Landlords

[68 Valiant]

Does anyone own rental property. It seems like a great investment but with alot of headaches. Does anyone have any experience? I'd like to know what experienced landlords figure for vacancy rates and typical expenses (damages) that are incurred. I'm still on the fence about buying because I am usually gone 6 months of the year and would be driven nuts with people calling to have me change light bulbs or something else petty.

[milner351]

Re: Landlords

This subject has been gone through before here but I can't recall the thread heading.

Turk has done a bunch of this, my wife and I have six, being gone as much as you are - you will certainly need a trusted person to handle things when you are gone.

Our leases include a clause that states the tenant will be responsible for the first $75 of any repair on the property - and they are responsible for all "maintenance" which includes lawn mowing, hedge trimming, gutter cleaning, snow shoveling, etc. - it also states they are responsible for "routine maintenance" items such as furnace filters, light bulbs, etc.

We do credit checks on all prospective tenants and don't sign leases shorter than a year - your gut is your best guide of character - strong work history is a plus.

You make money on this over the long haul - but buying is where you set yourself up for success or failure - in todays' economy - you can buy solid homes that don't need a ton of work for great prices - without a ton down -

Look at everything on a CASHFLOW basis - and don't forget to adjust property taxes for 0% homestead - it's quite a bit higher than if it was your principle residence.

If you can get a good realtor and lawyer on your side with experience in this business - it will save you a TON of headaches - having a GOOD accountant goes a long way too! we haven't done our own taxes in years.

[SuperBuickGuy]

Re: Landlords

Milner - not picking on you; but your post illustrates a good point - which is to make sure what you do is legal in your state.

In Washington:
You can't charge for maintenance items nor force them to spend money on anything more than light bulbs.

You can have leases for longer then a year, but they must be acknowleged (notarized). I never recommend a longer-than 364 day lease - especially in Seattle where that grants the tenant basic of homeowner rights without the responsibilities.

Do credit checks, Do call references, DO TRUST YOUR GUT, get a first/last plus deposit (don't spend the deposit, but it in a trust account), and keep in mind that over the long haul (10+ years), most properties, on average, are rented for 10 out of 12 months - even for long term rentals.... on top of that, budget at least 10% of the rental rate for upkeep, repairs, and refurbishment....

[SpiderGearsMan]

Re: Landlords

ahhh wealth is a beee-you teee ful thing

[SuperBuickGuy]

Re: Landlords

Spidey..... the latest 'craze' for investing is parents using their 401k plans to loan their children money to buy a house. It's good because it gives the parents a greater return then any 401k... bad, well, there's zillions of reasons (job security for me?)... anyway - the point is: it isn't the rich who are doing it; most anyone who has been faithfully investing in their 401ks for 20 years has more than enough money in it to do such a thing. Rentals can be used as the same vehicle, especially with current market conditions in some of the more desireable locations.

[SpiderGearsMan]

Re: Landlords

workers of the world unite
my current landlord is great - previous landlords were insane maniacs

[Aircooled]

Re: Landlords

My wife and I are having a string of bad experiences with the two houses we've had for the last 3 years. 4 evictions, and 1 runaway out of 6 tenants.
After 5 years of the banks handing out loans to anyone with a pulse, the quality of the remaining renters is really, really low.
We check credit and references, but ALL of them are bad. So we take a chance on the least bad... and get burned.
My parents never had this much trouble with their rentals 30 years ago.
Seriously, what kind of person chooses to buy a new flat screen TV instead of paying their rent?
Apparently 4 out of 6 renters do...
rant off
I wish you luck.

[oldsman71]

Re: Landlords

My wife and I are having a string of bad experiences with the two houses we've had for the last 3 years. 4 evictions, and 1 runaway out of 6 tenants.
After 5 years of the banks handing out loans to anyone with a pulse, the quality of the remaining renters is really, really low.
We check credit and references, but ALL of them are bad. So we take a chance on the least bad... and get burned.
My parents never had this much trouble with their rentals 30 years ago.
Seriously, what kind of person chooses to buy a new flat screen TV instead of paying their rent?
Apparently 4 out of 6 renters do...
rant off
I wish you luck.

at the trailer park it seems to be beer, cigs, and McDanolds
befor the rent. alot of these folks get in trouble with weekly pay / rent to own crap places!

