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Re: Rent houses
[Re: BigPig]
#8020630
10/23/20 12:13 PM
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Joined: Apr 2005
Posts: 43,993
Stub
THF Celebrity
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Joined: Apr 2005
Posts: 43,993 |
With interest rates so low it makes a lot of houses more affordable, so how much does location play into this decision? Do you pay more for a house in the metroplex expecting a return equal to the cost, or do you head to the smaller towns. Are there certain areas that are a absolute no go like Pleasant Grove or S.E Dallas? Where in general is the ideal place to buy a reasonably priced house in an area deemed not to risky?
“I never forget a face—but in your case, I’ll be glad to make an exception.” —Groucho Marx
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Re: Rent houses
[Re: BigPig]
#8020640
10/23/20 12:24 PM
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Joined: Jul 2019
Posts: 14,271
Hudbone
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Lower end properties are easier to rent out, stay full more often and the renters typically don't expect a whole lot. The caveat is the renters of lower end properties oftentimes know more about eviction proceedings and the legal rigmarole than the landlords do.
From a financial aspect and you have to always remember that, this is a financial deal for you and NOT your tenants. You'll hear all kinds of things, but you have to set up rules and then strictly enforce them or you will get run over. If you can't out a pet down, it will be tough for you to evict someone. Always remember, it's business.
Buying real property, taking the income, acquiring tax advantages, securing capital gains through appreciation and additional equity by having someone else paying rent - that there is a sweet deal. I got out of it when a female renter told me her boyfriend was being rough with her, she had called 911 and I needed to get over there right now. I let her know people with guns were coming over and my presence was not needed. Fortunately for me (a whole lotta luck), I was able to simply convert over to commercial real estate.
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Re: Rent houses
[Re: Stub]
#8020650
10/23/20 12:34 PM
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Joined: Sep 2004
Posts: 12,428
RedRanger
THF Celebrity
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With interest rates so low it makes a lot of houses more affordable, so how much does location play into this decision? Do you pay more for a house in the metroplex expecting a return equal to the cost, or do you head to the smaller towns. Are there certain areas that are a absolute no go like Pleasant Grove or S.E Dallas? Where in general is the ideal place to buy a reasonably priced house in an area deemed not to risky? Places like South Dallas Fair Park area are actually gold mine for renting. You need to section 8 those house. You can pick them up dirt cheap or at least you could when I was doing it. Once a person gets on Section 8 they are usually good tenants due to not wanting to loose their section 8 benefits. The perfect scenario if you can find it, would be to get a few Section 8 in that area and have a person take care of management of them and pay him a percentage of rent income. If you can find a guy who lives in the area or is familiar then that would be key.
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Re: Rent houses
[Re: BigPig]
#8020652
10/23/20 12:35 PM
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Joined: Jan 2007
Posts: 15,530
reeltexan
THF Celebrity
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Joined: Jan 2007
Posts: 15,530 |
"If we ever forget that we are One Nation Under God, then we will be a nation gone under." Ronald Reagan
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Re: Rent houses
[Re: BigPig]
#8020658
10/23/20 12:40 PM
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Joined: Nov 2011
Posts: 16,854
S.A. hunter
THF Celebrity
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Joined: Nov 2011
Posts: 16,854 |
Don't get granite counter tops for a rental.
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Re: Rent houses
[Re: S.A. hunter]
#8020662
10/23/20 12:41 PM
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Joined: Sep 2004
Posts: 12,428
RedRanger
THF Celebrity
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THF Celebrity
Joined: Sep 2004
Posts: 12,428 |
Don't get granite counter tops for a rental. I disagree with that
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Re: Rent houses
[Re: Hudbone]
#8020665
10/23/20 12:44 PM
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Joined: Feb 2008
Posts: 14,149
glens
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Lower end properties are easier to rent out, stay full more often and the renters typically don't expect a whole lot. The caveat is the renters of lower end properties oftentimes know more about eviction proceedings and the legal rigmarole than the landlords do.
From a financial aspect and you have to always remember that, this is a financial deal for you and NOT your tenants. You'll hear all kinds of things, but you have to set up rules and then strictly enforce them or you will get run over. If you can't out a pet down, it will be tough for you to evict someone. Always remember, it's business.
Buying real property, taking the income, acquiring tax advantages, securing capital gains through appreciation and additional equity by having someone else paying rent - that there is a sweet deal. I got out of it when a female renter told me her boyfriend was being rough with her, she had called 911 and I needed to get over there right now. I let her know people with guns were coming over and my presence was not needed. Fortunately for me (a whole lotta luck), I was able to simply convert over to commercial real estate. I had a couple commercial shops/yards out in West Texas Oilfield and found out when times went down, payment was just as hard to get. Hands tore up just as much. Damage clauses in Lease Papers but found out better to get them out and worry about it later as Lawyers eat that stuff up. Easier to evict though. Sold both.
