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  1. #1
    Join Date
    Nov. 15, 2008
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    Over where it's HI in the middle and round on both ends.
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    229

    Default Does anyone own rental property?

    I just purchased my second rental house this week. I had a pretty good experience with the first foreclosure. It was a 4 acre farm with a big house and a barn. In less than a year my DH and I renovated both the house and barn. I really enjoyed the process. We painted, put down floors and carpet ourselves.
    I hired a management company to find my tenants and collect rent. The young lady is great and I would be afraid to tell her I was late on the rent .
    I am busy now with house number 2 tearing out old carpet and stripping wall paper. It is fun.
    I just wanted to hear about experiences that others have had as landlords, good or bad.
    My mom didn't raise no jellybean salesman!



  2. #2
    Join Date
    Mar. 11, 2012
    Posts
    50

    Default

    I would also love to hear! We just got pre-approved (OMG!!!!) to buy property for the horses (OMG!!!!) and will be keeping our house as a rental until the market picks up a bit. We're pretty nervous about having a rental but if it were all to work out it could be a really good thing later on. I'll be keeping an eye on this thread


    1 members found this post helpful.

  3. #3
    Join Date
    Dec. 4, 2005
    Location
    washington state
    Posts
    6,837

    Default

    I'm all ears too, I am hoping to buy a duplex or triplex in 2015.
    The Knotted Pony

    Proud and upstanding member of the Snort and Blow Clique.


    1 members found this post helpful.

  4. #4
    Join Date
    Jan. 16, 2003
    Location
    Tennessee
    Posts
    2,930

    Default

    We have two rentals and would like to get a third. The first was a trashed foreclosure that required a lot of fix up. The second was a nice condo. Both have been steadily occupied with great renters. It's been fun and I've learned a lot. Much better return on investment than bank interest. Several COTHers have rental properties.
    It's 2014. Do you know where your old horse is?


    1 members found this post helpful.

  5. #5
    Join Date
    Jul. 31, 2007
    Posts
    14,951

    Default

    I want to build a rental empire.

    A financial guru told me, however, that commercial real estate ends up being better in the end... should your empire get large. It's just a scaling thing and a dealing-with-professionals thing that makes commercial space better than the work and unpredictability that comes with single family homes.

    But yesindeedy, buying rental properties worked for my great-grandmother in 1908 or so when she was widowed and had two kids, so I have faith in it.
    The armchair saddler
    Politically Pro-Cat


    2 members found this post helpful.

  6. #6
    Join Date
    Feb. 28, 2006
    Location
    The rocky part of KY
    Posts
    9,189

    Default

    Well, my family had a hodge podge of rental properties over the years and I tend to remember the bad tenants more than the humdrum good payers that rarely moved.

    I recall watching one of those TV programs about RE where the owners had made a choice to buy another house to fit their growing family and rented out their old one because it wasn't selling, then their student tenants moved out and they were wailing about how the place was "trashed".

    Trashed to me means holes in the walls, porcelain sinks and tubs scratched beyond repair, somebody dropped a brick through the toilet tank, broken windows, broken light fixtures, door jambs split by some guy kicking it in, rotten anything because they didn't let maintenance know about a long term leak, anything that is going to take carpenters to fix and cost WAY more than some piddly thousand dollar deposit.
    Junk left behind and needing to replace the carpet and repaint are par for the course. Always buy a place you could stand to live in yourself but decorate it so it is less pretty than tough.
    Courageous Weenie Eventer Wannabe
    Incredible Invisible


    1 members found this post helpful.

  7. #7
    Join Date
    Dec. 27, 1999
    Location
    Midland, NC, USA
    Posts
    7,234

    Default

    We have 3 rental properties. I HATE them. I am constantly chasing people for rent and/or having to throw people out for nonpayment. And no matter how much you charge for deposits it does not nearly cover the unpaid rent and repair/cleanup expense when you have to evict someone. Which takes FOREVER and is a monumental pain in the rear..... At least 2 trips to the courthouse, then sheriff's dept, then a couple to the property.....

    The only good experience (in about ten years of rentals) was when we rented to a dance instructor and his boyfriend. They repainted very tastefully and the apartment was IMMACULATE when they disappeared (without notice or payment, but I called it a win).

