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How do you guys feel about investing in real estate vs. traditional retirement investing accounts? Those of you voluntarily invested in real estate, are you maxing retirement accounts before getting into these taxable income streams? My wife and I are super interested in real estate, and invest a good portion of our incomes into tax advantaged accounts, maxing our Roths, maxing 401k matches (3 percent for her, 4 percent for 5 on mine, and an additional 2 percent on my account). It seems to me, the more research I do, that about 10 percent returns may be a fair expectation for returns over the long run in real estate, which IS pretty good compared to historical/expected stock returns, and I guess I'm just kind of torn on the advantage of the retirement accounts and diversification opportunities. On the other hand, we are making a killing on airbnb on our primary home (thread in travel subforum, link in title under avatar), I'd like to diversify my daily income with the potential to be my own boss full time in the future, and feel like I have the ability, skill, and knowledge necessary to DEVELOP into a good landlord. Thread has been helpful, so thanks for that. I'm reading a few property investing guides, and any additional recommendations would be appreciated as well.
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Aug 7, 2014 02:19
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Dead Pressed posted:How do you guys feel about investing in real estate vs. traditional retirement investing accounts? Those of you voluntarily invested in real estate, are you maxing retirement accounts before getting into these taxable income streams? Any specific chat about returns is going to be insanely region and market dependent, but I've been getting well north of 25% returns just on a cash on cash basis with financing properties Basically I am recouping my down payment, closing costs, and reno expenses in just over three years. Now the market where I am is insanely landlord friendly. Housing prices are still way down due to a crazy amount of foreclosures still on the market, but rental prices have shot back up to pre to mid bubble levels. My wife and my plan is one more property a year the next five years, then two a year the next five years after that and then from there either quit my full time job and be full time landlords or dial back the acquisition rate and hire a property manager while still working. Huge caveat, children have not yet, but will enter the picture, and I'm certain that will savage those glorious plans of retirement by 40. E: didn't post about retirement funds. I get 11.5% of my income in a 401k through work (6% my own, rest employers) But this isn't maxing the 401k out. I throw 10% of my take home from my job into a taxable investment account and 10% of all proceeds from rentals into the same account. At the end of each year, I figure out if I want to reinvest personal assets into the rental business and then max out the IRA with the remaining funds with the remainder staying in the taxable. The 90% of proceeds from the rentals stay with the business for new acquisitions. Bloody Queef fucked around with this message at 03:42 on Aug 7, 2014 |
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Aug 7, 2014 03:35
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Property is a very capital-intensive process, so if you've got the ability to continue funding retirement accounts in addition to owning property that's a very good idea. If you're diversified enough a bad stock crash will mean you have less money, but a bad housing crash could leave you in a position where you literally can't sell due to being underwater. I wouldn't ever count on it being your only source of income for retirement, but it is a very good thing to have as an income stream as long as you're not overleveraged in it. If you can snowball into owning properties outright very quickly, it's goddamn fabulous.
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Aug 8, 2014 08:25
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Tricky Ed posted:bad housing crash could leave you in a position where you literally can't sell due to being underwater. This is really important and shouldn't be ignored. Know how much your local market tanked in the most recent housing crisis. Some areas were barely effected, some lost half or more of their value. If I was doing income properties in Arizona, I would only buy with cash. I'm in the northeast where markets went up 10-15% during the bubble and then dropped about the same amount. So if I'm insistent on getting a loan, I do 20% down 15 year, so I'd very quickly be in a crash resistant equity position.
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Aug 8, 2014 12:13
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I posted some of my numbers a few posts up. I got into it by accident and I have the same long term goal as you. Rental property management of my own small portfolio. I would recommend paying cash for your property... If the market tanks and you don't have a renter it just adds way too much volatility for my taste and exposes your primary residence to bankruptcy. What I decided to do is I have paid off my own home and I have been investing in non-traded REITS. I still fully fund my 401k and invest in REITS after the 401k. This allows me to build capital outside my retirement accounts and put away money that is getting a return and building towards having enough for a cash property. When I have enough saved I will sell the REITS and buy a property outright. That way if it sits vacant for a few month between renter it is significantly less risky.
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Aug 8, 2014 21:25
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Does anyone have a good off-the-shelf notice to terminate lease that they use? Just looking for something in writing to tell my tenants that they are expected to move out on September 30th as they are on a month-to-month right now and refuse to sign a longer term lease without a decrease in rent. Googling turns up a lot of really forceful sounding language about being evicted and this is already been agreed upon with my tenant. Just need the legal paper in the event that they try to stick around after 9/30. Thanks!