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Re: Rent houses
[Re: glens]
#8020752
10/23/20 01:40 PM
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Joined: Oct 2004
Posts: 39,573
redchevy
THF Celebrity
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Joined: Oct 2004
Posts: 39,573 |
I had a couple commercial shops/yards out in West Texas Oilfield and found out when times went down, payment was just as hard to get. Hands tore up just as much. Damage clauses in Lease Papers but found out better to get them out and worry about it later as Lawyers eat that stuff up. Easier to evict though. Sold both.
Yeah that oilfield lease space is pretty questionable... I appraised a few office warehouses in the eaglford years ago. They were paying more a sq.ft. to rent metal buildings off I-37 than people were paying for class A office space down town in high rise buildings... that right there tells you its lucrative as hell but dont get caught holding the bag.
It's hell eatin em live
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Re: Rent houses
[Re: BigPig]
#8020757
10/23/20 01:43 PM
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Joined: Oct 2004
Posts: 39,573
redchevy
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Ive personally never really done the rental thing. I have thought about it, just never got it done. I rented 3 rooms in college and lived in the forth and it worked, but i knew the tenants always and lived there so it was different.
I know some say its not worth it, but i know a lot of people who came from nothing financially worked average/normal jobs and retired early with a nice nest egg and income stream from rental houses too. Wish i knew everything they did.
It's hell eatin em live
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Re: Rent houses
[Re: BigPig]
#8020772
10/23/20 01:51 PM
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Joined: Oct 2008
Posts: 16,832
68rustbucket
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Posts: 16,832 |
Aren’t renters immune to evictions these days?
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Re: Rent houses
[Re: 68rustbucket]
#8020782
10/23/20 02:03 PM
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Joined: Apr 2005
Posts: 43,993
Stub
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Posts: 43,993 |
Aren’t renters immune to evictions these days? A neighbor who owns I think around 5-6 in the E Richardson area is having issues with tenants not paying and he cannot evict them.
“I never forget a face—but in your case, I’ll be glad to make an exception.” —Groucho Marx
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Re: Rent houses
[Re: BigPig]
#8020792
10/23/20 02:05 PM
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Joined: Oct 2008
Posts: 16,832
68rustbucket
THF Celebrity
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Joined: Oct 2008
Posts: 16,832 |
Scary, having to cover rent on that many units. Hopefully they are payed for.
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Re: Rent houses
[Re: Stub]
#8020795
10/23/20 02:07 PM
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Joined: Oct 2004
Posts: 39,573
redchevy
THF Celebrity
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Joined: Oct 2004
Posts: 39,573 |
Aren’t renters immune to evictions these days? A neighbor who owns I think around 5-6 in the E Richardson area is having issues with tenants not paying and he cannot evict them. Know a person working for a large bank that says the same thing about people not paying mortgages and other various loans that they supposedly "cant forclose on" Regardless of what you think of the rona, these are different times we are experiencing than most anything before this.
It's hell eatin em live
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Re: Rent houses
[Re: BigPig]
#8020836
10/23/20 02:35 PM
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Joined: Apr 2007
Posts: 60,541
BOBO the Clown
kind of a big deal
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kind of a big deal
Joined: Apr 2007
Posts: 60,541 |
Multi family seems to be a bigger pay off, but in appreciation.
The ones I’ve seen do really well are coastal. I have two friends with AirBNB rentals on coast. One Aransas and one in gulf shores. Gulf shores paid for its self in two years.
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Re: Rent houses
[Re: BigPig]
#8020843
10/23/20 02:43 PM
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Joined: Dec 2010
Posts: 235
Texpolo1106
Woodsman
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Woodsman
Joined: Dec 2010
Posts: 235 |
As a current rental owner, I would highly recommend getting a property manger. It removes you from all of the lower value tasks that will only waste your time and cause you frustration. This is especially true if this is a long term play and if you plan on adding multiple properties to your portfolio in the next few years.
With the 6 units we have, my wife and I might spend 3 - 4 hours a year dealing with our PM and any issues that happen to come up. And honestly, it's probably less than that. That gives me more time to analyze potential deals, network with other investors, etc.
As Hudbone detailed, there are many benefits which are hard to find with other types of investments.
