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Old 12-29-2015, 05:58 PM   #1
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Default Rental property for investment?

Any of guys have any rental property you rent out?? Care to share some pros and cons, or stuff you found out that you did not think of before hand LOL


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Old 12-29-2015, 07:18 PM   #2
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I rent my house in Arizona but it's the only one I have and would not do anymore because I don't like being an out of town landlord. Get a really good property manager esp. if you are thinking of doing more than one. It' easier if you live close. You need several, like 10 or 11 to start making money. Make sure your rental market is strong so the house wont sit empty for long. My house sat for 3 months because of a surplus of units. We know people that have a bunch and it is very time consuming as they do all the work on them as well as manage them. Don't buy crap because you will have crappy renters. Charge a large pet deposit if you allow pets.
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Old 12-29-2015, 08:00 PM   #3
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Yeh
But what exactly do u want to know?
O.k. Know this, contrary to the popular when it comes up PT opinions. Tenants can't really destroy a house and nobody cares about a paint job, lol..
Seriously nothing big is ever going to happen to the place short of a fire or something insurance will pick up anyhow. The secret to low cost is a low turnover. You want to get 10 years out of a paint job and the carpets? Get a tenant that stays ten years. Easy. The house? Nothing is gonna happen to it, that can't be easily fixed, and it's a rite off.
There's all kinds stuff along the way but that one big 'the tenants will destroy it!' Naaah

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This here. There's another one I forget its title exactly, the same 'for dummies' series. Maybe land lording for dummies?
It's actually pretty good.
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Old 12-29-2015, 08:01 PM   #4
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Dave I have been contemplating this but mentioned to a contractor who called me out to a rental every time I do I see what tenants do to them. Still not a bad investment.
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Old 12-29-2015, 08:28 PM   #5
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I am wondering if their is a particular type of property that is better in general, like multi family or house or town home or condo, I am thinking like a duplex.
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Old 12-29-2015, 08:48 PM   #6
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Investors have spreadsheets for different types, areas and dozens of other factors they use. I recently bought a highly rated investment tool but haven't even opened it.

I have a tendency for over extending myself with work, just not enough time in the day for family and work.
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Old 12-29-2015, 09:13 PM   #7
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I have two duplexes that have four great long standing tenants. So my experience with tenant nightmares is non existent. I'm sure the deeper you go in, just like in any business, the more likely you are to have problems. My ex brother-in-law does nothing but section 8 properties. I think he has 40+ properties at this point. He's been in the game for 30 years and has his systems set up to remove dead beats and handle property maintenance. His properties do not appreciate much in dollars but the last time I spoke with him he makes approx $100/month per property in passive income after expenses until they are paid off. Counting legal fees, removal, renovation and empty time my best guess is he makes about $7,500/month at this point with the properties being worth maybe $1.5 M. Not bad for a 52 year old guy that quit school in 8th grade and also has a full time job, med benefits and a pension with the railroad.

I can give you some pointers based on my experience and what my mentors have taught me, Dave. Feel free to give me a ring during the day.
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Old 12-29-2015, 09:21 PM   #8
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Best way to keep maintainance cost down is to have tile floor throughout, no ceiling fans, no central air ( let them buy their own window units), same color and sheen paint throughout, no screen or storm doors, and bi-annual inspection of the property. Have a strong rental agreement that includes random drug testing. The drug testing will weed out a lot of the ones that will cause problems.
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Old 12-29-2015, 09:32 PM   #9
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Quote:
Originally Posted by Lambrecht
Best way to keep maintainance cost down is to have tile floor throughout, no ceiling fans, no central air ( let them buy their own window units), same color and sheen paint throughout, no screen or storm doors, and bi-annual inspection of the property. Have a strong rental agreement that includes random drug testing. The drug testing will weed out a lot of the ones that will cause problems.
Whaaa?
Random drug testing?
Seriously. Legal where you live? Ugh. What's this country coming to if so. Ugh all I can say.
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Old 12-29-2015, 10:03 PM   #10
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The random drug testing is used more as a scare tactic. However, it is fully enforcible by means that if the tenant refuses to take a urinalysis test than you have a right to evict for breach of contract. And if they do take it an fail then you still have a right to evict. Either way it legally removes the tenant. In the state of Indiana tenants have 10 days to vacate the property from receiving eviction notice. Every line item of a rental agreement should be explained to the tenant and initialed by them so that there is no denying by tenant that they did not know or understand the entire contract.
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Old 12-29-2015, 10:20 PM   #11
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If you have to have drug testing then you have properties that attract drug users. Good properties, higher rents, higher deposit and good management will keep out the riff raff Good credit and job history are the best way to start. Invest in something that people want to live in and take care of the place and want all their deposits back. Don't buy anything you wouldn't live in.
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Old 12-29-2015, 10:58 PM   #12
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The drug testing is just another means of CYA. People who are financially higher on the ladder doesn't mean they don't use drugs it just means they can buy a higher priced drug. If you are renting a property and don't have stipulations about drugs in the contract you are leaving yourself wide open for lawsuit and possible seizure of your property if they are in there growing or manufacturing illegal narcotics. At least, if you have it in your contract you are showing that you made a good faith effort to mitigate the problem.
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Old 12-29-2015, 11:44 PM   #13
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I don't think I want a tenant who needs to submit to a drug test to get a lease. I can't imagine even bringing it up to a applicant.
Maybe it's a regional thing? I don't know. Anyone with any self respect I know. Isn't gonna consent to peeing in a cup for a potential landlord. I think that is crazy. I'd think you'd have to be pretty hard up on prospects of getting a place, really, to lower urself to that level.

