I bought a duplex house over a year ago and I have about $50k in equity my plan was to take some out and buy another place and keep doing this for rentals. But the way **** is going I'm not sure there is a point to try this. I'm 29 and this was my plan I made when I was in the army. My ? Is what would you guys do if you were me.
Rental property can be a real pain in the a$$. If you have good renters that are not tearing the places up, and have some basic emergency preps in place, it's not a bad idea. You are young enough to build up some real wealth with your plan, as long as the S doesn't hit the fan.
Rentals are doing well and will be for the foreseeable future. If you can get really good deals (and right now they are everywhere), you might want to stick to your plan. Here in Illinois they want 30% down on non-owner occupied buildings. They want to make sure that the little guy stays little. I would suggest nothing smaller than a three flat because the cost to income on a two flat will kill you in most states. The main thing is SCREEN YOUR TENANT!!!! I can't stress this enough. Go online. There are dozens of places that, for a fairly low fee, will give you a background check on your tenants. If you want to weed out most losers, illegals, etc., make sure to mention in the ad that you do background checks on prospective tenants. That will stop losers before they show up and give good tenants a feeling that you care about security. Here's a tip that will help a lot, take the rent you plan on charging and divide it by 12. Add the result to the rent you were going to charge anyway. Tell the prospective tenant that if they pay their rent on time each month, they get a month, say December, FREE! This is an incentive to pay on time. If they don't, you get an extra month of rent spread out over the year for your aggravation. If they DO pay on time, you still get what you originally wanted PLUS you have a tenant that thinks you are cool. Hope this helps. Jim
we rented places for a little while around here they get nasty if you screen tenants too hard clean up after eviction, not to mention eviction costs got to be too much, got rid of the rentals wont ever do that again
Thanks for the help. I'll keep it and try renting it out. My mortgage is only $600 which includes the $150 home owner assiociation fee( which is total bs but that's another story) the two other rentals on my street go for $1200 and $1100. I've seen both of them and mine is nicer because my buddy and I have been fixing it up. So I thought I'd rent it out for $950 or so and be real picky about who rents it. After seeing what's happening with my county a part of me just wants to sell the place and buy some land and build a cabin in south western Oregon but we'll see