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Aug 18, 2014 19:15
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My sister's boyfriend flips houses, he's contemplating buying a rental and I'm not sure if it's within the realm of possibility or not. The housing market has really picked up since his last flip and he hasn't been able to find a new house, everything is going for too much to make money on. He's been doing some other work in the meantime to generate some income. He would be buying the house cash for around $80k, it's a 2br single family home, and he would do some fixes in the kitchen and bath. Projected rent is $850-900/mo. I don't know what the actual value of the house is, I assume he's buying it below market. I guess his plan would then to get a HELOC on the rental when he would find another place to flip. He does all the work himself so he only does one house at a time (slowly, haha). I ran some numbers and a HELOC for $60k @ 3.25% for 10 years is around $585/mo, so that doesn't really leave much left over for ongoing maintenance / vacancies, etc. On the bright side, he can tackle any maintenance issues that the house has himself (and has the flexibility in his schedule) so upkeep should be less expensive than paying someone to do it. The risk seems like it should be fairly low since it's in a good area and it will be paid for. Edit: More information I guess the deal is close to done. My sister said it's worth around $110k as is, and the seller was going to put it on the market with a realtor for a fast sale for $90k. My sister's boyfriend offered $80k cash no realtors with 2 week close and I guess they have arrived at a verbal deal (the seller is traveling so I dunno when it would happen) at $82k. So given those numbers, does that change anything? It seems if it's worth $110k and he's getting some free equity to borrow against that sounds fairly promising. dreesemonkey fucked around with this message at 18:10 on Aug 19, 2014 |
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Aug 19, 2014 16:55
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http://imgur.com/qWXUj88,ahbELuN I'm a renter, not a owner, but uh: wtf? I have never seen a rat, or a sign of a rat. My dog and cat also seem oblivious to any rat existence. The screens ARE hosed up and the door to the building IS in dire need of some weather stripping, but I don't care too much. The tub is not cracked. The vent fan in the bathroom is very drafty (and the almost 70 year old windows are, uh, slightly) but meh. Do I have to do anything here?  
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Aug 22, 2014 17:55
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gently caress them posted:http://imgur.com/qWXUj88,ahbELuN Give the notice to your landlord. I can't imagine you'd be responsible for anything unless it was due to negligence on your part.
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Aug 22, 2014 18:07
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Update time: Lots happened. In order to buy the apartment we needed to be approved for a loan about 1/3 the purchase price, as well as approved to take over the existing loan from the current owners. Loan 1 approval came through last week. Loan takeover approval came today, so we will be signing any day now. The current renter also called and said he would like to remain, so we already have a tenant paying above what we were estimating. Will post photos after the actual signing is totally done.
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Aug 25, 2014 16:13
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I need help with management software and collecting rent. I currently use LandlordMax, which is ok for tracking and bookkeeping. I have about 20 units, spread over 3 different properties in Yonkers and the Bronx. Most of my tenants don't have internet access or even checking accounts. They prefer to pay cash (which I stopped accepting) or with money orders. I use a management company, but they're doing a subpar job. Collecting rent is awful, just because none of my tenants are home at the same time. I would spend my entire week driving around just to meet tenants to pick up rent. Question: What's the best system to mail self-addressed envelopes to my tenants, telling them what they owe? If they can just drop it in the mail, that'd be fantastic, and I'd just need to meet a few who don't for whatever reason. None of the management systems I've seen can do that. edit: Didn't we used to be able to bookmark threads?
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Aug 31, 2014 03:42
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particle409 posted:I use a management company, but they're doing a subpar job. Hire a competent property management company. Why are you doing all this legwork AND paying for a manager?
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Aug 31, 2014 04:18
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DNova posted:Hire a competent property management company. Why are you doing all this legwork AND paying for a manager? Empty quoting's probably not allowed in a thread like this so here are some words
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Aug 31, 2014 05:33
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particle409 posted:I need help with management software and collecting rent. I currently use LandlordMax, which is ok for tracking and bookkeeping. I have about 20 units, spread over 3 different properties in Yonkers and the Bronx. Most of my tenants don't have internet access or even checking accounts. They prefer to pay cash (which I stopped accepting) or with money orders. I use a management company, but they're doing a subpar job. Collecting rent is awful, just because none of my tenants are home at the same time. I would spend my entire week driving around just to meet tenants to pick up rent. What % is your property management company charging? Unless you're getting some kind of stellar deal, it might be time to look around. With 20 units you may even be able to hire someone part time.
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Aug 31, 2014 12:38
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Years ago I had a place where I could drop off an envelope into the landlord's locked mailbox. I think the reason you are having huge hassles with picking up the rent is because you are picking up the rent. Set a policy that rent checks need to be mailed by X date, no cash (even though it's surprisingly rare cash gets stolen out of the mail) and if they don't, follow your late rent procedures as set out in your rental agreements. People will follow the rules as long as you make it a firm rule and follow your rental agreements.