Realtor at The Chinworth Real Estate Group Keller Williams Brazos West 817-223-8456 Lic# 0765947
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Re: Rent houses
[Re: BOBO the Clown]
#8020844
10/23/20 02:44 PM
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Joined: Jan 2010
Posts: 22,997
fadetoblack64
giddyup
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giddyup
Joined: Jan 2010
Posts: 22,997 |
Go buy a place in Pagosa Springs etc resort area and Air Bnb that sucker out..................that's how to make rental money these days.
Just rented Mr Ts place for a week and he does it right, He would be worth talking to here on the forum.
Forget these regular rental properties now. Get paid up front every time and do very well in resort locations.
PS.................and then you also have a cool place to go any time you want.
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Re: Rent houses
[Re: fadetoblack64]
#8020879
10/23/20 03:04 PM
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Joined: Nov 2014
Posts: 7,789
Mr. T.
THF Trophy Hunter
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Go buy a place in Pagosa Springs etc resort area and Air Bnb that sucker out..................that's how to make rental money these days.
Just rented Mr Ts place for a week and he does it right, He would be worth talking to here on the forum.
Forget these regular rental properties now. Get paid up front every time and do very well in resort locations.
PS.................and then you also have a cool place to go any time you want. That is so right. I had two regular homes that I rented out in Fort Worth and lost money on both of them. Got rid of them and bought a house in the beatiful little town of Pagosa Springs near Wolf Creek ski area and rent by the week, get paid in advance, spend the summer there out of the Texas heat. And, takewhatyoucan64, thank you for the recommendation.
Cabin rental in Pagosa Springs, Co. Sleeps 10, If interested please PM me.
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Re: Rent houses
[Re: BOBO the Clown]
#8020882
10/23/20 03:05 PM
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Joined: Oct 2004
Posts: 39,573
redchevy
THF Celebrity
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THF Celebrity
Joined: Oct 2004
Posts: 39,573 |
Multi family seems to be a bigger pay off, but in appreciation.
The ones I’ve seen do really well are I have two friends with AirBNB rentals on coast. One Aransas and one in gulf shores. Gulf shores paid for its self in two years. Ahhhh I have always wanted to do multifamily and have thought about somethign similar at the coast. Its hard to convince my wife on buying somethign like that though. We blew our load for a few years anyway now so
It's hell eatin em live
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Re: Rent houses
[Re: BigPig]
#8020884
10/23/20 03:07 PM
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Joined: Nov 2007
Posts: 5,874
LarryCopper
THF Trophy Hunter
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Joined: Nov 2007
Posts: 5,874 |
Right now is a scary time to get in. Housing costs are up and eviction is darn near impossible. We converted our first home to a rental back around 2001. Our situation isn't typical tho. Our first renters treated it like their own and stayed for almost 10 years. I've had the same tenant for 5 years now, too. We only had one that I would say was a "bad" renter. A couple of yuppies that thought that every little thing needed to be perfect for their rental. They were a big PITA. All in all it has worked out great for us. We bought before the boom so we were able to adjust rent enough that after expenses (thing are always going to break, AC units, need carpet, paint, etc.) we always turned a profit over our mortgage payment. They basically paid off the house for us, made some immediate profit, and were able to take advantage of some tax breaks along the way. It's now paid off so all the rent minus taxes is profit and it's worth more than twice what we paid for it. It's currently paying for knucklehead #1 to go to college.
Thing I learned along the way: - No section 8 or any other subsidized BS. - Screen applicants with a fine tooth comb. There is an online site that for $25 will give you complete credit and rental history as well as criminal records. - Do NOT bend over backwards to spend a dime more than you need. The house needs to be safe and in working condition... that's it. No bells and whistles. - Find a trustworthy contractor to do paint and carpet for you if you can't do it yourself. You may be able to get away with touch up sometimes, but paint is usually needed. - Specify every little thing you can think of in the lease agreement. If you PM me I can send you the template I use.
The only think I wish I would have done different is sell it right after the boom or take out a home equity loan. Bought another house with it. Now I'd have two houses paid off. But, at the time I had two small kids and working my arse off and didn't want to pay someone else to manage the property so I didn't do it.
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Re: Rent houses
[Re: Hudbone]
#8020896
10/23/20 03:13 PM
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Joined: Dec 2010
Posts: 8,841
DocHorton
THF Trophy Hunter
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Joined: Dec 2010
Posts: 8,841 |
Lower end properties are easier to rent out, stay full more often and the renters typically don't expect a whole lot. The caveat is the renters of lower end properties oftentimes know more about eviction proceedings and the legal rigmarole than the landlords do.
