Rental Properties?

[rodeosweetheart]

I did look at the rental duplex--it looks in nice shape inside. I see the taxes are not insubstantial: Tax w/ Assessments: $3,744. ($312/mo) . So with maintainance and taxes you might be at 300-500 dollars a month before you have any money to put into a new mortgage.

I have owned two properties simultaneously and would not want to do it again--I guess I am low stress, and older than you guys. I would not want to endanger current property by taking out money on current home-- but I am very risk averse.

So I guess this might work for you if you wanted to go into the landlord business, but if you go into the landlord business, will you have to involve your current home? Will this make you stressed?

I think if I wanted to do the landlord thing, I would be attracted to a bigger duplex, with a larger half for me to live in. What goal do you think is more important--a larger living space for you guys, or being landlords? I totally understand the income stream idea, because I teach, too, and you are smart to be looking into other incomes!

[fidgiegirl]

Well, that particular duplex has (we think) been purchased. I agree with what you say about being stressed. We are putting some effort into some other ideas at this point and kind of laying low on the rental property thing, though we are not totally giving up on the idea yet. Mainly we need to talk money with someone. We went on vacation and that kind of helped cool us toward the idea a little - we simply didn't think about it.

[fidgiegirl]

We met with a mortgage person tonight and we are floored. If we hang on to our place, we can still go for up to a $300,000 home. If we sell, we could do $500 or more!! We don't want a mortgage that big, but just to be told we can opens up the possibilities. Maybe then we could do a really NICE duplex and owner occupy and not feel like we are giving up anything to get it. Or maybe we can keep our eyes open for another reasonably priced (well, bargain) duplex to get a positive cash flow going, use that to offset the cost of a mortgage on a single family place for ourselves. The possibilities are endless. Not sure how well we will do with endless! But it's still exciting and unreal. Someone would give us half a million dollars? Geez! There are a lot more considerations and costs and amounts of down payments and all that jazz, but we have a lot more information than we had before.

[Zippy]

No one's "giving" you half a million dollars.

[fidgiegirl]

No one's "giving" you half a million dollars.

Touche. But it did feel like it for a few minutes.

[jennipurrr]

We have always been fairly conservative in our borrowing habits and I believe it has been for the best for us. In general, renters aren't looking for a "really nice" place, otherwise they would be owners (I don't necessarily agree with the thought process behind that, but it is the market). Often nicer places have longer vacancy rates compared to decent, nothing fabulous, but cheaper rentals.

[Selah]

We had to move across country suddenly to help my mother-in-law who was suddenly widowed. We left our house, which had tanked in value and was virtually unsellable, in the hands of a property management/rental agency. It took them three months to get a tenant in, despite our offering it as a Section 8 property and at a very competitive price. The tenants have been difficult and started making up lies the minute they got in, paying their rent late, and so on. Please have enough money to carry the mortgage, increased insurance rates, repairs, and a property management company. Make sure the property management company has a good reputation for evicting deadbeats FAST. This house is a chain around our necks that is hard to get rid of! Good luck!

[fidgiegirl]

Well, we carry on in the process of investigating this possibility. One thing we have come to terms with is that we don't want to owner occupy. I just do not feel like I want to share my yard, basically. It seems so dumb, but that's what it is, and I might as well be honest about it. I want to have a dog and not worry about it biting my tenants because they were in the yard, or having to rent to a family (because you can't not) and being worried about the dog biting the kid, or whatever. Whenever I would think about the owner occupy option I just kind of felt like "Oh, we have to do this" accompanied by a pit-in-the-stomach feeling. I am also happy with myself that I asserted myself to express this need, because my DH was really gung-ho on the owner occupy thing.

I wrote that we had a positive meeting with a mortgage company. Well, she obviously contacted the realtor we had been working with because we got a chirpy call not shortly after that. We are not in love with this realtor. We have a bad feeling about her. She is nice on the surface but doesn't really listen to what we are interested. We had inquired earlier about a few properties and I suspect she just wanted us to meet with the finance person before showing us around to them, but she wouldn't just come out and say that, she had to kind of put us off each of the properties - one was "too expensive" (well, turns out it wasn't) and one was "not a desirable property" because it had been on the market for a long time. I would have preferred to be the one to make those decisions, not her. Plus, there is just a feeling we have that we are not at the heart of her best interest - her commission is. So anyway, now it is our turn not to be upfront (realizing very hypocritical here) and we have contacted a different agent. When my husband called the first one back and told her our newest strategy/approach, she kind of pooh-poohed it. We have not signed anything with her.

So we have called the new realtor upon recommendation from our friend, who looked at like 50 properties when he bought, with no pressure from her, and also she has had like 10 rentals of her own so that to me is a valuable perspective to be able to access. Even listening to her voicemail I felt better about working with her than the other realtor.

So on to the latest idea. Our latest idea is to try to obtain a reasonably priced duplex and rent it out. It must make more money than the mortgage right off the bat. And since we learned that any duplex will require a 20% down payment, it has to be probably less than $200,000, more like less than $150,000. The thought is that then with the cash flow available from this property we could, in a year or two, rent out our current house and obtain a larger single-family home.

This is the house we are currently looking at but haven't seen the inside. It is about four blocks from our place. Needs cosmetic work outside for sure and likely inside, but would generate more than the mortgage and is in a desirable area and right on the bus line and within walking distance to all needs.

We are somewhat concerned that the plan wouldn't actually pan out, because, hey, what really does work out exactly as planned? But the thing with the mortgage is that even in the worst case vacancy, we would be able to cover it.

We continue to be interested in this. We are really taking it slow and crunching numbers, well, to the best of our ability, anyway. We are not 100% committed to doing it but still not ready to dismiss it.

[iris lily]

fidgie, that is a very cute house. How much are the rents? Is the attic apartment all one space?

[fidgiegirl]

The upstairs gets 675 and the downstairs gets 800. We think with a spruce up and adding washer/dryer we could get more. The information is so limited that we have - we don't know if there are currently renters, where they got those rent numbers, if there even are washer/dryers, etc.

The attic unit is a one-bedroom.

We really want to get inside and take a peek!