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Aug 31, 2014 14:22
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n8r posted:Years ago I had a place where I could drop off an envelope into the landlord's locked mailbox. I think the reason you are having huge hassles with picking up the rent is because you are picking up the rent. Set a policy that rent checks need to be mailed by X date, no cash (even though it's surprisingly rare cash gets stolen out of the mail) and if they don't, follow your late rent procedures as set out in your rental agreements. People will follow the rules as long as you make it a firm rule and follow your rental agreements. Did you read his post where he stated that his tenants typically don't have internet or checking accounts? He's kind of dealing with a different situation then is common.
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Aug 31, 2014 14:43
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Bloody Queef posted:Did you read his post where he stated that his tenants typically don't have internet or checking accounts?
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Aug 31, 2014 16:29
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DNova posted:Hire a competent property management company. Why are you doing all this legwork AND paying for a manager? 4%. I've gone through management companies, the reality is that they're not willing to chase down the money like I am. $1,000 in unpaid rent is just $40 to the management company. I have no other job, and would like to make this my primary job. I've found that nobody watches the money like I do. Cicero posted:How is it any different if they use money orders? My tenants need their hands held. A number of them have rent subsidy programs, and won't pay their portion unless it's spelled out for them. I'll have to go through a million evictions a year. That's the bottom line. They need their hands held. My current management company sends out envelopes telling them how much they owe, etc, but they're tight-lipped about what program they use. They think I'll just use it myself and fire them (I would).
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Sep 1, 2014 11:51
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They're expensive, but you can setup a lockbox at a bank. It will have a fixed mailing address, and just send you a list of check images that were received that day. As for the tenants needing their hand held, that's just one of the downsides of taking subsidized housing. It's also why a lot of landlords in that situation just include utilities as part of the rent. As for the property management software, you might want to try this: http://www.yardi.com/markets-we-serve/residential-property-market/single-family-homes-property-management-solution I've used their multifamily solution before, and I'm imagining it's just the same. Probably going to be a bit pricey though. Bloody Queef posted:Did you read his post where he stated that his tenants typically don't have internet or checking accounts? He's kind of dealing with a different situation then is common. This is actually unbelievably common. Even at nice properties, it's rare to have lower than 20% of the people living there paying by money orders. Harry fucked around with this message at 18:30 on Sep 1, 2014 |
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Sep 1, 2014 18:26
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Harry posted:
I wasn't referring to their lack of access to checks, more the type of person who wouldn't have a checking account also wouldn't be the type to pay rent on time without prompting.
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Sep 1, 2014 20:14
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I've been trying to advertise my rental on craigslist (the POS management company I use does not advertise on craigslist for some reason). I use "renew" and I don't see my listing at the top. It should be at top if i check 5 seconds later? I delete and use "repost" and I don't see it at the top either. The only way I can see it at the top, is if I delete it completely and then repost it. Is that the only way?
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Sep 1, 2014 20:14
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CatchrNdRy posted:I've been trying to advertise my rental on craigslist (the POS management company I use does not advertise on craigslist for some reason). Renewing a post doesn't happen instantly for me, usually an hour or so.
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Sep 1, 2014 20:18
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Bloody Queef posted:Renewing a post doesn't happen instantly for me, usually an hour or so. thanks, i thought perhaps it was all some big trick
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Sep 1, 2014 20:22
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What do you guys use for a rental application? I need something that includes whatever consent language about a background and credit check.
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Sep 17, 2014 16:20
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Dragyn posted:What do you guys use for a rental application? I need something that includes whatever consent language about a background and credit check. http://www.residentresearch.com/Rental%20Application.pdf
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Sep 17, 2014 22:17
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Nice, thank you!
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Sep 18, 2014 14:33
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dreesemonkey posted:Stuff -- HELOC Typically you can't get a HELOC for 6 months - 1 year after you buy a property due to "seasoning" requirements. It's also harder to get one on investment real estate - even if you do get one, it likely won't be at prime rate (3.25%) as you calculated.
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Sep 30, 2014 04:39
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What is the most effective means of advertising an open rental unit these days? I've had pretty good luck keeping the small number of units I have occupied but now I have an opening and I feel like putting ads in the newspaper is bush league these days (especially our dinglef*ck local paper).
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Sep 30, 2014 13:48
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ShaqDiesel posted:What is the most effective means of advertising an open rental unit these days? I've had pretty good luck keeping the small number of units I have occupied but now I have an opening and I feel like putting ads in the newspaper is bush league these days (especially our dinglef*ck local paper). I have only had success with craigslist. I just keep the ad up in the top by reposting and I've always had tons of respondents. I'm sure that my pool is being limited to 20-35 year olds or tech savvy older folks, which doesn't match the demographics of the area well, but it's worked so far.
