-2002 |
I have done well with Rental property, though I dont own a ton. I do hope to add additional properties this year however. I have single family residences. Location is important, but I think price is equally or more important. I prefer somewhat run-down but cheap homes located in an area where property values are starting to increase due to the proximity of the major city. In my case, that means areas relativly close to downtown Atlanta. I like homes that are older, need some cosmetic repairs and cost less than $80K. Usually, I rent them as is cheap. Getting a property approved with HUD for section 8 renting is great. Then, you are guaranteed 80% of the rent amount from HUD and the tenant only pays 20%. If you can rent the home for enough that 80% covers all your costs and still leaves some net then you cannot lose. Renting cheaper homes there are more potential tenants and repairs are not as big of an issue. If the home is something of a dump to begin with, the tenants are less likely to do expensive damage... If you also can rent the home for $100 - $150 less per month than other comperable properties you can have tenants who will do their own maintenance and not risk losing the home. I have had great luck like this. I have one home that I have not seen in 3 years and the rent is always paid on time or only a couple of weeks late. Perhaps I could rent it for more per month, but I would rather have good tenants who take care of all the problems themselves. As urban sprawl gets worse, many of these kinds of areas are being "reclaimed". Developers will purchase all of the homes in an older community, bulldoze them and built newer homes to sell for big bucks to professionals tired of commuting for 2 hours a day from the suburbs. I am buying older homes and renting while property values increase due to this phenomenon. This is where picking the right location is key. Your not looking for todays trendy hotspot.... your looking for the area that will be hot 8 - 10 years from now. While doing this type of investing is not rocket science, I am in the Mortgage business and thus have experience and knowledge of buying real estate. Just make sure before you close on a property you know exactly what your getting and what kind of rental income it can generate. Terry | ||
| Russ Fairbanks (Russf)
New member Username: Russf Post Number: 28 Registered: 3-2002 |
As a newguy I am sure that many will think that I do not have enough time in to make the following observation which is. This is a Ferrari website not a website to discuss real estate deals, who you are, how did you become successfull etc. If I am wrong then this is really an anything goes website. | ||
| bruce wellington (Bws88tr)
Junior Member Username: Bws88tr Post Number: 184 Registered: 4-2002 |
MIKE EVER WATCH THE SOPRANOS?? BRUCE | ||
| ross koller (Ross)
New member Username: Ross Post Number: 50 Registered: 3-2002 |
personally i love real estate. have not experienced multi tenant properties, only single family apartments and houses. most of the time i use an agent to deal with all the bs and bother. they take their cut but it avoids you having to lose sleep or temper. i don't have any tremendous pearls of wisdom but will offer this: the old saw about location is absolutely true, you need to own where others want to be. period. on a rental basis, you need to locate in a place where there is a reasonably affluent but mostly transient population. that gives you the right mix of people who can afford to pay (and therefore actually do), and won't buy for themselves. examples of this would be nyc, boston back bay, chicago waterfront area, san francisco etc. stay away from areas where the developers can just keep on building because you will get no appreciation. don't buy into strip malls, or other retail space, unless its in one of those cities again. in the ned you also need to like dealing with this sort of thing - if you liked playing monopoly as a kid you will enjoy playing with real estate. | ||
| Michael N. (Man90tr)
Member Username: Man90tr Post Number: 507 Registered: 4-2001 |
Bruce, Who the Bada Bing boys? | ||
| bruce wellington (Bws88tr)
Junior Member Username: Bws88tr Post Number: 183 Registered: 4-2002 |
MITCHELL WHAT DO YOU DO FOR A LIVING?? | ||
| martin J weiner,M.D. (Mw360)
Member Username: Mw360 Post Number: 383 Registered: 5-2001 |
Did it-just not worth all the headaches. Only endeavor I made real bucks is what I knew best (practice of Medicine)My advice is put your energies into what you do for a living. | ||
| Ken Thomas (Future328driver)
Junior Member Username: Future328driver Post Number: 102 Registered: 12-2001 |
I am a tenant and not a landlord, but in my mind, the bigest thing for a landlord is to understand their legal obligations to their tenants - including maintenance, quiet enjoyment, contructive eviction, etc... There are a lot of good books out there that describe the obligations in easy language (ie non-legalese). | ||
| bruce wellington (Bws88tr)
Junior Member Username: Bws88tr Post Number: 181 Registered: 4-2002 |
MITCH MY EXPERIENCE AS BEING A LANDLORD IS POOR. GOT OUT OF IT, SOLD ALL MY PROPERTIES, PROBLEMS WITH LEAKS, DAMAGE TO YOUR BLGDS, PHONE CALLS AT 2 IN THE MORNING, RENTS NOT BEING ON TIME.. I PUT MY MONEY ON THE STREETS WITH THE BADA BING BOYS AND GETTING 20% ON MY RETURNS...MY 2 CENTS BRUCE | ||
| Mitchell L. Davidson (Jussumfastgi)
New member Username: Jussumfastgi Post Number: 11 Registered: 4-2002 |
I am thinking of investing in a few rental homes in an attempt to gain a bit of net worth over the next few years. What better group of people to ask? What issues have you delt with, and what have you found works best for you? Multi unit or single family etc. Thank you for you valuable advice. |