Luxury4Play.com banner

1 - 6 of 6 Posts

·
Registered
Joined
·
106 Posts
Discussion Starter #1
How much do you usually spend on rehabbing a house or apt between renters assuming they don't do anything out of the ordinary for damage?

Is it worth starting out renting houses or is it better to get a 12 unit or so building to begin with?

At what point is it worth it to get a management company to run everything? I usually work 60 to 70 hrs a week and want to supplement my income and put 100% of the profits into more property purchases.

I am not planning to live off rental income for quite some time and will continue to put in as many hours as possible until investments and rentals provide enough profits to keep expanding without working my regular gig.

The final question is if anyone has thoughts on buying properties in bad parts of town to demolish and hold the land hoping to see a return 10 plus years down the road if those neighborhoods can get their act together. Houses in these parts of town can be bought for $10,000 or so on reasonably good sized lots. I have no interest in dealing with anyone that would live in that part of town and the houses aren't worth saving.

Any advice, suggestions or cautionary tales would be appreciated.
 

·
Registered
Joined
·
2,792 Posts
first things first....money is subjective upon the property and the area you are dealing with so to ask for a figure will always be subjective. in my opinion it is better to start at what you think youll be able to manage and devote your time to, unless you have the means to hire people to maintain and manage the property regardless if it is a single family home(s) or an apartment building. Start small if you do not have any experience in the field or it could quickly consume all your time and resources.

buy a nice single family or multi family unit that is in a good rental area and preferably does not require a lot of repair off the bat. screening potential clients is also very important to make sure you get someone who is responsible and financially stable. it will reduce your headaches tremendously. also look into your areas laws regarding lease agreements to see what can and cannot be included as responsibilities of the renter.
 

·
Registered
Joined
·
106 Posts
Discussion Starter #3
Being a college town there are a good number of properties for sale that are already occupied and have current inspection certifications from the city. I don't have the time to work on anything or deal with repairs on anything at the moment. Right now I work, sleep, and work on raising my kid while my wife is working and finishing her masters degree.

Time is extremely limited and valuable at the moment.

I would like to just let a company manage it and if that means I only clear a small amount of profit that is just fine. Any money that doesn't require a regular time commitment is great. At this point I'm just trying to see where the monthly profit has to be to offset expenses and repairs.

I'm also trying to weigh the hassle vs the financial upside to make sure it's even worth doing at this point in time.
 

·
Registered
Joined
·
79 Posts
With your schedule this may not be something to get into at the moment. You can always revisit down the line or you can purchase a property/home and sit on it until some time frees up for you.

Property is a good investment but it does need some time dedicated to it albeit not a ton of time, but time nonetheless. College towns are great for this but you need to know who you are renting to. Even the best of tenants have needs on occasion. I know holding off may not be what you want so if you do move forward I would say start small as the first person who replied suggested. Start with a small multi family, screen well, and you should be ok.
 

·
Registered
Joined
·
2,792 Posts
being a college area that means two things....one is that there will likely be a steady supply of tenants available when school is in session. You wil need to learn to negotiate lease agreements because naturally the kids, or likely their parents will not want to pay for an apartment while they arent in school..but that is always negotiable. also, with there being a steady supply of tenants, they again are college kids. they will not have as high of respect for their (your) apartment while in it because they know it is temporary. so...with the good comes the bad but i know people that have been making a steady income off of college apartments.

location is also important because a lot of the of the types of kids who make good tenants are generally the older ones who are more focused on getting their degrees and want to stay away from the party areas around campus. so....ask questions. what are they studying? what year are they in? what degree are they pursuing?

another tip is to not focus strictly on income. do not only worry about turning a profit right off the bat. if you can purchase a property that ATLEAST pays for itself that there is half the battle won. if you can walk away every month and not have it cost you anything...you are already doing well. the money will come.
 

·
Registered
Joined
·
106 Posts
Discussion Starter #6
Thanks to both of you for the advice. It is definitely something I want to pursue in the near future but I want to know as much as I can before making a purchase.

It makes sense that a break even is a win just from the standpoint of paying for a building that can be either sold later or all profit once paid for.

Thanks again.
 
1 - 6 of 6 Posts
Top