Real estate investing question for the real estate gurus?

#1
We just moved back into the area and are currently house hunting. However, I came across a very interesting concept of renting and not owning.

So a little back story, we have had a lot of houses due to my husband's job transfers. I'm really sick of the process. Mostly, I am sick of being the seller. Maybe it's fear of commitment to one house to live in (forever) as I like upgrading and being in new places. Anyway, I work very hard as a nurse and no matter what, it seems like we just always need more money. We have ventured into small business ideas but they are just small change and low ROI. We came across the concept of buying multifamily units (such as a 4 plex) to begin with and from there continue to invest our money into larger complexes if possible. Does anyone on here have experience with the rental market? I heard it's not a good idea to buy single family houses as they may sit vacant for awhile but I also can't seem to find 4 plexes or 2 unit buildings either. I would really appreciate your thoughts and can learn from your experiences!
 

Opus

Silver Member
#2
Don't think you are going to find anything like that in this area. If you do find duplexes, it is going to be in much older parts of the cities. A lot of the homes around here got snatched up by investors after the great recession. I seem to have more renters around me than I do home owners.
 
#3
Thanks for the reply, ugh, that's what I figured. We want to be in an area that attracts renters due to location and units in keeping with current trends, so more of the higher end scale. Since there are not many properties like this available as we thought might be the case, we are thinking about having property to rent such as a single family home but we heard how risky that is compared to multi unit properties. A friend of ours is in a desirable vacation area in FL and has multiple condos she is renting out and they seem to be booked consistently. I have seen them and they are quite outdated but she still gets the bookings. For anyone that has rental properties, can you share your experience and if you would recommend it?
 

Opus

Silver Member
#4
Are you looking for vacationing renters or full time renters? The house rental market seems to be pretty good around here. The couple of people I know that have looked at rental property lately said it was hard to find something to rent. Like I said, a lot of the homes in my area seem to be rental properties and when I see a for rent sign go up it doesn't stay there for very long.
 

MacFrisco

Diamond Member
#6
We just moved back into the area and are currently house hunting. However, I came across a very interesting concept of renting and not owning.

So a little back story, we have had a lot of houses due to my husband's job transfers. I'm really sick of the process. Mostly, I am sick of being the seller. Maybe it's fear of commitment to one house to live in (forever) as I like upgrading and being in new places. Anyway, I work very hard as a nurse and no matter what, it seems like we just always need more money. We have ventured into small business ideas but they are just small change and low ROI. We came across the concept of buying multifamily units (such as a 4 plex) to begin with and from there continue to invest our money into larger complexes if possible. Does anyone on here have experience with the rental market? I heard it's not a good idea to buy single family houses as they may sit vacant for awhile but I also can't seem to find 4 plexes or 2 unit buildings either. I would really appreciate your thoughts and can learn from your experiences!
I rented homes in the San Antonio, Plano, and Allen areas for 20 years, until December 2018. They were all single family homes.

I never had a home go vacant for more than maybe 75 days, and that was usually due to upgrades. Fortunately, I had good renters for 4 to 6 years but mostly for about 2 years at a time. During the 2008 recession prices had to drop a little, but I still made a monthly profit and that is very possible in this area. The only time I showed a loss was after doing upgrades like replacing carpet with other flooring, HVAC replacement or a water heater that also needed coding upgrades, but losses are tax deductible, so make sure any loss is because you put money into your rental. I also had a loss during the year that I sold the rentals, when I did upgrades to quickly sell the house for the best price. Also, upgrades done in the year that you sell your property reduces capital gains taxes.

When buying any property, interview for the best realtors with skills in property management and finding relatively dependable labor for home repairs (flooring, faucets, toilets, hot water heaters, and HVAC) and do upgrades for really cheap prices. Refuse to sign a contract until they can prove themselves. At first I did most of the repairs and painting myself. Having a realtor/property manager friend is very helpful. Never use regular commercial services for home repairs unless you have no choice. If they advertise you pay for the advertising.

For the last 9 years I paid a property manager to take care of my properties. It cost me 6% of the rent but it was worth it, because my wife and I were traveling a lot. I think the going rate is up to 8% now. My property manager was also my realtor, he was also a landlord, he knew lots of home repair people, he also made big bucks selling my rental property and my personal homes, you can negotiate with your realtor too. Find someone who wants to help you.

In the 1980's I took all of the courses at Richland College for a Realtors license. I just wanted the education, and I never got the license, but you might look at that as well. Lots of realtors are also landlords or property managers, just a suggestion. I do recommend taking realtor courses.

The best thing to do is find a mentor, and that is where a good Realtor/Property Manager comes in handy, they make money helping you buy and sell and they will help you learn as you go.
 
#7
I rented homes in the San Antonio, Plano, and Allen areas for 20 years, until December 2018. They were all single family homes.

I never had a home go vacant for more than maybe 75 days, and that was usually due to upgrades. Fortunately, I had good renters for 4 to 6 years but mostly for about 2 years at a time. During the 2008 recession prices had to drop a little, but I still made a monthly profit and that is very possible in this area. The only time I showed a loss was after doing upgrades like replacing carpet with other flooring, HVAC replacement or a water heater that also needed coding upgrades, but losses are tax deductible, so make sure any loss is because you put money into your rental. I also had a loss during the year that I sold the rentals, when I did upgrades to quickly sell the house for the best price. Also, upgrades done in the year that you sell your property reduces capital gains taxes.

When buying any property, interview for the best realtors with skills in property management and finding relatively dependable labor for home repairs (flooring, faucets, toilets, hot water heaters, and HVAC) and do upgrades for really cheap prices. Refuse to sign a contract until they can prove themselves. At first I did most of the repairs and painting myself. Having a realtor/property manager friend is very helpful. Never use regular commercial services for home repairs unless you have no choice. If they advertise you pay for the advertising.

For the last 9 years I paid a property manager to take care of my properties. It cost me 6% of the rent but it was worth it, because my wife and I were traveling a lot. I think the going rate is up to 8% now. My property manager was also my realtor, he was also a landlord, he knew lots of home repair people, he also made big bucks selling my rental property and my personal homes, you can negotiate with your realtor too. Find someone who wants to help you.

In the 1980's I took all of the courses at Richland College for a Realtors license. I just wanted the education, and I never got the license, but you might look at that as well. Lots of realtors are also landlords or property managers, just a suggestion. I do recommend taking realtor courses.

The best thing to do is find a mentor, and that is where a good Realtor/Property Manager comes in handy, they make money helping you buy and sell and they will help you learn as you go.