Lets chat about the wonderful world of owning rental property

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > Lets chat about the wonderful world of owning rental property

adorai: Nov 2, 2002; 10/27/04 Never forget; Grimey Drawer

necrobobsledder posted:

But my god, $90k for a house that's not condemned? That's barely a 20% down payment in my mind being around nothing but expensive metro areas.

I could pick up a 50 year old 2 bed/1 bath 1200sq foot house in my town for under $50k. It would need work, but not a tremendous amount.

edit: my grandpa was telling me about a 5 bedroom, 3 bath 3000sq foot house built in 1980 that he passed on last year because it was too expensive, at $125k.

# ¿ Oct 15, 2013 23:45

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# ¿ May 4, 2024 02:56

adorai: Nov 2, 2002; 10/27/04 Never forget; Grimey Drawer

Harry posted:

You keep saying this but it doesn't make sense. If interest rates rise (doubt it), house prices will fall.

I don't think it correlates as well as you are implying it will. There are still many cash buyers, and some people who are selling simply aren't able to if home prices fall too much, keeping those properties off the market. I do agree that home prices do move in accordance with rates, but my house isn't going to lose 10% of it's value overnight if interest rates rise by 1% and either are potential investment properties. In fact, some investment properties may even rise in price as potential homeowners are priced out of mortgages and are forced to continue renting.

# ¿ Jan 4, 2014 03:29

adorai: Nov 2, 2002; 10/27/04 Never forget; Grimey Drawer

DNova posted:

I suppose the answer would be so that you can have one LLC per property, but I don't know, this all seems very easy to get around if you are sued by a competent lawyer.

The point is to make it just complicated enough that most lawyers (who are working on a contingency) don't bother taking the case. If I sue some someone who has only $50k in assets, the most I'm realistically going to get is $50k. If the attorney is only taking 1/3 of that, he's "only" getting $16k, which is less tasty than $50k if he knows you have 3 $50k properties.

# ¿ Feb 4, 2014 01:15

adorai: Nov 2, 2002; 10/27/04 Never forget; Grimey Drawer

FISHMANPET posted:

~$15k profit right now or $21 profit a month.

The math looks pretty simple on that one.

Your analysis is poor. It's either:

$15k now

-or-

$21 a month + $15k later

The questions that are actually important to the discussion:

What repairs do you foresee from normal wear and tear in the next X years?
Do you currently have a tenant?
If yes, is the tenant a good tenant?

# ¿ Oct 18, 2014 01:01

adorai: Nov 2, 2002; 10/27/04 Never forget; Grimey Drawer

that lawn looks like they had a dog.

# ¿ Aug 8, 2015 04:19

adorai: Nov 2, 2002; 10/27/04 Never forget; Grimey Drawer

TraderStav posted:

Oh,also just found the handle to the washer inside of it. These people were animals. Everything that you could open or close has damage.

temper tantrums

# ¿ Aug 17, 2015 18:50

adorai: Nov 2, 2002; 10/27/04 Never forget; Grimey Drawer

They have to give some allowances for normal wear and tear on both the refinishing costs and the loss of income at move out. If you assume a normal wood floor (not prefinished) has a finish that will last 15 years between refinishing in a rental, you should pay the difference between when they would have needed to do it and when they have to do it because of you. You should also have to pay for a full replacement if the scratches are so deep that the floor cannot be refinished.

Why do renters always have big rear end dogs? If you are renting and you need a dog, get a yorkie or something.

# ¿ Aug 30, 2015 18:12

adorai: Nov 2, 2002; 10/27/04 Never forget; Grimey Drawer

galahan posted:

I'm going to say it's prefinished. That stuff scratches hella easy.

Prefinished should be significantly more durable than something you sand and finish yourself.

# ¿ Aug 30, 2015 22:11

adorai: Nov 2, 2002; 10/27/04 Never forget; Grimey Drawer

galahan posted:

The 100 year old house wood I've seen is indestructible.

I agree that 100 year old hardwood is extremely durable, but the finish is not.

# ¿ Aug 31, 2015 02:19

adorai: Nov 2, 2002; 10/27/04 Never forget; Grimey Drawer

i would be pissed if a tenant tried to refinish themselves. There is a finite number of refinishings that can be done and if they, as a non professional, took off too much then they have stolen from future refurbishment.

# ¿ Aug 31, 2015 05:16

adorai: Nov 2, 2002; 10/27/04 Never forget; Grimey Drawer

if you have someone who is habitually bad, it is worth it to make it as easy as possible for them to pay. I am not sure if your bank allows it, as not all do, but if you can get a commercial account that allows ach draft, it's easy on the tenant and you know it is going to draw from their account on the specified day.

# ¿ Sep 21, 2015 05:59

adorai: Nov 2, 2002; 10/27/04 Never forget; Grimey Drawer

OmNom posted:

My only recourse with the tenant is to pass the fines on to her, and raise the rent in June so she moves out.

I would like a second opinion or any creative ideas for what to do with the situation.

Why can't you just not sign a new lease? Unless it specifies otherwise, the end of the lease should serve as a duty to vacate, in the absence of a new lease.

Now that I have contributed, I am looking for some advice. I am interested in purchasing some income generating property. What kind of reserves are generally recommending before committing to such a thing? My normal income will easily support a period of vacancy, so I'm really more interested in how you estimate your repairs and such. Obviously there are a lot of factors like age of roof, siding, furnace, etc.. but is there a general rule of thumb for getting started? I was thinking $5k on a $75k property, but I have no idea if I am seriously underestimating this.

# ¿ Sep 6, 2016 04:32

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# ¿ May 4, 2024 02:56

adorai: Nov 2, 2002; 10/27/04 Never forget; Grimey Drawer

TraderStav posted:

A better approach is to allocate a portion of the collected rent to these items.

I do plan to do that, however, I want to seed my maintenance fund and was looking for a guideline for that.

# ¿ Sep 7, 2016 01:00

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > Lets chat about the wonderful world of owning rental property