Register free!

The Green Industry's Resource Center



Reply
 
Thread Tools   Display Modes
  #1  
Old 02-24-2013, 10:09 PM
cutbetterthanyou cutbetterthanyou is offline
LawnSite Bronze Member
 
Join Date: Dec 2006
Location: intheboonies,maryland
Posts: 1,178
rental homes

Not sure if this should be in this section or off topic section, if its wrong please move it . I was wondering if anyone invested in rental homes. As the economy is crappy ,and home values are at a all time low i was considering buying one, or if it works out well more. My thought was investing in low priced hud/section8 type homes.The reason why is low upfront investment, guarantee government check on the first of the month( no chasing money and taking 3 months to get them out for no pay), and honestly low cost of repairs. If they can't take care of the home like a human being, and treat my rental like a animal, i'll fix it like a animal lives in it. I have remodeled most of my home ,and done my up stairs from scratch. I'm no million dollar home builder, but i can do most of the repairs myself and like i said b4 it will not have to be perfect. Anyone have any thoughts? Experience? Is this a profitable business? According to the demographics a 2 bedroom is about 900 a month a 3 is about 1100 . I can buy one with a 30 year mortgage for about 200 a month. I would bank everything except the 200 a month for the first 2-3 years for repairs and overlap in renters, then after 3 years start paying extra to principal.
Reply With Quote
  #2  
Old 02-24-2013, 10:14 PM
alldayrj's Avatar
alldayrj alldayrj is offline
LawnSite Gold Member
 
Join Date: Apr 2012
Location: Long island, NY
Posts: 3,183
Suze orman says you're better off investing. On that note, my dad bought a two family in october and we renovated it. Tenant already has furniture there and is moving in march 1 so i will let you know.
Posted via Mobile Device
Reply With Quote
  #3  
Old 02-24-2013, 10:19 PM
newguy123 newguy123 is offline
LawnSite Bronze Member
 
Join Date: Sep 2012
Posts: 1,051
Investing in Real Estate for cash flow (not capital gains) is probably the safest and smartest choice for investing.

I've contemplated the Section 8...guaranteed check, seems like a good deal. I invest more into middle class homes, which usually indicates someone living there longer.

I would say go for it.
Reply With Quote
  #4  
Old 02-24-2013, 10:21 PM
Holleywood Holleywood is offline
LawnSite Member
 
Join Date: Feb 2013
Location: Grove city Ohio
Posts: 54
I invest in real estate here in Ohio. You learn a lot as you go and you'll have to find what works best for you. I have been buying one every winter to fix up and rent. I would stay away from sec 8. It's just a hassle. I know you think it sound easier but the best thing you can do is find qualified tenants. Do a background / tenant screen before renting to anyone. I use a company that charges $20 to do the search. I then in return charge a $20 non refundable application fee to see if there approved or not. There is good money to be made. Also IMO I would not do a 30 yr loan on a cheaper rental house. I would either do a 10 or 15 yr loan. The payment will not be that much different. If you have any other questions just ask I'd be happy to help.
Reply With Quote
  #5  
Old 02-24-2013, 10:25 PM
alldayrj's Avatar
alldayrj alldayrj is offline
LawnSite Gold Member
 
Join Date: Apr 2012
Location: Long island, NY
Posts: 3,183
X2 on the background check and also credit check. Charging the tenant up front makes sure they are serious. Section 8 brings deadbeats. Hollywoods got it right
Posted via Mobile Device
Reply With Quote
  #6  
Old 02-24-2013, 10:51 PM
camshaft49 camshaft49 is offline
LawnSite Member
 
Join Date: Jan 2013
Location: Louisiana
Posts: 21
I have a buddy who a sec8 rental he does ok with it. He has a old man in his takes pretty good care of it. But I dont think you can screen your tenets. He gets like 875 a month the house is in hood. Other than that the rent is never late and the property taxes are cheap I know there are certain thing you have the do. Then the house is inspected to see it it complies. Also I think if the tenets tare it up the government pays to fix it I believe.
Reply With Quote
  #7  
Old 02-24-2013, 11:03 PM
cutbetterthanyou cutbetterthanyou is offline
LawnSite Bronze Member
 
Join Date: Dec 2006
Location: intheboonies,maryland
Posts: 1,178
Thanks for the advice. The only thing about the middle class is more money for the homes. Here it varys from dumpy section 8 style homes 10-40k ,then it seems to jump up to 80-100k. As for the 30 yr loan my plan was to take it out for 30 to have the cheapest payment possable in case it don't work out well for a few months in the beginning, then later just pay 1/4 or 1/2 my profit to pay it off early. What are prices in your town? Are they around what i just discribed for mine?
Reply With Quote
  #8  
Old 02-24-2013, 11:07 PM
newguy123 newguy123 is offline
LawnSite Bronze Member
 
Join Date: Sep 2012
Posts: 1,051
Quote:
Originally Posted by cutbetterthanyou View Post
Thanks for the advice. The only thing about the middle class is more money for the homes. Here it varys from dumpy section 8 style homes 10-40k ,then it seems to jump up to 80-100k. As for the 30 yr loan my plan was to take it out for 30 to have the cheapest payment possable in case it don't work out well for a few months in the beginning, then later just pay 1/4 or 1/2 my profit to pay it off early. What are prices in your town? Are they around what i just discribed for mine?
In my area you can buy homes in the ghetto for 10-40K, all day long. Some you'll have to work on, others not so much.

Jump up to middle class and it's 100-140's for something halfway decent, not modern, but clean none the less.

I understand your idea with the Section 8...look into all the gov't regulations/requirements and what they do provide you as the landlord. Obviously a guaranteed check every month is an incentive, but there should be other things as well.
Reply With Quote
  #9  
Old 02-25-2013, 12:20 AM
camshaft49 camshaft49 is offline
LawnSite Member
 
Join Date: Jan 2013
Location: Louisiana
Posts: 21
One of the things im looking at is mobile homes man there getting decent money down here for a single wide there getting anywhere from 650 to 900 a month which the investment is smaller in my opinion also I would learn the rental laws in and out because every where is different in our parish if you have your name on any of the utilities you can get bad tenets out quicker in under 30 days where as it could take up to 90 in other places with u paying utilities it kinda looks good like future tenets arent paying as much out of pocket. Also my buddy goes every month and changes the a/c filters so he can look around make sure there is no foul play
Reply With Quote
  #10  
Old 02-25-2013, 12:49 AM
Big C's Avatar
Big C Big C is offline
LawnSite Bronze Member
 
Join Date: Aug 2007
Location: Gonzales, La.
Posts: 1,611
I have 5 properties that I rent....excellent money. Always screen potential tenants ask for proof of income and references from past landlords, get a real estate attorney to write your rental agreements, do not use the generic one from Office Depot or the ones you find online. Protect yourself legally and you will be fine, we use a home warranty on our properties for repairs, we pay a flat fee per year and $60 per service call and it covers all maintenance problems associated with the home.....like every other biz....do your homework before jumping in....Good Luck!
__________________

Chad Clark
225-257-5566
chad@clarkunlimited.com
www.clarkunlimited.com
www.facebook.com/culawns
La. Licensed Landscape Horticulturist
La. Licensed Ornamental & Turf Pesticide Applicator
La. Licensed Irrigation Contractor
Reply With Quote
Reply

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump





Powered by vBulletin® Version 3.8.6
Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.
Copyright ©1998 - 2012, LawnSite.comô - Moose River Media
All times are GMT -4. The time now is 08:12 AM.

Page generated in 0.10106 seconds with 7 queries