Anyone own rental property

[allvol90]

I’ve dug back a few pages in here and didn’t see a page on this.

Anyone in here own any rentals? Vacation, STR or LTR. I’m trying to get a little skin in the game for years down the road. So far I’ve got a 2 unit 2 bed 1 bath duplex and getting ready to close on a remodeld double wide. I’m looking for any tips, tricks, or general advice that one may be willing to share.

 

[BigOrangeMojo]

@McDad

 

[McDad]

I’ve dug back a few pages in here and didn’t see a page on this.

Anyone in here own any rentals? Vacation, STR or LTR. I’m trying to get a little skin in the game for years down the road. So far I’ve got a 2 unit 2 bed 1 bath duplex and getting ready to close on a remodeld double wide. I’m looking for any tips, tricks, or general advice that one may be willing to share.

I have a few. All residential single and multi family.

Happy to give feedback.

 

[hog88]

IMO since we own both STR and LTR, stay away from STRs unless you plan on marketing them relentlessly or you just don't need the revenue. We own 1 STR and manage 4 more, my wife works them daily to keep them rented.

 

[allvol90]

I have a few. All residential single and multi family.

Happy to give feedback.

I would love any advice you have to offer.

 

[allvol90]

IMO since we own both STR and LTR, stay away from STRs unless you plan on marketing them relentlessly or you just don't need the revenue. We own 1 STR and manage 4 more, my wife works them daily to keep them rented.

I have thought very hard about dipping into the STR market but I’m completely clueless on marketing. Was thinking about beach condos but I’ve read so much good and bad on them

 

[ButchPlz]

IMO since we own both STR and LTR, stay away from STRs unless you plan on marketing them relentlessly or you just don't need the revenue. We own 1 STR and manage 4 more, my wife works them daily to keep them rented.

We've got one place we own in Peru and one in SW Virginia, we're trying to decide what to do with them. Our eventual goal is to fully split our time (6 months/year in Peru, 6 months/year in the US) and the best thing we can think of, at least for the US one, is letting it be used as a mid-term rental for nurses or traveling therapists or something. We really don't need the cash, so I don't mind leaving them empty or letting family and friends use them whenever, but leaving homes empty like that can be bad for them too. Any experience doing the travel nurse rental thing?

PS: my wife used to work with someone that managed AirBnBs too and it was absolutely miserable, plus the destruction people would leave behind....yuck. I'd happily take less income for more peace in that regard.

 

[McDad]

I would love any advice you have to offer.

Please don't take what I say the wrong way but your ask is way too open ended. There are entire sections of libraries devoted to all the facets of renting real estate. There's no way I could give some generic boiler plate pearls of wisdom and be relevant to what your needs are and/or be accurate given your unique set of circumstances.

If you can narrow what advice you are wanting right now as specifically as possible, I am happy to offer experience (if I have any).

 

[hog88]

We've got one place we own in Peru and one in SW Virginia, we're trying to decide what to do with them. Our eventual goal is to fully split our time (6 months/year in Peru, 6 months/year in the US) and the best thing we can think of, at least for the US one, is letting it be used as a mid-term rental for nurses or traveling therapists or something. We really don't need the cash, so I don't mind leaving them empty or letting family and friends use them whenever, but leaving homes empty like that can be bad for them too. Any experience doing the travel nurse rental thing?

PS: my wife used to work with someone that managed AirBnBs too and it was absolutely miserable, plus the destruction people would leave behind....yuck. I'd happily take less income for more peace in that regard.

Last winter into spring we had a couple rent ours for a couple months, one of them was a travel nurse. That worked out well, my wife has looked into marketing to the services but the drawback is the renters typically want reduced rates in exchange for the longer term and if they book during the prime season it can screw you. Of course we have beach condos so from spring break until fall break is when you make your dollars and that wouldn't be applicable to something in SW VA.

We've been pretty lucky with damage, surprisingly very little. We also have an insurance policy that costs the renter $7 a day that pays for any damage they do. I just don't like the time my wife spends marketing them, she's posting on FB and a couple other sites constantly but it's what it takes if you want to actually turn a profit. If you're just looking to offset expenses you probably wouldn't need to work it so much.

 

[hog88]

I have thought very hard about dipping into the STR market but I’m completely clueless on marketing. Was thinking about beach condos but I’ve read so much good and bad on them

We own and manage beach condos in Ft. Walton, it's a lot of work. Wife uses FB and some other sites to market them, the 3 bedroom beachfronts rent fairly easy and the 2 bedroom bayside condos do Ok but nothing to write home about.

 

[hog88]

My advice on short term rentals is:

If it's something you are planning on retiring to at some point and want to offset mortgage/expenses for a few years go for it.

If you're planning on using it during prime season as your own vacation spot understand that you will lose out on a lot of rentals and probably not break even.

