Anyone have rental properties? Advice?

[P1]

All the cute TikTok videos sure make it look easy to be in the property rental business, don't they?

Why don't you scoop that property (looks like there are many, many offers so let us know how that $5K down payment works out for you) and report back to us in a year.

[ntg44]

In 2021? In Chicago? Hell no.

Rental properties used to be a worthwhile investment when people had decency and respect for their landlord, and accumulating debt was frowned upon.

Now? They trash your place, stop paying rent, "know their rights," and end up staying long enough for you to sue them for so much unpaid rent that you are basically forced to agree to forgive them in exchange for them vacating the property. The one month security deposit is almost a joke.

Commercial is better, landlord has much more power to evict, but it's harder to find commercial tenants than residential by far.

At least in Illinois/Chicago, I don't know how you make money on rental properties today unless you pay cash for the building so you're generating enough revenue to cover the property taxes and pocket the rest. And even then, there are much less headache free ways to make money that don't consume so much of your time and energy.

[erickonphoenix]

A good friend of mine created her fortune on rental properties. She owns a couple of apartment complexes now but it all started with a duplex and she rented the unit next door.

However, she hacked the system pretty early by getting her real estate license, married a construction contractor who can do maintenance at cost and has a brother thats a finance accountant so he can do the financing. So basically this property empire is a family business now.

Her advice has been to be diligent about book keeping on each property so you know where the money's coming and going. Watch your real estate trends, screen tenants thoroughly and keep a lawyer on retainer and insure your properties well. To do it right it's definitely a full time job.

[Tommy-G]

So heres another perspective:
My wife and I moved to Florida 6 years ago and rented for the 1st year not knowing the neighborhoods and if we would stay.
We loved our neighbors, the house and the neighborhood. There was no real inventory available for purchase beginning of this year. Que up a few months later while other states are still on partial lockdown from COVID and everyone and their sister are moving to Florida. We signed another year. Our owners live in the Netherlands as they moved when their daughters entered college.
I love the freedom of not having to do any maintenance, landscaping, pool upkeep BUT we are not your normal tenant. We treat that home as if we own it.

I'm told regardless of credit and work history right now is a bear to get a mortgage. Apparently back in 2007 and earlier people did exactly what you want to do. Then the market crashed and houses were worth squat. TONS of people ended up foreclosing on their personal homes b/c they used them for 2nd mortgages or as equity to get rental properties.

If you get an inexpensive place with low/inexpensive rent you are going to get those type of people for tenants.
Most people would jump off a bridge if I told you what we pay, but with a current injury and not having to do maintenance this works for me right now.

[infinitekidM2C]

My one advice is to make sure the rental property is insured for your tenants. Don't assume your homeowner's insurance just covers it.

[erickonphoenix]

Originally Posted by TommyG-inFlaNow

So heres another perspective:
My wife and I moved to Florida 6 years ago and rented for the 1st year not knowing the neighborhoods and if we would stay.
We loved our neighbors, the house and the neighborhood. There was no real inventory available for purchase beginning of this year. Que up a few months later while other states are still on partial lockdown from COVID and everyone and their sister are moving to Florida. We signed another year. Our owners live in the Netherlands as they moved when their daughters entered college.
I love the freedom of not having to do any maintenance, landscaping, pool upkeep BUT we are not your normal tenant. We treat that home as if we own it.

I'm told regardless of credit and work history right now is a bear to get a mortgage. Apparently back in 2007 and earlier people did exactly what you want to do. Then the market crashed and houses were worth squat. TONS of people ended up foreclosing on their personal homes b/c they used them for 2nd mortgages or as equity to get rental properties.

If you get an inexpensive place with low/inexpensive rent you are going to get those type of people for tenants.
Most people would jump off a bridge if I told you what we pay, but with a current injury and not having to do maintenance this works for me right now.

I hear that.

The most broke I ever was, was when I owned my first home and I only paid $75k for it. Between property taxes, AC, plumbing, electrical, foundation repair, new roof, insulation, flooring, appliance repairs, animal invasions, new siding, and a kitchen remodel even though I sold it 12 years later for almost $150,000. It was certainly a cash wind fall, but if I added it all up I'm not sure I made that much money on it.

[driftqueen]

Originally Posted by 6oclockshadow

Being a landlord can be a MAJOR PITA, and can be a full time job. The tennant has more rights than you do. Especially now-Tread carefully.

Absolutely agree! As landlords, we don't have much recourse if something goes wrong! Even to evict a non-paying tenant it costs hundreds in legal fees- none of which you can ever recoup!

I think I will look into commercial real estate instead! That tends to be a little more stable.

AND BTW.... GO BRUINS!

[driftqueen]

Originally Posted by infinitekidM2C

My one advice is to make sure the rental property is insured for your tenants. Don't assume your homeowner's insurance just covers it.

I always make the tenants get renter's insurance! Keeps them accountable in some weird way knowing they are paying for it!