Rental Properties?

[jennipurrr]

When I was reading your update, I was going to say Ditch the Realtor! But, then you did We bought our house (that we live in) with a family friend as the realtor...when we started considering investment properties it was just so hard with her, so we switched to someone knowledgeable in the field. It was like night and day! She actually helped us (walked us through all the pitfalls, due diligence) buy a foreclosure at the courthouse and didn't even make any money...so one day if we buy of the MLS we will use the same realtor for sure.

[Merski]

A Tip from the show Income Property-get someone to check the inside of the car of the prospective renter to get a feeling for how they might care for your property. I thought this was simply brilliant as most of my friends' car interiors reflect their living spaces! Also if there's a basement consider putting in a washer and dryer and folding table and good lighting with some storage underneath for both tenants.

[fidgiegirl]

@ Merski, makes total sense! I love Income Property. That is actually what got us going on this whole thing.
@ jenipurr, I always felt that was the better business approach long-term. Maybe Realtor #1 would get her commission now, but we wouldn't come back to us. I'd think it would pay off over the long run to be like your realtor, because business will keep on coming back to you.

Now today I talked with the new realtor and am equally perplexed. It was kind of a weird conversation where in one breath she was warning us not to do it and in the next breath saying things like "the rich of tomorrow are buying properties today." I will be calling the friend who referred us to see if this is just kind of how she operates, or what. We had about a 20 minute conversation and really, most of the time she was just talking at me. Very few questions. I was very surprised. I've spoken with her in the past and found the conversations very informative but today I am now even more confused. We are going to meet her in person, though, and perhaps that will be better. I didn't even get to chat with her about the specific property I mentioned above.

It was like she wanted to just say, "Now isn't a good time to get into this," but couldn't bring herself to say it. Or maybe the underlying message was, "proceed with caution," or "go for it." Seriously. Any one of those could have been the underlying message. Maybe when we meet on Thursday I need to just say that I was kind of confused by our conversation and is this is a good time to be trying to do this or not?

[iris lily]

It really worries me that you are going to let a real estate agent guide you as to if this is a good time or not.

You've got to do your own research, find out what rents are in the area that you are thinking of buying, find out what income properties are for sale in the area you have targeted, and why they are for sale. IF it's such a good idea why are owners selling their income properties?.

[fidgiegirl]

It really worries me that you are going to let a real estate agent guide you as to if this is a good time or not.

You've got to do your own research, find out what rents are in the area that you are thinking of buying, find out what income properties are for sale in the area you have targeted, and why they are for sale. IF it's such a good idea why are owners selling their income properties?.

I agree, and probably worded my concern wrong. We ARE doing research, and have spoken with people, but I just meant what was she getting at? What was she really trying to say? We won't be deciding solely based on her, that's for sure!

[iris lily]

I agree, and probably worded my concern wrong. We ARE doing research, and have spoken with people, but I just meant what was she getting at? What was she really trying to say? We won't be deciding solely based on her, that's for sure!

It's impossible for any of us to know what went on in your conversation with her, but in the end, I'd look for someone who can provide clear communications.

[fidgiegirl]

It's impossible for any of us to know what went on in your conversation with her, but in the end, I'd look for someone who can provide clear communications.

Well, it's definitely a consideration. I was feeling very confident that we would work with this realtor. Now I reserve judgment until we meet her in person.

I was thinking some more about it. One thing she kept saying was something along the lines of "If it were that easy, everyone would be doing it." But there is another side to that argument. If it is not worth doing at all, no one would be doing it.

We remain on the quest. Just adding another layer to our research.

In debriefing the conversation further with my husband, we think she may have been concerned/confused about our financial situation and that may have been where her weirdness was coming from. Hopefully we will all become clear when we meet face-to-face.

[rodeosweetheart]

I looked at the duplex and it seems very nice and in nice shape from the photos. Iguess the attic would be appealing to university students or a single worker--are these rents in line with your neighborhood? How is the rental history? does the differential for the bigger apartment seem right--I am thinking there would be more difference between the attic and the lower floor?

Is the deck for the lower floor only? How does the yard work out in a situation like that, where you have two renters (not owner occupied and one renter). I am thinking about shared yard space and how that plays out.

