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Anyone Here A Landlord?

Discussion in 'Anything goes' started by Pete Incaviglia, Jul 18, 2010.

  1. Pete Incaviglia

    Pete Incaviglia Active Member

    Anyone here a landlord? Or, does anyone recommend becoming a landlord?

    My wife and I have a chance to all but steal a house from my inlaws. They're selling the house my wife grew up in. And my wife really wants them to keep it - even though they now have retired and live four hours away from their original home.

    The inlaws will sell it to us cheap. I mean dirt cheap.

    And we'd like to buy it and rent it out. It's three blocks from a college and the whole street has now become student housing - hence part of the reason my inlaws are leaving.

    It seems like it could be easy to fill the four rooms and easy to maintain (it's in great shape and my brother-in-law is an electrician who also knows some carpenters, etc.).

    I just worry it's going to become a pain in the ass.

    Any ideas? Any advice?
     
  2. WriteThinking

    WriteThinking Well-Known Member

    I rent out a condo that I own.

    The answer to your question probably depends on where you live in relation to the rental house.

    If you're near-by and can keep an eye on it, and do maintenance easily if you have to, and if you're not so far away that you can't go over and get the money easily if they're late with rent, then it probably wouldn't be too much problem.

    Or, you could hire a management company to handle it. But that can be pricey and cuts into any profits, anyway. And dealing with them has its issues, too.

    It really does depend on the circumstances, and your renters, too.
     
  3. canucklehead

    canucklehead Member

    Pete:

    My wife and I own two rental houses.
    However, considering that you can buy it off your inlaws dirt cheap, my advice would be to buy it dirt cheap and immediately flip it for a profit. Any profit is a good profit.
    You could buy it and rent it out to students but my guess is your wife has an emotional attachment to the house and would find it hard to watch students treat it less than kindly.
     
  4. Baron Scicluna

    Baron Scicluna Well-Known Member

    Pete:

    I've considered buying rental properties, too, although right now, life circumstances prevent me from doing so. I've done a bunch of research on it, and the general consensus is that, depending on the area and your expenses (if there's a mortgage on the property, for instance, or how high the property taxes are), you can make good money with it. But it's a lot of hard work.

    If you're in a good area and can find solid adult tenants, it should be workable. But having a house that's going to be college student housing may be a major headache for you. I'm having memories of my own student days, and I remember the housing was fairly substandard, thanks to dozens of students dumping beer all over the rug and holes punched out in the wall from impromptu wrestling matches. Plus, you may not want to be hearing from the town police after they bust one of the students' parties. And as Canucklehead said, your wife may not like to see what the house becomes after some college students live in it.

    Management companies typically take 10 percent of the rent, give or take a few percentage points. Either managing the property yourself or having the company, you'll have to do your research on them. Ask them for references, both from other landlords and from the tenants that they manage. How fast is the company in responding to tenant complaints about repairs? How good is the company at researching the tenants? Do they do criminal background checks, or do they let any drug-dealing pedophile rent from them? Have the tenants provide references of prvious landlords, and do credit checks on them.

    If you manage it yourself, like Write says, it'll depend on your location. One thing that you need to factor in is a backup plan in case you're at work or out of town. Do you know people who could act as property managers on short notice if you're on vacation and a pipe bursts, for instance.

    Also, you have to consider the financials. Generally, whenever I see rental properties for sale, the ads always boast about how much you clear after mortgage, taxes and insurance. What they always leave out is the other expenses. Many properties that I've seen has the owner paying for water/sewer. A lot of others pay for the heat as well. Ideally, you want the tenants paying the heat and electric.

    Plus, you should also set aside money for both future repairs and vacancies. I saw one sales site that recommended 10 percent of the gross rent each for the repairs and vacancy, so if your tenants trash the place, you keep their deposit and you'll have some money to off-set the expenses, which inevitably are higher that the deposit.

    Also, there's the time factor. Depending on where you are, you have to decide about snow removal, and lawn care. Would you want to take the time to shovel out their driveways, or mow the lawn?

    If anything, the advice from other landlords I've received has been to treat it like a business (don't get upset about evicting kids, one LL told me), and like a part-time job.

    Hope this helps. As for me, I'm still on the fence on whether I want to buy or not.
     
  5. Deeper_Background

    Deeper_Background Active Member

    Buy it for dirt cheap, put some new paint or carpet on it and flip/pocket the money as fast as you can before the economy goes south again
     
  6. Boom_70

    Boom_70 Well-Known Member

    Now is the time to invest in real estate if you have the funds.

    Pete if the house is in good shape now it won't be one the college kids arrive.

    If I were you I would buy it and try to flip it to some college parents who want to set their kids up
     
  7. Giggity

    Giggity Member

    I rent a house to college kids. It's a bit of a pain in the ass, but passive income is awesome. The key is to charge a large deposit, and to painstakingly record the condition of the house at move-in. Also, get a lawyer to writer you an iron-clad lease. The wording can be crucial - for instance, write it in that they do all landscaping, and that they have to have the rugs professionally steam-cleaned when they move out.

    I just had some kids move out who had burned holes in the carpet. It was a pain in the ass, but I got new carpet at their expense because I'd done my homework and had a large deposit on hand.
     
  8. Giggity

    Giggity Member

    Another thing, while I'm thinking about it – with college kids, you have a bit more of an upper hand when you're selecting tenants. Personally, I don't answer my phone when I have an ad up. Then I get their name, punch them into facebook, and see what pops up. You can learn a LOT from somebody's facebook, and a surprising number are still public. If they pass muster, I call them back. If not, I don't, and that's that. May sound slightly creepy, but if somebody's dumb enough to have a public facebook with pictures of themself facedown in a puddle of vomit, you're saving yourself a world of hurt.
     
  9. MileHigh

    MileHigh Moderator Staff Member

    My sister and brother-in-law rent out a place to college kids. The huge deposit is key. They go through the place with a video camera and the tenants before they move in to have it on the record. It sounds like flipping the house isn't an option. And if you're basically going to have college kids in there, it'd probably be worth it to have a management company handle it, but be sure to get all of the fees in writing. Look at all of the fine print.
     
  10. da man

    da man Well-Known Member

    [​IMG]

    I am. What of it?




    Sorry. Couldn't help myself.
     
  11. canucklehead

    canucklehead Member

    We just avoided a bad tenant by checking him out on Youface (30 Rock reference, sorry). The woman he listed as his previous landlord was a friend who sounded strung out when I called so we turned to the internet to see what we could find. Saw a picture of her with his kids. They didn't have their story straight.
     
  12. If he's going to flip it immediately, the decent thing to do would be to pass on some - I'm not saying all, but some -- of the profits to his inlaws.

    If he makes a big profit with just a can of paint and a for-sale sign, his in-laws will eventually come to resent it (at least, if they are your average folk)
     
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