    Complicated by the fact that I now do everything myself because if my husband knows we have a vacancy he wants to go in and repaint, retile, recarpet, spend a couple grand and several days in between each set of $500/month tenants who will trash the place and leave owing money. I have never rented a property as nice as the ones we own, but he wants them ready in case The Donald decides to go slumming!

    Jennifer


    1 members found this post helpful.

  8. #8
    Join Date
    Apr. 2, 2003
    Posts
    4,676

    Default

    I've got 2 right now:

    #1 a condo that was my primary residence and I couldn't take a bath on when the market fell-- rented to break even on mortgage + condo fee so at least it isn't costing me anything.

    #2 is a duplex, but a bit of a nontraditional one. It is a huge colonial that was split upper floor/lower floor and each apartment is ~1600 sq ft. I have a tenant in the downstairs and my mom living in the upstairs for the $300 extra left over on the mortgage+taxes that isn't covered by the tenant.

    So, neither earn me $$ right now and I intend to unload the condo but I am keeping the duplex. I expect it to bring me $3000/mo once my mom moves to a retirement community as the mortgage is about 2 yrs from being paid off on that one.

    I think both of these work because they are in a city and rents are not cheap-- condo rents for $1400/mo (includes some utilities that come with my condo fee) and the lower floor of the duplex rents for $1600/mo.


    1 members found this post helpful.

  9. #9
    Join Date
    Nov. 15, 2008
    Location
    Over where it's HI in the middle and round on both ends.
    Posts
    229

    Default

    Glad to hear from everyone. My property manager told me that homes that rent for more than 600 dollars a month tend to attract better tennants. I did my research and found a company that had only 3 evictions from 60 total units last year. They do criminal background checks on all tennants. No felonies, drug or domestic violence allowed.
    I looked for a long time to find my second rental. It was a foreclosure in a nice area in town with city water and sewer. My manager is desperate for a home in that town, she has a line of people looking. In my area this is a great time for rentals. I plan to sell mine in about 5 years when the market recovers.
    I don't think I would do this without a property manager. Well worth the 9% a month I am charged.
    My mom didn't raise no jellybean salesman!



  10. #10
    Join Date
    Mar. 19, 2004
    Location
    Earlysville, VA
    Posts
    2,152

    Default

    We had two rental properties for a number of years.

    I think if you have enough extra to have a property manager of some sort it maybe works out well. However, in our case we managed our own and it was nothing but a headache. When you have a good tenants it works well. However, like what happened to us in the later years, not so much. Between folks who don't pay, trash the placed, etc. . . .

    The only up side was that we had them long enough that we made decent profit when we sold them both.
    \"Tomorrow is a new day with no mistakes in it.\" Anne of Green Gables


    1 members found this post helpful.

  11. #11
    Join Date
    Oct. 12, 2005
    Location
    Va
    Posts
    2,864

    Default

    We had 2 for about 10 years. Had good and bad tenants. Managed myself which I'd never do again. One particular pita tenant...wanted to drill hole in floor for tv cable in a different room that it was wired for. Uh no, wanted to add a screen door to the front entrance, uh no, called constantly wanting me to pay for niceties that I didn't even have in the house I was livimg in. Air conditioner went down during a heat wave and I called the repairman as soon as he reported it, (along with countless others) so we weren't exactly first on their call list. He called later in the day and my daughter answered and he was totally screaming at her over the phone. One couple with baby boy weren't too good at potty training, he peed wverywhere on everything, total yuck. tenants cats scratched huge holes in the carpet and also scratched up several doors. Hardwood floors with huge gouges in them that a simple sanding refinishing couldn't repair. Damage deposits seldom cover the amount of money for cleanimg and repairs. I would never do it again, especially not the management part of it.


    1 members found this post helpful.

