Time to buy rental property?

by Guest Thu Jul 14, 2011 5:39 pm

3-4 bedroom condos, built between 2004-2006, come under great, award winning school district, within walkable distance to shopping, dining and high school. Great location! Easy to rent. Rents are around $1400/m, including the maintenance which I think is around $150/m. Price of the homes ( 3 of them in the market now) between $175-185k. They were bought at $250-260 in the hay days. Thinking of putting 5-10% down, 30 yr mortgage and paying the mort with the rents. Good idea? What do you all think?

by Guest Thu Jul 14, 2011 7:25 pm

Rent with an option to buy is good. But a single famliy home is better. Maintenance fee for do it your self or hire lawn services will be cheaper. Just my opinion.

by Mr. T Thu Jul 14, 2011 7:28 pm

kinnera wrote:3-4 bedroom condos, built between 2004-2006, come under great, award winning school district, within walkable distance to shopping, dining and high school. Great location! Easy to rent. Rents are around $1400/m, including the maintenance which I think is around $150/m. Price of the homes ( 3 of them in the market now) between $175-185k. They were bought at $250-260 in the hay days. Thinking of putting 5-10% down, 30 yr mortgage and paying the mort with the rents. Good idea? What do you all think?

First things first, getting away with putting just 10% down is no more easy. Used to be in those good old days, but now it has become tougher and tougher. They slap you with all sorts of hidden costs and insurance premiums even if they do allow you. Second, condos are difficult to sell, if that is a point of consideration for you.

by Guest Thu Jul 14, 2011 7:30 pm

Condos are also difficult to rent. The condo fees keep going up. Less privacy.

by truthbetold Thu Jul 14, 2011 9:46 pm

Kinnera,

Based on your posts I am assuming you are a balanced person who does her homework. My assumption is that you already have a residential home and other investments. In addition to that you want to become a landlord.

Some of the negatives are already stated. Here are few additional points to consider: Would like to be a landlord? Can you respond to calls at odd time on plumbing? Condo management only manages outside stuff or charges heavily if internal maintenance is involved. Managing one condo is sometimes inefficient but people buy multiple condos to spread the cost among many properties. If someone in your family is handy and can find to solve routine problems on a regular basis, it will help reduce costs.

Do the financial analysis. Expect to have short periods of empty house. Keep reserve for major expenses.

Positives: This is probably a good time in a thriving city (as opposed to a city like Detroit) and in a good locality to buy rental property. Rents are creeping up and demand for rental property in the right areas is going up. Since it is a rental, monthly payments should cover most , if not all of the mortgage payments. If you wait long enough (several years) property values will go up again.

If you have the stomach to become a landlord and are will to expand your properties to a reasonable number, go for it.

by sambarvada Thu Jul 14, 2011 10:26 pm

===> What if the renter trashes your property?

You will end up spending tens of thousands of dollars fixing the damage.

by Kris Thu Jul 14, 2011 10:36 pm

kinnera wrote:3-4 bedroom condos, built between 2004-2006, come under great, award winning school district, within walkable distance to shopping, dining and high school. Great location! Easy to rent. Rents are around $1400/m, including the maintenance which I think is around $150/m. Price of the homes ( 3 of them in the market now) between $175-185k. They were bought at $250-260 in the hay days. Thinking of putting 5-10% down, 30 yr mortgage and paying the mort with the rents. Good idea? What do you all think?

>>>> Location, location, location... If this is a town or part of town that has upside potential (say within the next 3 years + 35%+ equity appreciation) and you have at least break-even cash flow, not a bad way to go. I would factor in the cost of a management company monthly, so they can deal with the tenants. At that price range, this would pretty much amount to peanuts and is worth it If you don't see the appreciation potential, pass on this. Alternatively, look for bank owned properties that may be cheaper where the appreciation potential is more.

by pravalika nanda Thu Jul 14, 2011 11:49 pm

kinnera wrote:3-4 bedroom condos, built between 2004-2006, come under great, award winning school district, within walkable distance to shopping, dining and high school. Great location! Easy to rent. Rents are around $1400/m, including the maintenance which I think is around $150/m. Price of the homes ( 3 of them in the market now) between $175-185k. They were bought at $250-260 in the hay days. Thinking of putting 5-10% down, 30 yr mortgage and paying the mort with the rents. Good idea? What do you all think?

where in america are things priced like that???? the people at cnbc think that the housing market will take 5yrs to recover, i forgot who said that though. yes, i would invest in apts. easy money if you have reliabel tenants.

by pravalika nanda Thu Jul 14, 2011 11:50 pm

sambarvada wrote:===> What if the renter trashes your property?

