investing in rental properties -- any tips or books to recommend?

[Anonymous]

Thinking of buying my first rental property. Can anyone recommend any tips or resources? Thanks!

[Anonymous]

Pay in full with cash.

[Anonymous]

Anonymous wrote:Pay in full with cash.

Thanks warren buffet

[Anonymous]

Paying cash worked for me. I didn't have stress when they were vacant waiting for the next tenant moving in.

[Anonymous]

stfu

[Anonymous]

Thats a lot of cash to lock into an illiquid investment in a low-interest rate environment.

OP, can't recommend any books, but I am interested in the answer.

[Anonymous]

Jealousy isn't becoming.

[Anonymous]

Not the OP but I would be interested in hearing from those who have invested in rental properties in the area (especially recently). We have some money that we would like to invest (about $50K) and our real estate agent is telling us that now is the time to invest in rental properties. Of course, she is a real estate agent so.......

Would love to hear opinions from the savvy investors on DCUM.

[Anonymous]

Look at 2-br condos by the metro lines. Factor in your closing costs, condo fees, taxes, mortgage, and repairs, then see what kind of a tax break it will get you, if any (you are allowed to write off depreciation on the condo, and are able to subtract the resultant rental losses from your income for tax purposes). Look on Craigslist for the going rates for comparable places. See where that leaves you.

[Anonymous]

Bump

[Anonymous]

You should approach this on a cash flow basis and not speculative appreciation. In other words, what is the annual return on investment, after expenses? And the "investment" is the amount of cash you put up to close the deal, not the final sales price if you borrowed. Be conservative in your assumptions about expenses, too. Maintenance, repair, vacancy or worse, a non-paying tenancy. How long does it take to get the latter out in the jurisdiction you are buying in? It can vary considerably between places.

[Anonymous]

I wouldnt suggest a condo (as a condo owner). The fees go up and can deter buyers later esp since new condos are always going up. I would suggest something close to Metro also.

[Anonymous]

Now? With a real estate boom going on?

[Anonymous]

My concern would be the mortgage that you would be left with every month if you only put $50k down. Let's say you find something awesome at $250k, you are still looking at a $200k mortgage. Even at a low 4% interest rate, you are still looking at over $1k/month mortgage if you include taxes, PMI if neccessary, etc. How much rent can you realistically get from somewhere that cost $250k? You have to weigh how much you will make/month from your renter against how much you are paying/month to your mortgage company. Will the amount you make be enough to make it worth your while to deal w/the hassles of being a landlord? I am putting this in terms of month-to-month gains vs long-term gains because I think that the past 5 years have shown that long-term gains re: residential real estate are iffy, especially for amateur investors.

I say this as someone who is renting out one of the two homes that we own. It seemed like an awesome idea at first, but the amount that we pay in mortgage every month on the house that we are renting is VERY close to the amount that we get in rent. So months that things break that I need to fix, or there isn't a tenant in there paying rent (luckily this is very rare) or even the months when the tenant pays late...its not the cash cow I had hoped for. Add to that the hassle of either playing landlord or paying a property management company to handle it for you, and it is honestly just not worth it. Could save some headache and make more money investing otherwise.

[Anonymous]

Anonymous wrote:My concern would be the mortgage that you would be left with every month if you only put $50k down. Let's say you find something awesome at $250k, you are still looking at a $200k mortgage. Even at a low 4% interest rate, you are still looking at over $1k/month mortgage if you include taxes, PMI if neccessary, etc. How much rent can you realistically get from somewhere that cost $250k? You have to weigh how much you will make/month from your renter against how much you are paying/month to your mortgage company. Will the amount you make be enough to make it worth your while to deal w/the hassles of being a landlord? I am putting this in terms of month-to-month gains vs long-term gains because I think that the past 5 years have shown that long-term gains re: residential real estate are iffy, especially for amateur investors.

I say this as someone who is renting out one of the two homes that we own. It seemed like an awesome idea at first, but the amount that we pay in mortgage every month on the house that we are renting is VERY close to the amount that we get in rent. So months that things break that I need to fix, or there isn't a tenant in there paying rent (luckily this is very rare) or even the months when the tenant pays late...its not the cash cow I had hoped for. Add to that the hassle of either playing landlord or paying a property management company to handle it for you, and it is honestly just not worth it. Could save some headache and make more money investing otherwise.

Hi again, something that I forgot to add is that depending on whether you have an outstanding mortgage on your primary residence, you may not get the tax breaks that you are hoping for. Two mortgages does not mean double the tax breaks. Yes, you can deduct all of the costs associated with the ownership and maintenance of the house, but just like any other business you have to offset these losses against the income you are making from the property. Ideally you will be making more income than expenses, therefore really negating tax benefits.

Ask a financial advisor for their recommendation based on your current situation.