  12. #12
    Join Date
    Feb. 28, 2006
    Location
    The rocky part of KY
    Posts
    9,189

    Default

    There's ways to make things easier for yourself - I look at this double wide and they've used lots of cheap short cuts - for an example the front dor has a vinyl threshold/entry area, it isn't just carpet straight to the door. It has dark green very short cut pile, you can see the stuff we bring in on our shoes easily but not stains, so vacuuming cleans it up. We used to go with something I'd seen in a house I myself had rented, a textured dark splotchy carpet - not high end and not real pretty but it never looked really bad either, spills disappeared. We used to go to the thrift store for old curtains, I like providing blinds but if there are pets the blinds, metal OR vinyl will get bent up and look tacky fast. I didn't like to leave the windows untreated because some folks don't mind a bedsheet and I do, we always wanted our places to not scream rental from the outside.

    One of the best (worst ) stories was when mom had finally gotten tired of managing and hired the million dollar RE guy - those were his ads, he'd made the million dollar club in commissions by being a good salesperson, BUT his rental management business was a bit new. He rented out our house near the JC to a guy who turned around, bought a camper and parked it in the driveway and sublet the house for $200 more than my mom's rent, which made my mom FURIOUS. The neighbor's b!tched to the city about this guy living in a camper in the driveway, but the whole mess got to be cleaned up by the management co - the eviction process, the city violations etc.. One of those stories you didn't know whether to laugh or cry.


    All in all I think the family made more money by selling the houses after they had appreciated using other people's money to fund their mortgages. I think at best we broke even on the day to day, the tax benefits were nice but the accountant cost money, they got out and invested in other vehicles not too long after the management fiasco because they were retiring and obviously a management co couldn't handle tenants either.
    Courageous Weenie Eventer Wannabe
    Incredible Invisible



  13. #13
    Join Date
    Sep. 25, 2003
    Posts
    1,038

    Default

    We became landlords for the first time in 1996 and had four houses at one time. The net profit on those houses paid the mortgage on our home during the height of the market. We downsized to two houses, made a good profit on the sale of them and then the market crashed. Our rents didn't quite cover the mortgages so we had several years of losses.

    Now our rental and real estate market is hot, hot, hot again and we've been back in the black for two years. By the time we retire, both rentals will be paid off and that income should supplement our retirement well.

    We're managed them ourselves with the exception of one brief period where we tried a management company. What a disaster! Instead of chasing down rent from renters, we were chasing down the management company for our money.

    Being a landlord has been the easiest thing in the world with good tenants and a colossal PITA with bad tenants. When we have good tenants, we will do almost anything to keep them. We only raise rent when our taxes or insurance goes up, make improvements to the house if it isn't too costly and respond quickly to any problems.

    We installed cheap laminate flooring and that was the best thing we ever did. I agree with the person that said you tend to get better quality tenants with a little higher rent. I also think single family homes tend to attract renters that are more stable. One of our houses has had the same family for 5 years now.

    I could share several horror stories to scare you but I'll just tell this one. I made a huge mistake and rented to three young men. They seemed nice and I met their mothers and felt sorry for them because no one would rent to them. Duh.

    It was a Super Bowl Sunday and I had a call at home from the local police department. There was a noise complaint and when they showed up, there were 100 people in the house. This is a little ranch house with 1000 sf per floor. There were naked girls running around and the place was trashed. I told the officer to arrest those SOBs.

    Long story short, we went to take the house back over after getting our eviction paperwork in order and found a couple with a baby living in the house. There was no water (they hadn't paid the bill so it was shut off) and no electric. They had used the toilets without flushing (obviously) and the place reeked. We tossed those squatters out and hired a professional cleaning company to take care of the filth.

    One of the renters called me to apologize later and I told him he should be ashamed of himself and I should tell his mother what happened.

    Colorado has decent landlord laws and a fairly easy eviction process. That's huge. I would not be a landlord in a state with lax laws.
    "Crazy is just another point of view" Sonia Dada

    www.longhopes.org


    1 members found this post helpful.

  14. #14
    Join Date
    Apr. 2, 2003
    Posts
    4,676

    Default

    I should add that both of my places were rented by a realtor, who knew the tenants and had been working with them for some time-- and both tenants that I currently have (my mom excepted, of course) are 2 young single professionals. I am not sure I would do a family, and neither rental allows pets. This is a city, so that is not as uncommon as a place out in the country.

    Our current home may become a rental when we buy up soon-- but it would definitely be a family here and I am not sure how I will feel about that.