What about utilities? How do they get divided, and what are they where you live? Would you factor them into the rent and pay them for the renter?

I have heard people say that they should be able to sell an older income property for seven times the gross amount. If this grosses 1475, then 12 times that is 17700, times 7 is 123900. So the price is higher on this one. (I have NO experience in this, I am just thinking it out from what I have read and heard, and trying to do the math along with you, since I have thought about doing this, too!)

Now on the realtor, I don't think she's the one if you are already feeling confused about her message. What she may be saying is that she doesn't think you can afford it, and it would be awful if you got snookered in to doing something to show that you can afford it-- (I have done this on occasion and been real sorry). Or she may think the price is too high on this duplex, or did you talk to her about this one yet?

If she says that the rich of tomorrow are buying today, then she is hinting (I think) that you're going to have a hard time making the math work now but you will get your money back in the long run with appreciation. Since you seem to be motivated by income stream, this does not seem in line with what you want.

Anywho, those are my very random thoughts to add to the mix.

I really, really respect you for figuring out you don't want to go the owner occupant route. I have exactly the same thoughts as you re the dog issue and sharing a yard. But I have bought the last four houses now because I wanted a yard for my dogs--these are the most expensive dogs in the world, I think.

[fidgiegirl]

I looked at the duplex and it seems very nice and in nice shape from the photos. Iguess the attic would be appealing to university students or a single worker--are these rents in line with your neighborhood? How is the rental history? does the differential for the bigger apartment seem right--I am thinking there would be more difference between the attic and the lower floor?

Is the deck for the lower floor only? How does the yard work out in a situation like that, where you have two renters (not owner occupied and one renter). I am thinking about shared yard space and how that plays out.

What about utilities? How do they get divided, and what are they where you live? Would you factor them into the rent and pay them for the renter?

I have heard people say that they should be able to sell an older income property for seven times the gross amount. If this grosses 1475, then 12 times that is 17700, times 7 is 123900. So the price is higher on this one. (I have NO experience in this, I am just thinking it out from what I have read and heard, and trying to do the math along with you, since I have thought about doing this, too!)

Now on the realtor, I don't think she's the one if you are already feeling confused about her message. What she may be saying is that she doesn't think you can afford it, and it would be awful if you got snookered in to doing something to show that you can afford it-- (I have done this on occasion and been real sorry). Or she may think the price is too high on this duplex, or did you talk to her about this one yet?

If she says that the rich of tomorrow are buying today, then she is hinting (I think) that you're going to have a hard time making the math work now but you will get your money back in the long run with appreciation. Since you seem to be motivated by income stream, this does not seem in line with what you want.

Anywho, those are my very random thoughts to add to the mix.

I really, really respect you for figuring out you don't want to go the owner occupant route. I have exactly the same thoughts as you re the dog issue and sharing a yard. But I have bought the last four houses now because I wanted a yard for my dogs--these are the most expensive dogs in the world, I think.

Golden Doggies:

Rents: I think they are actually low, but we haven't yet done a huge analysis of rents. It's just my anecdotal knowledge from my renting days. The one unit is a 2BR while the other is a 1BR so it makes sense that it costs more. I don't know about the deck, or the rental history. I want to know all these things, particularly the rental history. What if there is a high vacancy rate? Why would that be? I don't even know how we find that out? Just trust the owner to tell us the truth? Hmmm . . .

We had gotten a book from the library and returned it when we weren't using it, but I think I will get it again - Buy It, Rent It, Profit. Seemed like complete information but in lay terms and no-nonsense.

I appreciate your insight and everyone's. You help us think critically through this huge idea.

[fidgiegirl]

We met with the new realtor today and feel much better about it. She is much more our style than the first person and she is very knowledgeable. We also met with her financing person who was willing to run numbers on all our scenarios. Both were straightforward, matter-of-fact, and know what they are doing. We are pleased.

Also as a result of this we found out that we have an opportunity to refinance our current mortgage for 1.5% less and no closing costs, so we are going to do that. Even if we do nothing else, we will benefit from doing that.

We are going to see the duplex I posted above on Monday. We shall see!