You will end up spending tens of thousands of dollars fixing the damage.

no, you're supposed to get a lawayer and sue them for the damage.

by pravalika nanda Fri Jul 15, 2011 12:01 am

truthbetold wrote:Kinnera,

Based on your posts I am assuming you are a balanced person

** she is also a reddy female. she has to have something lucrative to do or she will be bored. i think indian people should be very active in real estate.
** tbt is right, with so few people with jobs, not many want to buy homes and they will want to rent. at the same time they cannot afford to pay high rents (so you'll have to keep your rents low).

who does her homework. My assumption is that you already have a residential home and other investments. In addition to that you want to become a landlord.

Some of the negatives are already stated. Here are few additional points to consider: Would like to be a landlord? Can you respond to calls at odd time on plumbing? Condo management only manages outside stuff or charges heavily if internal maintenance is involved. Managing one condo is sometimes inefficient but people buy multiple condos to spread the cost among many properties. If someone in your family is handy and can find to solve routine problems on a regular basis, it will help reduce costs.

Do the financial analysis. Expect to have short periods of empty house. Keep reserve for major expenses.

Positives: This is probably a good time in a thriving city (as opposed to a city like Detroit) and in a good locality to buy rental property. Rents are creeping up and demand for rental property in the right areas is going up. Since it is a rental, monthly payments should cover most , if not all of the mortgage payments. If you wait long enough (several years) property values will go up again.

If you have the stomach to become a landlord and are will to expand your properties to a reasonable number, go for it.

by Guest Fri Jul 15, 2011 11:22 am

Lawyers, reckless tenants, being a landlord, all head aches. Unless you are very young stay away from stress.

by harharmahadev Fri Jul 15, 2011 11:26 am

kinnera wrote:3-4 bedroom condos, built between 2004-2006, come under great, award winning school district, within walkable distance to shopping, dining and high school. Great location! Easy to rent. Rents are around $1400/m, including the maintenance which I think is around $150/m. Price of the homes ( 3 of them in the market now) between $175-185k. They were bought at $250-260 in the hay days. Thinking of putting 5-10% down, 30 yr mortgage and paying the mort with the rents. Good idea? What do you all think?

Put your $20,000 in NLY. It is yielding close to 15%,so that's $3000. You don't have to worry about paperwork, maintaining the property and other stuff. Plus, you remain liquid at all times. That's probably your best bet at this point.

by Guest Sat Jul 16, 2011 1:51 pm

Thanks to everyone for the valuable feedback. I really appreciate it. Yes, I've noted your opinions and seriously weighing in all the positives and negatives, being very cautious and also considering other options. Thanks again for your time in replying to my post.

by Guest Sat Jul 16, 2011 1:56 pm

kinnera wrote:Thanks to everyone for the valuable feedback. I really appreciate it. Yes, I've noted your opinions and seriously weighing in all the positives and negatives, being very cautious and also considering other options. Thanks again for your time in replying to my post.

Most welcome. Any other Qs?

by Guest Sat Jul 16, 2011 2:03 pm

None, right now. I'm too confused for any other Qs Smile

. No, I'm seriously weighing other options too and haven't made up mind still. I guess I'll have further questions once my thoughts get more concrete.

by Guest Sat Jul 16, 2011 4:52 pm

Were you planning to buy the property to own or to rent? Just asking.

by Guest Sat Jul 16, 2011 5:07 pm

Priya wrote:Were you planning to buy the property to own or to rent? Just asking.

To rent and own it eventually or sell it when the real estate values go up. We already have an independent home that we live in. This will be the second home.

by Guest Sat Jul 16, 2011 5:09 pm

Oh you want it as an investment?

by Guest Sat Jul 16, 2011 5:10 pm

yeah, that's right.

by Guest Sat Jul 16, 2011 5:13 pm

It is the buyers market and renters too. I'd give it a shot. Hope you find good tenants.

by Guest Sat Jul 16, 2011 5:19 pm

Priya wrote:It is the buyers market and renters too. I'd give it a shot. Hope you find good tenants.

Yeah. That's why we (my husband and I) are tempted. But, we're treading carefully.

by Guest Sat Jul 16, 2011 5:25 pm

Recite the Gayatri mantra and you will make the right decision. All the best. Very Happy

by Guest Sat Jul 16, 2011 5:33 pm

Priya wrote:Recite the Gayatri mantra and you will make the right decision. All the best.