  15. #15
    Join Date
    Dec. 31, 2000
    Location
    El Paso, TX
    Posts
    12,273

    Default

    My husband and I have 11 rentals...all single family homes except for 1 duplex. I manage them myself. I'm a Realtor, but have found that most property mgmt. companies are not as discriminating about who they rent to, as I am.

    I have potential renters meet me at the house, so I can get a feel for them, and talk to them. If they are interested, I have them go on www.mysmartmove.com and fill out Credit app. They pay 35.00 a person, and I require that all adults over 18 fill out app for credit ck and criminal background ck.

    Then I get their references and cross ck landlord name/address with the city tax records to make sure I am actually talking to the owner of the home they rented prior. And I call all references, verifying ph #'s with actual owner name.

    I do not rent to people that are not a couple, or married. I will rent to an individual, but not for example, 3 college students. I don't want a bunch of partying or people that can't afford the rent if one leaves. All adults in home must be on lease (for instance, if married, both people, even if only one is working.). There is a very good reason for that.

    I allow all breeds/sizes of pets as long as they are over 8 months of age, spayed/neutered, vaccinated and housebroken. I do not allow outside only dogs. I install storm doors with doggie doors in all of my rentals, and raise my fencing to at least 5 feet. I also put padlocks on the gates to the backyard. Most homes we have, have tile in all living areas and only the bedrooms have carpet, so if they have a sick dog, they can shut the bedroom doors and keep dog on tile. I don't allow outside only pets, because they tend to bark, bother neighbors, tear up the yard, and are not housebroken, if the owners let them in on occasion. Plus the type of people that would throw a pet outside and leave them there no matter what the weather, are not empathetic towards their own pet, so they aren't going to be to the property owner. I have only had one property damaged and it was before I enacted that rule. Person had 3 dogs, and kept them outdoors except for occasionally, and they trashed carpets/cabinets.

    People that consider their pets as family are more likely to take care of the place, and are usually grateful for a nice place to rent, so they pay well, and stay there.

    I collect rent in person every month, so I can see how place looks and address any concerns right away. For my renters with dogs, I bring Bully sticks for each of them.

    When my places go up for rent, they are immaculate. Baseboards, windows, windowsills etc are all clean. Carpets are cleaned, walls painted in neutral colors, etc. I found that if the place is in great shape and spotless when someone rents it, they are more likely to keep it in good shape. If it's dirty or in disrepair when you rent it to them, they figure that it's ok to not take care of it.

    I won't use a prop mgmt. co, because they don't usually meet the rental prospect, and just pull credit/background. They also will not use as much diligence in making sure reference ph numbers belong to actual prior landlord. Plus they don't ck on prop during lease. And if repairs need to be made, they don't price shop.

    Our rentals are not low end rentals, but not high end either. Avg rent is 900-1500. mo. We provide all appliances, incl refrig w/icemakers.

    I love having rental properties. I usually have them rented out w/in a week of a tenant leaving. So they aren't ever sitting vacant. We are currently trying to buy another 10 rentals, as my DH is in the car business, and there isn't a retirement plan for that job. So the rental income is our retirement plan.


    3 members found this post helpful.

  16. #16
    Join Date
    Jan. 16, 2003
    Location
    Tennessee
    Posts
    2,930

    Default

    We're in year 3 of the first rental, and year 2 of the second one and we have the original tenants in both of them. As Jetsmom mentioned, they are clean, well-maintained and any issues are addressed quickly. Rents are a bit lower than other rentals in the area. We try to make sensible improvements that are good for the renters and for us. For example, when one house needed a new roof, we got the Energy Star certified roofing that cuts down on A/C costs. HVAC units are on maintenance agreements that include and spring and fall tune-up, and no extra charge for weekend or night-time emergency service. We include a washer and dryer in each house and a completely fenced in yard. Only the bedrooms are carpeted, and the rest is tile or laminate. My husband is pretty handy, so we don't use a management company. We do rent to young single guys, but the house that has the two guys is right next door to ours. One is a former Marine, and one is Army Reserve. I feel very well protected.
    It's 2014. Do you know where your old horse is?



