Would you ever be a landlord?

[Droopy]

I'm reading up on it now. I think I could do it, but I would pursue other investment strategies before I tried it. There are times when I think it would be really hard on me. I used to work with a woman who was raising 5 kids on her own. She was renting an old farm house out in the country. She needed a lot of room for not a lot of money and that was the only way she could afford it around here. She was paying $800 a month, which is still a lot of jack around these parts for people who rent places to live.

One day she lost her cool at work and cussed out our boss's boss. Bad move. She was escorted off the property within 10 minutes. We are truckers and it is very difficult to find good paying jobs that get you home every day around here- the kind of job a single mother of 5 desperately needs.

Last I heard she had found another job but was having trouble making ends meet. How would you like to evict her and her children?

[CaliforniaPeggy]

1. Good morning, my dear Droopy...

My husband and I talked in the far distant past about having rental properties...

Luckily we came to our senses, and decided that we would make lousy landlords...

We have enough on our hands taking care of our own home, never mind another one!

I would have to be really pissed off at someone in order to evict them...

No, thanks!

Good luck to you with this...

:hi:

[Droopy]

2. They say it's best to manage your own properties

But I'm a busy guy and if I were going to buy rentals I think I would hire a property management company to do it if it weren't too costly.

Good morning to you, Peggy. You are up awfully early today. I guess it's about 7:30 there.

[CaliforniaPeggy]

3. You're right! I am up early...

And yes, it is 7:30 AM...

I slept well, and couldn't sleep any more...

So here I am!

It's going to be another very hot (well, for us!) day...

Property management companies have their place...But they also take their cut...

If you had enough properties, then it would certainly be worth it, I think...

:hi:

[fight4my3sons]

4. my mom and her husband have a rental property

they manage a farm and live in a house on the farm right now, but own a condo that they rent out. They hired an agency to rent the condo out so that they did not have to 'deal' with the renters directly for the very reason that you stated above. They do not rent to people with large pets or smokers. The agency takes care of everything and my mom and husband pay them a small fee.

[Droopy]

5. I think that's the way I might do it if I'm going to buy rentals

But it would depend on the fee. Around here a good monthly return on your investment property might only be $150 on a single family home.

And don't get me wrong folks. I'm not rich. When I say "buying rentals" it's going to take a long time for me to make "rental" plural. Right now I'm trying to buy a house and I'm not sure if I'm going to flip it or fix it up and turn it into a rental. It's going to be nicer than my current home, a cheap little condo, I might move into the house and rent my condo. :)

[fight4my3sons]

7. My mom and husband sold their other property

that my mom's husband had owned for 30 something years. It was adjacent to a farm and the owners of the farm purchased it from him. They used the money to buy the condo outright. I think they just pay just pay taxes every year and maintenance costs (whatever you have to pay when you live in condos). Then they bank what they make from the condo for retirement. They fixed the condo up before the rented it and they plan on living in it when they retire, or possibly selling it then and moving somewhere else.

[riderinthestorm]

6. I've had two kinds of rental properties, one kind I'd do again, one kind I'll never do again

I had a cottage on Lake Michigan, in Michigan within 2 hours drive of Chicago, for years that I rented out on a weekly basis through a management company. It was easy and painless. I would own another "vacation" property again since you aren't dealing with the heartache that accompanies long term renters. It's pretty rare that you get people trashing a vacation rental, especially if you choose wisely and pick a "family" destination and not a party destination. This was pretty lucrative for us, even with the property company's cut, and since we loved the area we always reserved weeks for our own usage, and our family's usage, and it was a win-win all around.

I also have a farmhouse that we rented out for years as well and did everything from placing the ads to collecting the rent and making repairs. That's been hell with the heartache stories of down-on-their-luck renters, chasing people down for money, damage (!), and just the way some people live - oh my Gawd disgusting. The absolute worst have been the self-professed Christians in my experience, with the apex of bad being a Baptist minister and his family who rented from us for 6 months while the parish house was renovated. They knew we were atheists by the time they left (yes, actively tried to "witness" to us over and over). In indelible ink, they scrawled Bible verses about repenting of sinners etc. all over the living room walls before they left. Not even Killz got it out, I had to re-drywall the entire living room! I will never, ever, ever, ever (did I say never?) do long term rentals again.

We're now in the process of renovating the farmhouse to live in ourselves and I am soooooooooo relieved to be out of the rental business.

YMMV. It can certainly be a wise investment choice. I know we wouldn't be in the financial place that we're in without investing in real estate (we're not rich but certainly not in terrible shape) - the market is pretty weird right now but the bargains - wow! Good luck.

[Droopy]

8. I appreciate your insight

Your story is exactly the kind of input I need right now. I'm reading a book that is filled with first hand accounts of investors dealing with rental property. I'm thinking that a lot of hassle could be cleared up with a simple credit check for prospective tenants. But then again, maybe folks with really good credit would probably choose to buy a home rather than rent.

Now that I think about it, there is a resort style area in my neck of the woods where I might be able to get hooked up with a decent investment property. It's expensive though. I was thinking about buying there several years ago for a personal residence and was quickly priced out of the market.

[riderinthestorm]

10. Michigan was an ideal location for us

Close enough for both us and vacationers. We only rented for about 15 weeks/year (all summer, Memorial Day weekend, Labor Day weekend plus a couple others), and that brought in enough income to pay all of our mortgage, taxes, repairs and the extras we put on the place PLUS we also got some cash on top of that. It was only a 2 bedroom - tiny but with it's own beach. It was worth it for us. When we sold, we had enough equity and savings to buy our farm just 30 miles from Chicago - pretty pricey real estate (yes, we're now "land rich, cash poor" but it works for us since we really WORK the land).

Also, with the vacation rental, we used it ourselves for all of the fall, winter and spring. We loved it since the area wasn't crowded, the view was the same, the water in late fall is still really warm, plus that's our "slow" season....

If I ever got enough cash, I'd consider it again, especially as the stock market is so funky at the moment....

[Tuesday Afternoon]

9. in a word --

no. been there.done that.not for me.no thanks. ymmv.

[skygazer]

11. No

Helped a friend who had some rentals and it was nothing but headaches. I would never take that on willingly.

[texanwitch]

12. I have a good friend who bought the house next door to her and rents it out.

So far no problems but she lives next door, I think that would be a big help.

[Turbineguy]

13. I did it for a while.

On paper it's great. In real life it sucks. We ended up with a tenant who lost his job and couldn't pay the rent. With a Wife and Child we could not very well throw them out on the street. Eventually they moved out on their own. Later they paid us what they could.

They were nice people.

To me it's a bad investment scheme, although perhaps shares in a REIT would work, at least you are insulated from the tragedies of everyday living.