Any real estate investors around?

[MrWunderful | 2,927]

4 hours ago, ThePhleo said:

I thought about investing in rental real estate, and I just thought of one hypothetical scenario that's a very real part of being a landlord.

What if I have to evict a tenant one day?

I have a soft and squishy heart, and I can't imagine having to actually go through with, and evict someone because they can't give me money, to pay down my mortgage on a home that they live in.

I even debated with myself and said "I'll just make them pay the interest and not the principle if they can't pay" and then I thought, well, what if they don't pay even that? Then what? If I start eviction during the winter, I'm the devil for kicking them out in the cold, and if I evict them in the summer...well by the time it actually takes hold I'm actually kicking them out in the cold.

Nope....too hard, especially if I can just eat the cost. I refuse to evict someone ever.

That being said, I do plan on buying real estate for rentals one day. But it'll be in Orlando only, and for short stay vacationers.

Air bnb/vrbo is huge nowadays

[Sumez | 2,994]

I can see the advantages of investing in real estate property, but I don't think I'd ever be able to live with myself if I were to become a landlord. There's limits to the immoral things even I would do.

[Daniel_Doyce | 477]

9 hours ago, MrWunderful said:

Thats my biggest fear, and if it gets to be that much of a nightmare, I can always sell. Im ina Little bit different situation than your co-worker, though.  This investment property isnt my primary residence and will be my 3rd property. 
 

just remembered, @MrMark0673 is big time probably managing a monster portfolio now. Any advice?

You can always sell, but that doesn't mean you'll make a profit off it. Even if you are more sanguine than I am on the current housing market, there are a lot of friction costs involved in selling.

It sounds like you really haven't done the math to see if the return on equity makes sense. Cold hard cash flow projections in an Excel spreadsheet are a necessity for real estate investment.

[Daniel_Doyce | 477]

derp dupe

Edited November 1, 2022 by Daniel_Doyce
dupe

[MrWunderful | 2,927]

1 hour ago, Daniel_Doyce said:

You can always sell, but that doesn't mean you'll make a profit off it. Even if you are more sanguine than I am on the current housing market, there are a lot of friction costs involved in selling.

It sounds like you really haven't done the math to see if the return on equity makes sense. Cold hard cash flow projections in an Excel spreadsheet are a necessity for real estate investment.

The goal is to buy at the bottom. And 20-25% loss is an acceptable risk for me. 

[MrWunderful | 2,927]

5 hours ago, Multiplat Cat said:

I know someone who runs a real estate business that deals in haunted houses. There's been claims that some of the houses up for sale have things like a creepy mist appearing in the basement from time to time, and one house has reports of evil robotic voices being heard and a history of suicide from the previous occupants. Sounds like a goldmine, doesn't it?

Sounds like easy money for a themed air bnb. Take advantage of goth weirdos who get off on that stuff, because I dont believe in haunted houses. 

[phart010 | 1,708]

17 hours ago, ThePhleo said:

I thought about investing in rental real estate, and I just thought of one hypothetical scenario that's a very real part of being a landlord.

What if I have to evict a tenant one day?

I have a soft and squishy heart, and I can't imagine having to actually go through with, and evict someone because they can't give me money, to pay down my mortgage on a home that they live in.

I even debated with myself and said "I'll just make them pay the interest and not the principle if they can't pay" and then I thought, well, what if they don't pay even that? Then what? If I start eviction during the winter, I'm the devil for kicking them out in the cold, and if I evict them in the summer...well by the time it actually takes hold I'm actually kicking them out in the cold.

Nope....too hard, especially if I can just eat the cost. I refuse to evict someone ever.

That being said, I do plan on buying real estate for rentals one day. But it'll be in Orlando only, and for short stay vacationers.

When you have a property manager, they take care of screening the renters background, collecting rent, sending out late payment notices, and evictions. These things are the value of having a property manager. The problem is when you need the property manager to do anything outside of these things, like repairs. Then they start sucking up money.

AirBnb’s make way more money per month than regular rentals. And there’s  like $1M worth of insurance backed by the Airbnb contract in case renters burn the house down. The problem with Airbnb is that often people are trying to drink and party. So they may trash the place (Airbnb screens people and bans bad renters, but also has lots of first time renters). If you have enough bad renters your neighbors might complain to the city that your house is becoming a nuisance. For Airbnb it’s good to be on the beach or in a area where it’s expected for people to be acting a little wild. You don’t want to do Airbnb in the middle of a cozy quiet neighborhood.

Edited November 1, 2022 by phart010

[Tabonga | 2,337]

6 hours ago, Multiplat Cat said:

I know someone who runs a real estate business that deals in haunted houses. There's been claims that some of the houses up for sale have things like a creepy mist appearing in the basement from time to time, and one house has reports of evil robotic voices being heard and a history of suicide from the previous occupants. Sounds like a goldmine, doesn't it?

https://www.outtherecolorado.com/news/a-hotel-of-horror-in-an-old-remote-mining-town-of-colorado/article_71bbcd85-343b-579a-b04b-c64d28ff17b5.html

[Lago | 221]

On 10/31/2022 at 10:39 AM, MrWunderful said:

@Reed Rothchild I am figuring on 10% cost per rental to sub out property management. I want to do the minimal amount. 
 

10% isn't enough.  You'll need to talk to the property management company to see what their fees are but it'll probably be something like this:

half of first month rent

$300 advertising fee

10% of every other month throughout the lease

10% of any late payment fees collected

1/4 1st month rent on lease renewal or repeat the above process.

repairs not included in the above.

Also, most counties have a homestead exemption on your property tax if it is your primary residence.  If it isn't your property taxes will probably double.

[Daniel_Doyce | 477]

9 hours ago, Lago said:

10% isn't enough.  You'll need to talk to the property management company to see what their fees are but it'll probably be something like this:

half of first month rent

$300 advertising fee

10% of every other month throughout the lease

10% of any late payment fees collected

1/4 1st month rent on lease renewal or repeat the above process.

repairs not included in the above.

Also, most counties have a homestead exemption on your property tax if it is your primary residence.  If it isn't your property taxes will probably double.

That goes back to my earlier point that if you're not seriously doing a realistic cash flow analysis before buying a rental property to see if the investment is sufficiently profitable or even profitable at all, then it's not going to end well.