I believe that. Decluttering the mind of almost all thoughts and calming it will help us make the right decision. Gayatri mantra may help with that. Thanks Smile

.

by Guest Sat Jul 16, 2011 5:36 pm

It works for me. An invisible hand guides me with making the right move when I am debating with an issue. Should I or should I not.. listen to your voice inside.

by Guest Sat Jul 16, 2011 5:42 pm

Priya wrote:It works for me. An invisible hand guides me with making the right move when I am debating with an issue. Should I or should I not.. listen to your voice inside.

I believe ya. I need to calm down to listen to my intuition/inner voice. I'm listening to Gayatri mantra (and reciting along) on youtube. Pretty calming!

by Guest Sun Jul 17, 2011 11:04 am

Of all the mantras, gayatri is the most abused and trivialized.

by Hellsangel Sun Jul 17, 2011 11:11 am

nutmeg wrote:Of all the mantras, gayatri is the most abused and trivialized.

Was she abused as a child too?

by Guest Sun Jul 17, 2011 11:36 am

dont be tiresome. Puns are the lowest form of humor.

by Hellsangel Sun Jul 17, 2011 11:58 am

nutmeg wrote:dont be tiresome. Puns are the lowest form of humor.

Said the unfun girl.

by Propagandhi711 Sun Jul 17, 2011 12:01 pm

old ladies are no fun unlike spring chicken chasing krips

by Guest Sun Jul 17, 2011 1:24 pm

Propagandhi711 wrote:old ladies are no fun unlike spring chicken chasing krips

Feeling jealous? That's life. Laughing

by Guest Sun Jul 17, 2011 1:26 pm

nutmeg wrote:Of all the mantras, gayatri is the most abused and trivialized.

I wonder by whom? Could be You? Question

?

by Mr. T Sun Jul 17, 2011 1:32 pm

kinnera wrote:
Priya wrote:It is the buyers market and renters too. I'd give it a shot. Hope you find good tenants.

Yeah. That's why we (my husband and I) are tempted. But, we're treading carefully.

If you are thinking of renting it out, here is a small real life experience...

One fine morning, a lady and a kid ring our bell. Thinking it was girls scout we open the door and they had the strangest request, my daughter want to go potty can she use your bathroom ? We then learn that they are the owners of the house right in front of ours which they had rented out. The occupant had not paid the rent for 4 months and finally when they evicted him, they also learned he had not been paying the electricity bill or the water bill. Four month of not paying the water bill still using the bathroom facilities, imagine the state..

With that lovely thought, i will leave you to your decision.

by Guest Sun Jul 17, 2011 1:41 pm

Kinn, don't let T discourage you. This happens once in a while. More over what's wrong with the girl using the potty? Did the landlord shut off their water too? Shocked

by Mr. T Sun Jul 17, 2011 1:43 pm

Priya wrote:Kinn, don't let T discourage you. This happens once in a while. More over what's wrong with the girl using the potty? Did the landlord shut off their water too?

Oye, it WAS the landlords kid. The had come down to clean up the house after evicting him. Imagine the state of the toilet being used for such a long time without water.

by Guest Sun Jul 17, 2011 1:48 pm

Be good to your landlord? Nice. See Kinn, you can get good tenants like T?

by Guest Sun Jul 17, 2011 1:49 pm

see you folks later. Got house work to do. Bye

by Guest Sun Jul 17, 2011 11:26 pm

Priya wrote:
nutmeg wrote:Of all the mantras, gayatri is the most abused and trivialized.
I wonder by whom? Could be You? ?

jeez! the idiot brigade

by SomeProfile Tue Jul 19, 2011 3:11 am

Priya wrote:It works for me. An invisible hand guides me with making the right move when I am debating with an issue. Should I or should I not.. listen to your voice inside.

Is that how you decided to finally start posting on this forum? Gawd...

by Guest Tue Jul 19, 2011 11:59 am

SomeProfile wrote:
Priya wrote:It works for me. An invisible hand guides me with making the right move when I am debating with an issue. Should I or should I not.. listen to your voice inside.

Is that how you decided to finally start posting on this forum? Gawd...

When she asked herself - the "invisible hand" was busy choking the "voice inside". She mistook silence from the "voice inside" to mean "start posting"...

Or something like that... Very Happy

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