Rental Properties?

J-Peffer

Do any of you have rental properties?

I actually had 10 units prior to starting a construction company and am really finding them to be a pain.

They show profit, but take a lot of work to maintain, work that you are doing for free for equidy.

I know a few property investors, they are in there late 50's and early 60's. Both have over a million dollars in properties.

Problem is, if they want to retire....they can't extract that equidy, or near what it is "worth".

I'm starting to think about just getting out while I can. I've always though it was perfect as I can do all the work for fillin work for the company. But I'm starting to think it's better to only do it if you come across that "killer deal" where you go in, then get out with some cash in your pocket.

Would love to hear some others insight on this, and/or experinces.

Thanks for any advice.

wyoming 1

That killer deal you are refereing to is guys in your situation: market gets tight and when everyone else is jumping out other guys are jumping in at say $0.50 on the dollar wait till the market turns around and housing is through the roof and sell off and start again. I would hang in there (if possible ) till things turn around then sell. just my 2 cents

ryanh

I got 2 rental properties, the rent covers both the mortgage/insuance and leaves a tad left for repairs/maintance . I usually end up paying out my pocket but i guess it add's equity. If i didn't get a good deal on the propertys i wouldn't get them, 5 more years and they should be paid off. Not sure if i'm going to keep them or sell em off

J-Peffer

The market is tight, But I don't have a problem at all with finding tenants. It's constant in and out with tenants though to keep them paying. I'm going to court to collect. After they are out, I'm painting, replacing flooring, ext ext ext.

Sure, I can chase the money it takes to do the repairs, but that takes time as well. Every day I'm doing that, I'm not out working my trade and I'm loosing $600-$1000 a day for the company. I can hire a manager, but I'd have to pay them to manage the property full time, not just when I need them.

I'm single, so I can't pawn off some of the filing and paper work on a wife.

I'll have 6 units paid off in 6 years. But even then, all that happens is I don't have a mortgage. I get to keep the 2 payments ever month totaling $800. I still have to pay Property Taxes, Insurance, Water Bills, Maintinance and manage the properties as well.

It's not that I can't come out ahead or the market is killing me, it's that I can make more money off my company. I think at this point I can also invest into my company and it's easier to sell a profitable company than try to extract the equidy out of your homes. It would also be easier to find a full time manager for the company compared to hiring a property manager.

I guess I just have to see how the market goes and go from there.

Mike Finley

J it sounds like you should think about buying properties in better areas.

I buy crap ass run down foreclosures that need everything in great locations, so I gut them out and rebuild them bullet proof, lots of tile, epoxy grout, all new high quality plumbing fixtures, new high quality toilets... etc...

In order to get good properties in great locations you can't do them no money down or on a shoe string, I usually invest about 40K in cash on everyone I purchase.

Then I market them with rents a bit below the norm which gives me a ton of people to choose from, I take my pick of the litter with huge ass secrurity deposits. The last one I just finished and rented the rent is $1250 a month and the security deposit they had to come up with was $2200. 1 year lease. They got the same talk they all get. "Look, I'm just the retantal agent. I'm on your side, but I want to warn you, the owners of this place have a lot of rentals and they are crazy ass ridiculous about the rent. One day late and they are telliing me to send the eviction notice. So no matter what you do, make sure you don't ever be late with the rent. They are very fair and take care of the properties, if you have a problem with anything you just call me and I will have it taken care of, but just for your own good, I just want to warn you, don't ever be late with the rent, the owners are freak'n crazy about that."

The renter went on vacation at the end of her 1st month and sent the rent check in 2 weeks early and called me to make sure the owner's had gotten it.

I have one place coming due next month, two older sisters live there they pay like clockwork, early every month with the rent, never a peep from them ever. I gave them the option of a 5% rent increase for their renewal for a year or a 2 year lease with no increase. They locked in for another 2 years.

As you can see there is a lot you can do to make your life easier. I've found that most people who do this create almost all of their problems.

They own properties in crappy sections of town and they have crappy tenants because they need a maxed out rent payment to make the mortgage and they have to take what comes their way, they take tiny security deposits and it goes on and on and on...

rbsremodeling

Wow Highend rent at 1250 a month. 1250 would get you a parking space here. I need to move where your at

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Mike Finley

Not highend at all.

It's all relative to location. Less than 10 miles in one direction and that property would rent for $500 a month, less than 10 miles in another direction and it would rent for $5000 a month.

It's no different then where you are, I've driven the neighborhoods of DC, you wouldn't say there is no difference in prices between SE DC and NW DC?

rbsremodeling

Big time differences. I get the drift.

It is funny how that happens. The houses here are almost identical in general appearance and size. Funny how much difference the zip code makes

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tgeb

I would drive the 20 miles to save $4,500 a month, especially with the heavy traffic in Co.

Can't find that kind of difference here.....well maybe on the high end stuff. I stand corrected.

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Tom

www.gebcon.com

K2

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I've had rentals for a long time and everyone seems to want what i have except me. The only good thing I have to say about rentals is that when the property values are down the rents can be up and when the rents go to crap the property value can be up. Let's see if there is anything else i can say good about rentals......times up, nothing... The money's ok, the exposure to suits is great, general pita. But, i don't think now is the time to sell if you can stand them for a little longer.