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Sep 30, 2014 15:00
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Bloody Queef posted:I have only had success with craigslist. I just keep the ad up in the top by reposting and I've always had tons of respondents. I'm sure that my pool is being limited to 20-35 year olds or tech savvy older folks, which doesn't match the demographics of the area well, but it's worked so far. We've done this as well and it was worked out reasonably well so far.
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Sep 30, 2014 15:36
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ifuckedjesus posted:Typically you can't get a HELOC for 6 months - 1 year after you buy a property due to "seasoning" requirements. It's also harder to get one on investment real estate - even if you do get one, it likely won't be at prime rate (3.25%) as you calculated. Assuming they do their due diligence confirming it's not an empty shell of a house or something, you'd think they'd jump at the chance to loan money against a paid-for property. But I dunno. He ended up buying the house, is in the process of doing a kitchen remodel, and is looking to rent the house. The house is in fantastic shape, just needs some updating and landscaping. If renting it doesn't work he'll have no problem selling it off, cute house in a great area.
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Oct 1, 2014 20:36
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ShaqDiesel posted:What is the most effective means of advertising an open rental unit these days? I've had pretty good luck keeping the small number of units I have occupied but now I have an opening and I feel like putting ads in the newspaper is bush league these days (especially our dinglef*ck local paper). Craigslist and postlets, which will automatically put your listing on a big network of sites including trulia and zillow. My rental leads came about 50/50 from the two.
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Oct 10, 2014 01:03
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Considering getting a property manager to rent out my house for the next half year or so. Thoughts on how to get a decent property manager?
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Oct 10, 2014 19:42
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moana posted:Considering getting a property manager to rent out my house for the next half year or so. Thoughts on how to get a decent property manager? If it's only 6 months why can't you do it yourself? Expect to pay something like a month's rent signing fee plus 10-12% of monthly rent depending upon the level of service you want. The real answer to how to find a good property management company is to start one yourself but if you are forced by circumstances to use one I'd just shop around as much as possible.
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Oct 12, 2014 20:44
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I don't want to do it myself, managing renters sucks rear end. I just don't want to sell until I know for sure I want to move, which is why for such a short period of time. Just was wondering if there were any common questions I should be asking.
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Oct 12, 2014 21:07
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moana posted:I don't want to do it myself, managing renters sucks rear end. I just don't want to sell until I know for sure I want to move, which is why for such a short period of time. Just was wondering if there were any common questions I should be asking. I'm just saying if it's only for six months you are going to pay out your nose for a small convenience that doesn't really save you from any of the rear end sucking parts of managing renters, such as them not paying rent or expensive stuff breaking that will still be entirely your problem except for the phone calls even if you have a management company. If you insist, the first question should be "are you willing to handle a one-time only six month lease" and after that you need to know leasing fees, advertising fees, rent collection fees, how they handle maintenance/repairs/lockouts (e.g. do they have a full-time staffer on call 24/7, is there a dollar value of repair they will just do and bill you for, etc) BEHOLD: MY CAPE fucked around with this message at 23:39 on Oct 12, 2014 |
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Oct 12, 2014 23:37
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I'm considering selling a property due to lack of profitability and wondered what you guys think. Some monthly numbers: Property tax 69 Insurance 19 Utilities 70 Mortgage 261 (I owe about $18 K outright currently and could pay it off in about 10 years) Vacancy 10% 40* Repairs 5% 20* Total expenses 479 * Standard percentages I found online. I think I could charge upwards of $500/month rent but I don't think much more in the area. It's a small single unit home with two bedrooms (one is very small though) and one bath. So right now I can either sell it and make a small profit (which could possibly be spent on a more worthwhile property) or tough it out until house is paid off. Your thoughts?
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Oct 14, 2014 13:51
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ShaqDiesel posted:I'm considering selling a property due to lack of profitability and wondered what you guys think. Some monthly numbers: How much do you think you could sell it for? The economics of that property are pretty lovely from a rental perspective.
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Oct 14, 2014 15:24
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Bloody Queef posted:How much do you think you could sell it for? The economics of that property are pretty lovely from a rental perspective. Maybe $35K (local market is cheap anyway and this place, while not a dump, is not really what most families would be looking for). I agree with you re: shittiness - I think multi-unit or higher end single units are the way to go around these parts.
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Oct 14, 2014 15:35
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~$15k profit right now or $21 profit a month. The math looks pretty simple on that one.
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Oct 14, 2014 15:38
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