From a financial aspect and you have to always remember that, this is a financial deal for you and NOT your tenants. You'll hear all kinds of things, but you have to set up rules and then strictly enforce them or you will get run over. If you can't out a pet down, it will be tough for you to evict someone. Always remember, it's business.
Buying real property, taking the income, acquiring tax advantages, securing capital gains through appreciation and additional equity by having someone else paying rent - that there is a sweet deal. Best advice in this thread. And for those of you who say there are easier ways to make money, let's hear them, and don't say the stock market...I've pretty much tried them all. BigPig....I'd take advice from people who have owned multiple rental properties, not ones who have sit on the sidelines or owned one or two.
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Re: Rent houses
[Re: 68rustbucket]
#8020897
10/23/20 03:15 PM
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Joined: Dec 2010
Posts: 8,841
DocHorton
THF Trophy Hunter
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THF Trophy Hunter
Joined: Dec 2010
Posts: 8,841 |
Aren’t renters immune to evictions these days? Only if your loan is backed by the government, otherwise you can still get evictions.
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Re: Rent houses
[Re: BOBO the Clown]
#8020899
10/23/20 03:17 PM
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Joined: Dec 2010
Posts: 8,841
DocHorton
THF Trophy Hunter
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Joined: Dec 2010
Posts: 8,841 |
Multi family seems to be a bigger pay off, but in appreciation.
The ones I’ve seen do really well are coastal. I have two friends with AirBNB rentals on coast. One Aransas and one in gulf shores. Gulf shores paid for its self in two years. Correct, more good advice. Multifamily is where cap rates and interest rates factor in, not as much cost per sq ft like SFR. Easier to make money when the multiple is 14x. One of my real estate mentors has a lot of rentals in Gulf Shores....but he started buying after the crash back around 2010-2011. He does pretty well on them. Best deal, according to him, is buy in pre-construction phase when you can get for a 20-30% discount.
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Re: Rent houses
[Re: TXHOGSLAYER]
#8020913
10/23/20 03:25 PM
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Joined: Jan 2011
Posts: 19,498
Erathkid
THF Celebrity
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THF Celebrity
Joined: Jan 2011
Posts: 19,498 |
Talk to our friend and run it like he does. You are an arse and it is a business. Run it like one and you will do well. I am proud of you boy. You have put some thought into this deal and it shows. Our friend had enough units to make it pay. Still the opportunity cost for the money is steep. Lots of better returns out there. Works great for us. Background checks are a must. Take care of small issues promptly. I've been a landlord for quite a few years. Never had any major issues. I have a buddy who manages our place. That takes the pressure off of me. If tenants think you're their 'friend' they sometimes try to take advantage of that relationship.
Life is too short, as is. Don't chance it. Don't text and drive.
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Re: Rent houses
[Re: BigPig]
#8020968
10/23/20 03:53 PM
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Joined: Nov 2010
Posts: 3,249
Marc K
Veteran Tracker
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Veteran Tracker
Joined: Nov 2010
Posts: 3,249 |
Lake houses down here have turned out to be good Vrbo/Airbnb investment for many. In good neighborhoods, appreciation is a very real consideration. (Our home went from $300K to $500K in the last 3 years) Yes, just like everywhere, there are neighborhoods to invest in and others to avoid!
Vacation rental rates seem to run $200 to $800+ per night and are not just active in the summer - we see lots of fire rings lit up on chilly nights. In watching vacationers come and go, it would appear that they are not struggling to pay their bills.
Just a thought.
A Democracy is when two wolves and a lamb vote on the dinner menu. That is why this country was specifically not designed as a Democracy. We are a Constitutional Republic.
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Re: Rent houses
[Re: BigPig]
#8020970
10/23/20 03:54 PM
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Joined: Feb 2012
Posts: 9,737
Mickey Moose
THF Trophy Hunter
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Joined: Feb 2012
Posts: 9,737 |
Better ways to make money. I’m all ears on better ways to make money. I’m not in this for the monthly income, the long term payoff is what I’m interested in. Off the top of my head and in keeping with real estate... a REIT. Some may balk at the suggestion but if careful it can make sense. Compare these two: office or clothing store vs a data center. In the former, yes, there could be (and has been) negative exposure, logically, as a result of 'Rona. In the latter, businesses shifted to and are still shifting to remote work that would help a data center. The point there is, no matter the investment... due diligence. But overall, in response to me saying there is easier money and your questioning me - my REIT example is completely passive vs residential renting (unless you employ a management service which cuts in to your profit and still leaves you with some sort of work to do in the end).
My botnet is bigger than yours.
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