Is anyone doing old-fashion landlording these days? I'm trying to break into that space, but I have no idea what I'm doing and could use some advice from someone who's done it before.
Yup. I was renting one unit in a duplex. My landlord put it on the market at a way-too-high price. Fast-forward nine months of having to get out of the way when the real estate agent wanted to show the property, and the price steadily dropping into my range, and I realized it would be a real PITA to have to move all my stuff out and find another apartment if someone bought it and hiked the rent or wanted to move into my unit. Went to one bank, was told that I'd need to put down 20-25% on a commercial loan. Went to another bank, and the loan officer worked out that I could get an FHA first-time owner-occupant loan, since I was planning on staying in my unit, and renting out the other one. Stockpiled cash for a few months by only paying minimums on my credit cards and cutting back on anything extra, plus a little help from my folks, for the down payment(FHA was only about 3.5% down), and bought the building.
Now I'm collecting $1300 a month rent from the other tenant, which covers almost all of the mortgage and taxes. Upkeep isn't that big a deal, since the way my lease was written, I was already responsible for all of the groundskeeping and snow removal when I was renting anyway. Also, it's worth it to make sure you have good tenants, that pay on time, and don't make a mess.
Yes. Our family sold an ag property this year and I purchased 3 rental properties. Two of them are 3 bedroom condos that I rent to students at Cal Poly SLO. The third is a 3 bedroom home that is a family rental. It's been going smoothly so far. While student rentals seem risky on the surface, I like them because (a) most students (here, at least) are paying their rent with student loans or parents' money, so its fairly guaranteed, (b) turnover is easy to predict, (c) you'll have no guilt of evicting a young family who has fallen on hard times, (d) if you find serious STEM or grad students, they usually don't party too hard.
After the initial fixes and repairs we had to do during the purchase process (every home in California has termites), I've been working to automate as much as possible. Here's my "Landlord Stack":
1. Cozy for applications and rental payments (https://cozy.co/) (Price: free)
2. Rocket Lawyer for leases, other documents, and random law questions (https://www.rocketlawyer.com/) (Price: $50/mo)
4. Trello for organizing information and to-dos (https://trello.com/) (Price: free)
5. We bank at Chase and use their online bill-pay to handle the few utilities we're responsible for.
So for I've had to unclog a couple toilets and fix a window screen. Other than that, smooth sailing so far. Email in profile if you want to get in touch.
I have some anti-advice, not what you asked for, but perhaps valuable anyway for you to take into consideration. When I moved to a new home, I started renting out my old house. I found I just cannot handle being a landlord. The seemingly constant calls for repairs just throw me for a loop. I cannot concentrate at my dayjob when I'm thinking about having to yet again deal with plumbers, handymen or other trades people and their associated expense (and they are EXPENSIVE) and/or repairing it myself (and I'm no handyman). I went days with close to zero productivity as the repairs drag on. And this is with pretty good tenants. I cannot imagine the added mental stress if they were bad tenants. I've pretty much decided when the home selling season starts picking up in spring, I'm selling and getting out of landlording.
I run a 4plex. It's not really passive income, but the income:time invested ratio is much better than my programming salary.
The single best piece of advice I can give is to provide a great experience for your guests and have a high price to match that experience. No factor I've found better judges the quality of a tenant than the ability to hand over a big wad of cash.
I've been looking at this as well and I also have very little idea what I'm doing. I found a spreadsheet on Bigger Pockets that helps evaluate properties as rental investments by plugging in some numbers. Apart from that, I just have some alerts set up on Redfin and a general idea of what parts of my city would probably attract good tenants.
But I've seen enough stories about nightmare situations that I'd rather cover all my bases before jumping in.
He comes across as a great guy (heard him interviewed on a podcast before I bought the book), has a really readable style (seriously, it makes real estate financials "light reading"), and generally seems focused on helping people (he was apparently teaching when a publisher approached him to write a book - he told them he wouldn't write the book they wanted because he thought it would be useless, but he would write them a book on what he thought would be most useful).
And absolutely: if you're from a comp-sci background, the real estate math is all trivial plug and chug. But it is worth learning the accepted ways of doing things so you can properly compare and model your properties.
I'd also highly recommend bigger pockets, it's great for USA information specifically. I'm from canada and I still find it really useful, it has a great community that is very open and helpful!
I started doing landlording for passive income at the beginning of the year. My property is 360 miles away from me (a converted vacation home). I do use a property management service. You will have extra tax paperwork to file at the end of the year (Schedule E).
douche|10 years ago
Now I'm collecting $1300 a month rent from the other tenant, which covers almost all of the mortgage and taxes. Upkeep isn't that big a deal, since the way my lease was written, I was already responsible for all of the groundskeeping and snow removal when I was renting anyway. Also, it's worth it to make sure you have good tenants, that pay on time, and don't make a mess.
callmeed|10 years ago
After the initial fixes and repairs we had to do during the purchase process (every home in California has termites), I've been working to automate as much as possible. Here's my "Landlord Stack":
1. Cozy for applications and rental payments (https://cozy.co/) (Price: free)
2. Rocket Lawyer for leases, other documents, and random law questions (https://www.rocketlawyer.com/) (Price: $50/mo)
3. Xero for accounting (https://www.xero.com/) (Price: $9/mo)
4. Trello for organizing information and to-dos (https://trello.com/) (Price: free)
5. We bank at Chase and use their online bill-pay to handle the few utilities we're responsible for.
So for I've had to unclog a couple toilets and fix a window screen. Other than that, smooth sailing so far. Email in profile if you want to get in touch.
vertoc|10 years ago
pcglue|10 years ago
padobson|10 years ago
The single best piece of advice I can give is to provide a great experience for your guests and have a high price to match that experience. No factor I've found better judges the quality of a tenant than the ability to hand over a big wad of cash.
_neil|10 years ago
But I've seen enough stories about nightmare situations that I'd rather cover all my bases before jumping in.
robinhoode|10 years ago
ethbro|10 years ago
He comes across as a great guy (heard him interviewed on a podcast before I bought the book), has a really readable style (seriously, it makes real estate financials "light reading"), and generally seems focused on helping people (he was apparently teaching when a publisher approached him to write a book - he told them he wouldn't write the book they wanted because he thought it would be useless, but he would write them a book on what he thought would be most useful).
And absolutely: if you're from a comp-sci background, the real estate math is all trivial plug and chug. But it is worth learning the accepted ways of doing things so you can properly compare and model your properties.
shahmat|10 years ago
hwstar|10 years ago