  17. #17
    Join Date
    Oct. 26, 2000
    Location
    Tempe, AZ
    Posts
    1,778

    Default

    We have an inadvertent rental property, our 1st home.

    Currently, friends of ours rent it. Their house in the neighborhood sold faster than they expected & before they had a new place in the works. So, this gives them an easy month-to-month situation as they look for their next house.

    And, it pays the mortgage for my DH. The house did sit empty for about a year, which was such a colossal waste.

    I'd like for him to keep it as a rental, as it would be income once the mortgage is paid in full. But, he doesn't want to be a landlord & doesn't really want to hire someone to manage it, either. (I'm not on that mortage, so have no real say in the matter)

    Jetsmom, your post was great!
    ~ Horse Box Lovers Clique ~



  18. #18
    Join Date
    Nov. 15, 2008
    Location
    Over where it's HI in the middle and round on both ends.
    Posts
    229

    Default

    Jetsmom, your post was educational. If I were more experienced I would try to manage my own rentals. I do like my manager. She works for a broker who owns about 50 units mostly duplex and singe family homes in a nice small town. The broker has been helpful pointing out what to look for when buying investment property. I love real estate and even took the courses to get my license some 30 years ago but never did take my tests. If I weren't so busy training racehorses I would go into real estate.
    My mom didn't raise no jellybean salesman!



  19. #19
    Join Date
    Apr. 8, 2005
    Location
    Kentucky
    Posts
    4,330

    Default

    I have been thinking really hard about buying a rental, but I'd probably have to tap my 401K for the down payment to do it. I'm thinking duplex to possibly quad size to reduce vacancy risk, preferably with tenants already in place.

    How does one figure expenses other than debt service? Tax rate is pretty easy, but what about insurance? I'm guessing an insurance agent can't give a ballpark figure without without a zip code and some particulars.

    DH and I are both pretty handy and good at finding building material bargains so most repairs/upgrades would be easy. The management aspect- finding good tenants and the other management aspects- scares me a little.



  20. #20
    Join Date
    Dec. 31, 2000
    Location
    El Paso, TX
    Posts
    12,273

    Default

    Quote Originally Posted by shakeytails View Post
    I have been thinking really hard about buying a rental, but I'd probably have to tap my 401K for the down payment to do it. I'm thinking duplex to possibly quad size to reduce vacancy risk, preferably with tenants already in place.

    How does one figure expenses other than debt service? Tax rate is pretty easy, but what about insurance? I'm guessing an insurance agent can't give a ballpark figure without without a zip code and some particulars.

    DH and I are both pretty handy and good at finding building material bargains so most repairs/upgrades would be easy. The management aspect- finding good tenants and the other management aspects- scares me a little.
    You just get a structure policy and liability, sometimes called a Landlord policy. It doesn't cover personal property. On my leases there is a section that asks if the renter will get their own renter's insurance. I usually talk to them about the need for it since my insurance won't cover their personal property regardless of why they were damaged. Most purchase it, as it's cheap, and even pays for pet boarding/hotel if needed.

    If you allow all breeds of pets, shop around for ins. One of the reasons I require spay/neuter is to reduce liability in event of a dog bite. Also raising fencing and requiring that gates be padlocked. It mitigates my liability if a dog were to ever bite someone. Plus makes it less likely that their dog will get loose and bite someone/fight with another dog or damage someone's property.

    We put new appliances in homes where it looks like the ones that are there are pretty old. It saves money in the long run on service calls.

    Re expenses- If you maintain your properties, it really isn't too bad. Hire handymen that are licensed and guarantee their work. Stress to renters that if they have any problems to contact you. Especially for any leaks. It's easier to fix a small leak rather than have major water damage.

    Duplexes can be ok, but with Quads, you will have a higher turnover since most people eventually want to get a house. At least that's been my experience. Plus you end up with 4 times the chance of neighbors complaining about noise, parking, etc. Usually they are cheaper on rent and the quality of tenant you get is lower.

    Look up Homepath.com and see if there are any Fannie Mae foreclosures in your area. DN pmt for investors is only 10% if you have fewer than 5 financed properties. No PMI. They also do Homepath Renovation loans, where they will let you finance in the repairs.



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