-
ODT Gun Show & Swap Meet - May 4, 2024! - Click here for info
Big financial decision I want to be smart and need real advice.
- Thread starter bulletpaluza
- Start date
Rent it out if your wanting to build monthly income.
Nothing like having someone pay your mortgage and putting extra cash in your bank account.
I started with one, then two, then three. I now have several and all are paid for....
One of the best ways to get a renter that will take care of your property is when your taking applications
and decide which one you want to trust , ask them to let you see the inside of the property they are currently
renting. This will let you know real quick how they live. Has worked pretty good for me so far.
Nothing like having someone pay your mortgage and putting extra cash in your bank account.
I started with one, then two, then three. I now have several and all are paid for....
One of the best ways to get a renter that will take care of your property is when your taking applications
and decide which one you want to trust , ask them to let you see the inside of the property they are currently
renting. This will let you know real quick how they live. Has worked pretty good for me so far.
I weren't going to say nuthin but I was in the money when Jimmy was president
Let me rephrase that... I remember interest rates on homes being in the 12-16% range in the late 70’s early 80’s.. I was finishing undergrad then and lived hand to mouth....
So 40 years ago... Take a look at Cash interest in the modern era...
Undergrad? OMG! You are an old fart.
Well Iwas on the 6 year plan ......
I don’t disagree with selling, but just to play devils advocate, and share some of the considerations...
I’m in my young 40s now, but have had lots of rentals. Grew up buying and flipping houses with my parents. Dropped out of school doing that and starting my current business.
It is true being a landlord can suck. But once you really figure it out, you can severely curve the odds in your favor. I am basically out of the rental game, but currently have 2-3 rentals still on the side. Mine are extremely low maintenance. I put the most high quality low maintenance tenants in there. They’re perfect. But they come at a reduced rate. As somebody noted, lease options are a really good idea. Then your tenant is a prospect buyer. They have skin in the game. They will take care of it much better, and or you keep their deposit upon exit. but that’s just enough to get you screwed up. You would need help with that. Do look at their existing location and the inside of the car when you meet them. Credit check… There are other tricks...
All of that is not for everybody. And you wouldn’t want a rental probably for the first time. The first one or two is where you’ll learn a lot of lessons.
But, if you have enough down payment for your new property to avoid PMI,
and you only owe 100 K on the rental,
and you’re disciplined enough to pay it off, it could be a fit. But, you need to know your rental market. Is it in a desired area? Are there enough tenants actively looking in the area for that type of home? Most importantly, what is the realistic monthly positive cash flow? If you can’t return $400 or so positive a month, I would sell.
And, tax law says if you live in the house two of the last five years, the sale is tax free up tohalf million. So you need to think about that. Currently your equity is non-taxable. As soon as three years ticks by, it’s subject to capital gains upon the sale.
If you have a much better avenue for making large amounts of money, sell the thing and walk away. If you’re more modest in your current income, and all of the above can be checked off properly, it could help you.
Otherwise, a great tenant, pay that sucker off, you won’t be sad you did it in five or 10 years. Once you pay off the mortgage, your cash flow improves significantly. But it’s not for everybody. There will be some handyman crap along the way. But if you know some people who handle this kind of thing, you could greatly reduce the burden.
I’m in my young 40s now, but have had lots of rentals. Grew up buying and flipping houses with my parents. Dropped out of school doing that and starting my current business.
It is true being a landlord can suck. But once you really figure it out, you can severely curve the odds in your favor. I am basically out of the rental game, but currently have 2-3 rentals still on the side. Mine are extremely low maintenance. I put the most high quality low maintenance tenants in there. They’re perfect. But they come at a reduced rate. As somebody noted, lease options are a really good idea. Then your tenant is a prospect buyer. They have skin in the game. They will take care of it much better, and or you keep their deposit upon exit. but that’s just enough to get you screwed up. You would need help with that. Do look at their existing location and the inside of the car when you meet them. Credit check… There are other tricks...
All of that is not for everybody. And you wouldn’t want a rental probably for the first time. The first one or two is where you’ll learn a lot of lessons.
But, if you have enough down payment for your new property to avoid PMI,
and you only owe 100 K on the rental,
and you’re disciplined enough to pay it off, it could be a fit. But, you need to know your rental market. Is it in a desired area? Are there enough tenants actively looking in the area for that type of home? Most importantly, what is the realistic monthly positive cash flow? If you can’t return $400 or so positive a month, I would sell.
And, tax law says if you live in the house two of the last five years, the sale is tax free up tohalf million. So you need to think about that. Currently your equity is non-taxable. As soon as three years ticks by, it’s subject to capital gains upon the sale.
If you have a much better avenue for making large amounts of money, sell the thing and walk away. If you’re more modest in your current income, and all of the above can be checked off properly, it could help you.
Otherwise, a great tenant, pay that sucker off, you won’t be sad you did it in five or 10 years. Once you pay off the mortgage, your cash flow improves significantly. But it’s not for everybody. There will be some handyman crap along the way. But if you know some people who handle this kind of thing, you could greatly reduce the burden.
Have you ever been a landlord? I have. It sucked. I won't do that crap again unless I contract with a property management group, and even then, I'd have to soul-search. My vote is float it out on the market for sale and see if you get any bites. Housing is about to TANK, so good luck. Give it a few months. Then maybe try the rental route.
Being a landlord sucks so bad, man. So bad.
Being a landlord sucks so bad, man. So bad.
Just my 2 cents... (I have experience in these things)
If you have the desire to keep the property.. learn how to be a landlord.. take lots of classes. You will still make mistakes..
But... your wealth will grow at a faster rate by paying down 2 properties than 1...
My goal was (still is) to have 2 rental properties and 1 personal residence paid for...
That way I will have positive cash flow and something to leave my kids..
How am I doing? About 2/3s the way there.. 1 paid for.. the other will be paid for by the end of the year..
Is it worth it?
Some days its questionable.. but you gotta decide if it's really what you want to do...
If you have the desire to keep the property.. learn how to be a landlord.. take lots of classes. You will still make mistakes..
But... your wealth will grow at a faster rate by paying down 2 properties than 1...
My goal was (still is) to have 2 rental properties and 1 personal residence paid for...
That way I will have positive cash flow and something to leave my kids..
How am I doing? About 2/3s the way there.. 1 paid for.. the other will be paid for by the end of the year..
Is it worth it?
Some days its questionable.. but you gotta decide if it's really what you want to do...