Just thinking out loud here. I'm trying to picture the person who would accept that term. I can't. Unless there was something so wrong with them, credit wize, work history wize, so on...,,, that they would absolutely have to take whatever they could get.
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Old 12-30-2015, 05:50 AM   #14
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You misread the post. The lease contract states that the tenant will agree to submit to a test if requested. They do not have to take one to get the lease. Not really sure why this is such a big deal. Almost any job you apply for has the same stipulation. OP asked for things that he may not be thinking of and I have found that this particular item is one that many landlords overlook. It's really no different than pee testing an employee who is suspected of using drugs or has an accident on the job.
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Old 12-30-2015, 09:24 AM   #15
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Quote:
Originally Posted by Lambrecht View Post
Best way to keep maintainance cost down is to have tile floor throughout, no ceiling fans, no central air ( let them buy their own window units), same color and sheen paint throughout, no screen or storm doors, and bi-annual inspection of the property. Have a strong rental agreement that includes random drug testing. The drug testing will weed out a lot of the ones that will cause problems.
Quote:
Originally Posted by Lambrecht View Post
You misread the post. The lease contract states that the tenant will agree to submit to a test if requested. They do not have to take one to get the lease. Not really sure why this is such a big deal. Almost any job you apply for has the same stipulation. OP asked for things that he may not be thinking of and I have found that this particular item is one that many landlords overlook. It's really no different than pee testing an employee who is suspected of using drugs or has an accident on the job.

The insurance business is what brought this line of thinking about whether it be for a job or house is just wrong... HO or business owner saving a buck off the back of someone they are making money off of is just pitiful...

I would tell you to kiss my ass all up in the crack if you asked for a test for employment or a place to live. It's none of your GD business what I or others do in there personal life...

Keep things simple and adopt an attitude of gratitude that you are in the position to have what you have not take what you can so YOU can have more...
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Old 12-30-2015, 09:40 AM   #16
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I know guys who only do the Section 8 stuff. They claim to always get their rent money regardless of the tenant. I haven't talked business with either of them in quite a while--don't know if that is still the case.

I am not a landlord, but think I would rather deal with a little better properties and clientele.


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Old 12-30-2015, 10:16 AM   #17
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With two major universities within 10 miles of each other, there is a major rental market. Unfortunately, the students are not a great target demographic: high turnover//low responsibility. The successful landlords in that segment rely on thin margins and high volume.

For smaller operators, there seem to be two directions worth persuing: target another market segment that is less transient/more responsible or spend your time as a landlord/handyman.
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Old 12-30-2015, 12:39 PM   #18
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How much income would you want to make right away?
Personally, it would be nice to make a decent amount buy if I had my bills pad already I would be happy with a few places, making enough to pay all expenses and maybe a little more. The real win comes when thr mortgage is paid and your able to bank all that money aside from maintenance and taxes and suppliment your retirement
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Old 12-30-2015, 12:44 PM   #19
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Delta- drug testing is done all the time for pre-employment. I agree with you about what you do on your own time is your business but at the end of the day having rentals is a business and should be treated like any other business.
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Old 12-30-2015, 03:26 PM   #20
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Quote:
Originally Posted by Lambrecht
You misread the post. The lease contract states that the tenant will agree to submit to a test if requested. They do not have to take one to get the lease. Not really sure why this is such a big deal. Almost any job you apply for has the same stipulation. OP asked for things that he may not be thinking of and I have found that this particular item is one that many landlords overlook. It's really no different than pee testing an employee who is suspected of using drugs or has an accident on the job.
No I didn't miss anything,
You'd try and get a advantage and I get that.
But I don't think it is overlooked it is just sooo distasteful. I couldn't imagine having asked any one of my current tenants to sign to such a clause. It's absurd, and I'd like to think had I the nerve they'd have walked out, really,
Must be a Midwest southern republican kinda thing maybe, in reference to the employment mention too, people here don't get asked to pee in cups for employment or anything else. It's gotta be something they do out/down there I dunno.

At the end of the day. It's, accepting a tenant, probably a lot like accepting someone for employment. Knock wood I've been really good at it. I don't want to junx myself but so far perfect even. And the first thing I need is a pool, the bigger the better of people to choose from. For that position just like I think would be for a employment position. That little stipulation would lessen my pool and I think by a lot. A really lot. No way.
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