Rental properties

• justincredible

  

  Any landlords on the OC? My wife and I are in the exploratory phases of looking for a potential rental property as we've got a little bit of money we can play around with, investment-wise.
• Automatik

  

  What do you want to know? My parents own rental properties. I've been involved with it practically my entire life.
• fish82

  

  I've had several friends/relatives get into it over the years. The story is pretty much always the same...if you don't mind having annoying deadbeats bothering you about stupid shit 24/7, it can be pretty lucrative.
• justincredible

  

  Automatik;1874023 wrote:What do you want to know? My parents own rental properties. I've been involved with it practically my entire life.

  Just curious to hear others experiences with it. If they've done well with it, any horror stories, things to be aware of, etc.
  
  We're looking at lower priced houses (less than $75k) as close to our neighborhood as possible. I've seen several listings that mention that the house has a long-term tenant already, which sounds like an ideal scenario so long as the house is well maintained.
• Automatik

  

  I've seen it all.....deadbeat tenants, plumbing disasters, entire house engulfed in flames, etc.
  
  Are you handy? If yes, that's a huge plus. We do around 90% of the repairs and maintenance tasks ourselves.
  
  Also, I suggest a strict "no pets" policy. Yes, it's harsh, but we've had more than one place get totally fucked by cats/dogs. My parents implemented that years ago.
• Ironman92

  

  Being handy helps.
  
  Choosing the renter is most important IMO....oh he has a good job or she's a nice church going lady......those things typically mean they smoke like a freight train, have 8 cats and miss rent 1/3 months.
• justincredible

  

  I am handy, which I have read is a big positive. The no pets policy makes sense. We have three dogs and don't let them trash our house, but we also own it.
  
  How do you handle rent payments? They send you a check each month or are there any services that allow you to do autopay through a bank/checking account?
  
  Do you cover any utilities or is that all on the renter?
• OSH

  

  justincredible;1874022 wrote:Any landlords on the OC? My wife and I are in the exploratory phases of looking for a potential rental property as we've got a little bit of money we can play around with, investment-wise.

  For a short-term rental, I know a tenant! :RpS_angry:
• Automatik

  

  justincredible;1874033 wrote:I am handy, which I have read is a big positive. The no pets policy makes sense. We have three dogs and don't let them trash our house, but we also own it.
  
  How do you handle rent payments? They send you a check each month or are there any services that allow you to do autopay through a bank/checking account?
  
  Do you cover any utilities or is that all on the renter?

  Check or cash for the most part, but my father has recently started using Square for his side business, so that may be an option in the future.
  
  100% of utilities paid by the tenant.
  
  Also, +1 on being careful when choosing the renter. Vet the shit out of them, proof of employment, pay stub, referral letter, etc. Don't be afraid to be overly careful. We've made that mistake in the past.
• gut

  I think people who've done well in rentals, in addition to all the operating stuff above normally really get the economics.
  
  You want to get paid for the sweat equity you're putting into this, on top of the 6-7% return that money could do (long-term) in a passive investment. I thought the rule of thumb was around 10% IRR, minimum, or you're not really being paid for your time and risk. And to get there, you need to be savvy about taxes and financing, handy definitely helps, and you hope you can be selective with tenants.
  
  I think that 10% IRR can be tough to find in big cities where there are a lot of really savvy investors, corporations in some cases, doing this (and comp after comp after comp makes it all pretty transparent and obvious)....or maybe I should say that 10% IRR is just about exactly what you will find, in almost every case, in those cities. I suspect outside the 25-50 largest cities there ARE a lot of inefficiently priced opportunities to be had.
• mcburg93

  

  justincredible;1874033 wrote: Do you cover any utilities or is that all on the renter?

  We cover water and trash. That way there was no excuse why there was trash built up in the back yard and the toilet was not clogged to the top of the bowl cause they did not pay their water bill.
• gut

  mcburg93;1874082 wrote:We cover water and trash. That way there was no excuse why there was trash built up in the back yard and the toilet was not clogged to the top of the bowl cause they did not pay their water bill.

  
  LOL - common sense, smart ideas....brilliantly simple, but I would have had to learn the hard way!
• Ironman92

  

  justincredible;1874033 wrote:I am handy, which I have read is a big positive. The no pets policy makes sense. We have three dogs and don't let them trash our house, but we also own it.
  
  How do you handle rent payments? They send you a check each month or are there any services that allow you to do autopay through a bank/checking account?
  
  Do you cover any utilities or is that all on the renter?

  Just a monthly rate for renter + they pay utilities. I always use people we know and can trust, therefore don't require a deposit....but if I had one I didn't know much about I would definitely require a deposit.
• ernest_t_bass

  

  I own a rental. Lose $25/month on it... It is our previous home that we couldn't sell, so we rented it out. I've had good, I've had bad. Currently hate my tenants, but they pay the rent.
• adog

  Tried it in my town (small college town) and it cost me more than I made to repair/fix up after each year when students left........ungrateful lil bastards.....lol
• adog

  But honestly, I have friends who are still landlords in same lil town, and they are making very good money at it. But they have hired a firm that overseas the rental, take care of all the calls, repairs, collect rent, etc for 10% of rent on each unit each month. Win win for both
• Commander of Awesome

  

  Automatik;1874037 wrote: Also, +1 on being careful when choosing the renter. Vet the shit out of them, proof of employment, pay stub, referral letter, etc. Don't be afraid to be overly careful. We've made that mistake in the past.

  +1 to this. I was the lease holder on the place before I moved to the west coast. I've had people come in and live with me who were total POS's. Had a guy who moved in, quit his job within two weeks and then spent the next 2 months doing nothing but waking up and start pounding beers at 10 am. I'd come home to our living room full of trash and empties everywhere. Ruined my coffee maker, etc... Then 1 day before I moved to the west coast he got up and left in the middle of the night leaving all of his shit int he house which he was supposed to get out in the next 2 weeks. Ended up having to throw all of his shit on the street and called the cops reporting it was his stuff.
• Ironman92

  

  Commander of Awesome;1874146 wrote:+1 to this. I was the lease holder on the place before I moved to the west coast. I've had people come in and live with me who were total POS's. Had a guy who moved in, quit his job within two weeks and then spent the next 2 months doing nothing but waking up and start pounding beers at 10 am. I'd come home to our living room full of trash and empties everywhere. Ruined my coffee maker, etc... Then 1 day before I moved to the west coast he got up and left in the middle of the night leaving all of his shit int he house which he was supposed to get out in the next 2 weeks. Ended up having to throw all of his shit on the street and called the cops reporting it was his stuff.

  Lol good god man