[68 Valiant]

Re: Landlords

My wife and I are having a string of bad experiences with the two houses we've had for the last 3 years. 4 evictions, and 1 runaway out of 6 tenants.
After 5 years of the banks handing out loans to anyone with a pulse, the quality of the remaining renters is really, really low.
We check credit and references, but ALL of them are bad. So we take a chance on the least bad... and get burned.
My parents never had this much trouble with their rentals 30 years ago.
Seriously, what kind of person chooses to buy a new flat screen TV instead of paying their rent?
Apparently 4 out of 6 renters do...
rant off
I wish you luck.

See that's the kind of stuff that worries me! Also the stuff I won't have time to deal with. It can go the other way though my friend has rented the same place for 5 years. Keeps it clean, pays his rent on time, and does the repairs. I was thinking of buying near the college. I wonder about this but you could pretty much guarantee renting the place out.

[68 Valiant]

Re: Landlords

workers of the world unite
- previous landlords were insane maniacs

How so?

[SpiderGearsMan]

Re: Landlords

last guy took me to court to pay rent for the month after I moved out
I won

[Barry Donovan]

Re: Landlords

I currently have a landlord. I hate it, always will.

He is cool, knows i built places and owned and am a disabled vet. No need to look at tenants as a pet in f*cking cage.

I stayed n one place, the landlord was so bad, I nearly snapped into something that would not have been pretty....

this is after smoking the room free of crabs.. yes , in central maine. How the f*ck do crabs end up with a living space in the arctic breeze?

bitter subject. the profit is absolutely grotesque... I mean GROTESQUEly profitable. :

[SpiderGearsMan]

Re: Landlords

after spending all day kissing customer's asses for peanuts , I feel as the landlords customer , he should treat me well
they make like they are doing you a favor
like I said before , I take crap from NO ONE !

[TC]

Re: Landlords

Does anyone own rental property. It seems like a great investment but with alot of headaches. Does anyone have any experience? I'd like to know what experienced landlords figure for vacancy rates and typical expenses (damages) that are incurred. I'm still on the fence about buying because I am usually gone 6 months of the year and would be driven nuts with people calling to have me change light bulbs or something else petty.

It all depends on the size of the apartments you own. Like with the set I own. There are 14 units, I occupy one of them and the rest are for rent. Normally(except for this year) we have a very low turnover rate, I've actually had tenants that have lived here for over 20 years and have a couple right now in the 15 year range. But then we are in a good part of town that has good schools and low crime. So it is a desirable area to live in, which is the number one thing when looking for a set to buy. As for repairs, I only fix wear items, if they break something it's their puppy. And they can change their own light bulbs and plunge their own toilets, I only get involved when the clog is in the line. Basically unless it's a leaking faucet, an appliance or an A/C going out or something to do with safety I let the tenants fix the problem. Now saying all this I wouldn't be able to keep these apartments if I didn't do all the work myself, there is just not enough money to pay people to do the work. Plus when flipping them between tenants I always upgrade stuff, so depending on your vacancy rate and what you do it can get pretty expensive. Like right now, I've gone through 5 apartments in the last 6 months, I'm finishing the last one right now and I've been lucky to get people into them at the rents I charge as there are lots of apartments for rent. Is it a lot of work, it can be, especially if you like to keep things looking nice like I do. Does it pay off, well in does produce a six figure gross income, and lets me have the toys that I have, along with keeping my family happy.

Now if I was going to buy another set, I'd buy something with 20-30 units, that way I could afford to sub out some of the work when I'm not around.

[yellomalibu]

Re: Landlords

I am not a landlord, but if I ever decided to do it I'd have a real estate attorney write up the lease agreement.

I'm not a fan of lawyers in general, but real estate attorneys are always a good idea to cover your a$$, whether it's for a rental lease or buying, selling, closing... you know it's legal and you shouldn't have to worry about anything hinky.