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is buying home rental worth the hassle

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    #1

    is buying home rental worth the hassle

    In a perfect world, you buy a home rental, got a good tenant that pays on time and dont trash your house.

    What if you got them horrible tenants that dont pay on time and also destroying ur home either purposely or not..

    I rather ask the business savvy folks here than investment forum.. cuz i aint really buying just curious..
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    #2
    The key is to do thorough screening of potential renters. Very important. You need credit checks, references, background checks. It also depends on where you live. Some cities and states are not very supportive of landlords. In a city like NY, if a tenant refuses to pay rent it can cost you tens of thousands of dollars in legal fees to get them out and as long as a year or more that you lose in rent.

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      #3
      I owed a 'triple decker' house for 4 years and then sold after having a bad tenant experience. If you are a good manager, can be a tough landlord (you can't be nice) and like tackling maintenance projects - then a rental property makes sense.

      I currently own a condo in Boston and lease it to a guy who keeps the apartment immaculate and pays his rent early every month. The condo is almost maintenance free and I've had to only fix a few things here and there. This has been a great investment - it generates positive cash flow, has appreciated in value, and actually generate a tax loss - kinda like Trump's business dealings.

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        #4
        Originally posted by BostonGuy View Post
        I owed a 'triple decker' house for 4 years and then sold after having a bad tenant experience. If you are a good manager, can be a tough landlord (you can't be nice) and like tackling maintenance projects - then a rental property makes sense.

        I currently own a condo in Boston and lease it to a guy who keeps the apartment immaculate and pays his rent early every month. The condo is almost maintenance free and I've had to only fix a few things here and there. This has been a great investment - it generates positive cash flow, has appreciated in value, and actually generate a tax loss - kinda like Trump's business dealings.
        You dont have a handyman. Im sure you dont know everything like broken a/c.

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          #5
          Originally posted by GhostofDempsey View Post
          The key is to do thorough screening of potential renters. Very important. You need credit checks, references, background checks. It also depends on where you live. Some cities and states are not very supportive of landlords. In a city like NY, if a tenant refuses to pay rent it can cost you tens of thousands of dollars in legal fees to get them out and as long as a year or more that you lose in rent.
          I thought you cant reject tenants that qualify specially section 8 tenants

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            #6
            Originally posted by B.UTLER View Post
            I thought you cant reject tenants that qualify specially section 8 tenants
            Each state is different. I think it also depends on the occupancy rate of the unit, but you have to know the laws of where you are looking to buy or invest.

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              #7
              I've owned rental properties in two states. Couple things to think about, in addition to Dempseys wise council:

              1) Economics. The property has to be cash positive. Figure in insurance, mortgage (see below), and losing one months rent every year....every tenant leaves a mess that needs to be fixed up.
              2) check your tenants history THOROUGHLY.
              3) NO DOGS.
              4) have a good knowledge of your local and state laws.
              5) If possible, don't have a mortgage. The tax benefits aren't as good as years ago.
              6) Maintenance will kill you....either be handy with tools yourself or know a good cheap handyman.
              7) Have the house pre inspected....bad AC or plumbing will kill your cash flow.

              And finally...

              8) invest the money in yourself, not a rental property.

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                #8
                What about subleasing with AirBnB

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                  #9
                  If your rental is out of state, who talks to tenants or do maintenance.

                  Do you have property managers?

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                    #10
                    Originally posted by B.UTLER View Post
                    If your rental is out of state, who talks to tenants or do maintenance.

                    Do you have property managers?
                    I used to have a rental in Denver that was managed for me as I live in Dallas. After 17 years of ownership (!) and headaches I sold it for 4 times my initial investment which was a 7% rate of return net of taxes but not including tax benefits over the life of the rental.

                    I believe I was paying 10% of the rent on management fees.

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