 

[Go aeiou]

Last winter into spring we had a couple rent ours for a couple months, one of them was a travel nurse. That worked out well, my wife has looked into marketing to the services but the drawback is the renters typically want reduced rates in exchange for the longer term and if they book during the prime season it can screw you. Of course we have beach condos so from spring break until fall break is when you make your dollars and that wouldn't be applicable to something in SW VA.

We've been pretty lucky with damage, surprisingly very little. We also have an insurance policy that costs the renter $7 a day that pays for any damage they do. I just don't like the time my wife spends marketing them, she's posting on FB and a couple other sites constantly but it's what it takes if you want to actually turn a profit. If you're just looking to offset expenses you probably wouldn't need to work it so much.

My father had 3 fourplexes in Oak Ridge in the 60s. They were within walking distance of the OR Hospital. Nurses made excellent tenants.
Some others sucked. Some moved in never intending to pay rent. One year he had someone like that, had been trying to get them evicted for 2-3 months. The law showed up to put them out on December 23. He said a little boy who lived there and about 4 years old came up to him and said "Merry Christmas Mr. aeiou". Broke his heart.
At that time almost every residence in town had been built as temporary housing during WW2. Much of that "temporary housing" is still there today and occupied.
I decided there are easier ways to make money.

 

[allvol90]

Please don't take what I say the wrong way but your ask is way too open ended. There are entire sections of libraries devoted to all the facets of renting real estate. There's no way I could give some generic boiler plate pearls of wisdom and be relevant to what your needs are and/or be accurate given your unique set of circumstances.

If you can narrow what advice you are wanting right now as specifically as possible, I am happy to offer experience (if I have any).

For starters what is your income to expense ratio? Do you use the 1% rule or just work the numbers?

I’m fairly young with a couple extra dollars to spend so I’m thinking this may be a good way to possibly build some extra income to hand off to my 2 girls one day.

I’’m pretty well rounded on the tax side of the rentals/ business.

 

[McDad]

For starters what is your income to expense ratio? Do you use the 1% rule or just work the numbers?

I’m fairly young with a couple extra dollars to spend so I’m thinking this may be a good way to possibly build some extra income to hand off to my 2 girls one day.

I’’m pretty well rounded on the tax side of the rentals/ business.

I would gobble up any deal which had both a 50% I/E ratio or better AND met the 1% rule (the OG version that my dad used which is to make 1% in monthly rent compared to FMV).

I cannot find any of those opportunities anymore. So, I aim to average across my portfolio a 30% or better I/E ratio and 1% or better on my total capital invested.

I am a bit more risk tolerant with current purchases because of my very low LTV on half of the portfolio. I know I can be at break even as a worst case on recent purchases if I like the opportunity and still remain liquid overall.

There are times I want to lose money to offset my income taxes, too.

I'm in an aggressive growth phase.

If you don't need the cash flow, I wouldnt let a low I/E ratio deter you. As long as you can cover a vacancy, or a big ticket purchase (like hvac), you can ride the property until rents increase to put you in a stronger position.

Since you are well rounded on the tax side, the second best relationship is with your lender. Make sure you communicate, keep accurate records, be realistic in values and expected rents. If your banker trusts you, that is worth it's weight in gold. The bank still needs to satisfy their regulatory rules but a good banker can make things easy. I like to use both short term lending through my local bank and long term from anyone with the best terms.

If you are too trusting, consider a tenant placement service or property manager. Housing the wrong person is very costly. If you don't use a service, you will need to get very good at your screening asap. The bad ones can smell the new-to-the-business on you and some of them know every trick in the book to not pay and squat.

Golden rules:
1. Never get emotionally invested in a property until your name is on the Deed.
2. Location location location.
3. Do more than paid for.
4. Show sincere appreciation to your great tenants and they will reciprocate.

Hope this helps.

 

[allvol90]

What are you referring too when you say I/E. Income to expenses I’m assuming. Yes I do have a good relationship with my small local bank. The first property we closed easily and within 2 weeks. I’m at 1.4% on the duplex and waiting on closing for the mobile home that is a local property that was was auctioned off via a court ruling and unfortunate circumstances for the folks as I know them personally but I ended up getting the mobile for 77k with a court ordered appraisal that came back at 125k so I’m stuck on trying to sell it in the market we are in and doing a 1033 exchange with a potential to get another multi family unit or keeping it and making it another LTR. I personally can eat a larger expense as I will be financially free next year. I only owe for my wife’s car and my tractor for my farm (schedule F) which has helped me a ton along with the business I’m 50/50 on.

One side of the duplex is remodeled which brings in more than the other. I did tell the current renter back in November that I would like for him to be out at the end of April to remodel his side as well.

How do you find your rentals? Just by scoping the real estate sites? Do you also key in on certain locations? I live in semi rural town 35 miles outside of a larger city.

Have you ever dealt with or thought about section 8?

tried to find how to send a PM to kept the thread from being overloaded but I don’t know how