152

They are likely approaching a known busy new-tenant season. It's not uncommon to see rent and housing prices increase as the summer approaches as there are many families who move during that time. School's out and maybe the family wants the children to move schools or don't want to interrupt the school year. People who found places to live right after ...


112

I am sorry to say, you are asking the wrong question. If I own a rental that I bought with cash, I have zero mortgage. The guy I sell it to uses a hard money lender (charging a high rate) and finances 100%. All of this means nothing to the prospective tenant. In general, one would look at the rent to buy ratio in the area, and decide whether homes are ...


72

why does it make sense financially to buy property and become a landlord? Because then your investment generates cash instead of just sitting idle. All taxes, fees and repairs aside it would take almost 21 years before I start making profits. No - your profit will be the rents that you collect (minus expenses). You still have an asset that is worth ...


69

The rent will be determined by: the rent being charged on similar houses near you. Your costs have no bearing, at all, on the price you will get.


65

Your biggest problem is that this may be seen as a conflict of interest - in other words there is potential for you to make decisions about company money that benefit you, rather than the company. Fortunately it's not a very big problem, handled rightly. In order to prevent any possibility that this might be a problem, I recommend that you: Go and tell ...


46

Yes, it is safe, we have been doing it for years. We prefer our tenants to make their rent payments in this manner. In fact, we prefer that they set up an automatic payment for the rent, either through their online banking or through their bank directly. Apart from getting your rent on time, this method also has the added benefit of both parties having ...


44

No. The starting point is what other rentals are going for in the area. Supply and demand dictates a fair starting price. From there, you can adjust up/down for the fact that you know this person. (To be clear, this is the answer, i.e. the renter should neither know nor care what your costs are, only what similar properties rent for.) (Note, there are ...


42

I'd consider this offer. Keep in mind, any time you write a check, there's the information he's asking for. If it makes you feel comfortable, use the small balance account, or set up a 4th one you'll use for these incoming deposits only.


39

I disagree with the other respondents. If your tenant is an individual, renting in their individual capacity, there is no reason they need your SSN. They will not be sending a 1099 to you. If your tenant is a business, then your property is not a residential property. It is at least a "corporate housing", and you would have noticed that the contract was ...


36

In the United States the security deposit is to cover damages you make to the apartment or common areas. It is not to allow you to skip out of the contract. Frequently you are responsible for finding a person to take over the lease, but they still must be approved by the owner or their representative. If you do terminate the lease early you are generally ...


35

Several, actually: Maintenance costs. As landlord, you are liable for maintaining the basic systems of the dwelling - structure, electrical, plumbing, HVAC. On top of that, you typically also have to maintain anything that comes with the space, so if you're including appliances like a W/D or fridge, if they crap out you could spend a months' rent or more ...


35

You stated several things in your question that you are afraid of - you are afraid of investing in something you can't "see", afraid that you're buying the rental too high, afraid that you'll be stuck in your apartment. It sounds like investing in real estate is not going to give you peace. I have no clue about the investment opportunities in the ...


32

The main work that a property management company does is finding you a tenant. After that, they may provide handyman services at a decent rate, but for the most part they'll just be making the same calls that you would make to a plumber/electrician,etc. on the occasions where something goes wrong. I'm a landlord and like to handle repairs myself, my sister ...


31

I am a real estate agent. The issue is not yours, it's between the two agents. The agent with her hand out might have an agreement with your possible tenant, but she did not arrange the deal. Say you listed your apartment on your own. You have no agreement at all. As an agent, I can send a client your way, but I shouldn't expect compensation. Finally, if ...


30

Obviously you have done well financially in order to be able to purchase a condo for cash, presumably, without risk of your other obligations. To put things in perspective, we are probably talking about less than $5,000 in tax savings. If she is on the title then she is a co-owner. Are you okay with that? You would essentially be giving this child a 50%...


29

It's safe. You give people those numbers every time you write a check. If a check is forged, and doesn't have your signature on it, the bank has to return the money to you; they get it back from the other bank, who takes whatever action it deems necessary against the forger. They've been doing this for a few hundred years, remember.


29

Yes you can sell the property while it is being rented. The new owner has to honor the current lease agreements. Expect to provide copies of the leases to the potential buyer so they can review the contracts before committing to the purchase. The current owner isn't obligated to inform the renters that the property is for sale, though being able to show ...


28

Because the returns are not good. One of the big drivers in Australia is "negative gearing": if your investment loses money you can offset losses against your tax on other income. Institutional investors and corporations are in the business of making money: not losing it. Housing market investors are betting that these year to year revenue losses will ...


27

There are those who are knowledgable in real estate who offer rules of thumb: Don't pay more that 50X the rent for the house. Here, $972 x 50 is $48600. Assume half the rent goes to expenses. So from $972, you net $486, and after that mortgage, you have $111 in profit. Zillow usually assumes 20% down, here $20K. So you are seeing a 6.67% return on your 20K. ...


27

So here are some of the risks of renting a property: The renters damage the home or leave it in disrepair You can't find a good renter and the house goes unrented for several months The housing market falls again and you are underwater on your second mortgage and can't sell the house Plus the "normal" risk of losing your job, health, etc., but those are ...


26

When you took the apartment you agreed to pay the rent you are paying now, and they agreed to rent you an apartment. If apartments were being listed for more than you were currently paying, and your landlord asked you to pay more rent than you agreed because 'your apartment is worth more now', I'm betting you wouldn't agree to it. That's the way renting ...


26

The value of getting into the landlord business -- or any other business -- depends on circumstances at the time. How much will it cost you to buy the property? How much can you reasonably expect to collect in rent? How easy or difficult is it to find a tenant? Etc. I owned a rental property for about ten years and I lost a bundle of money on it. Things ...


25

Charles Marohn of Strong Towns, a licensed urban planner, said this when describing the obvious solution to high vacancies: With a sound grasp of free market economics, the developer understands that supply and demand equilibrate with price. If the units don’t fill at $10,000 per year, then the price has to be lower. ... Let’s say our developer drops ...


22

Should you negotiate? Yes, what harm can it possibly do? The landlord is unlikely to come back and say "Because you tried to negotiate, I'm putting the rent up by 10% instead.", or to evict a paying tenant merely because they tried to negotiate. Is the proposed rent increase "normal"? Yes. Landlords will generally try to get as high a rent as they can.


22

It makes sense to avoid share picking, if you're not really familiar with individual companies. But a reasonable alternative is to buy an Exchange-Traded Fund which tracks a whole portfolio of companies. This is basically investing in the economy as a whole. The ETF will generally buy a mix of shares. For instance, an ETF which tracks the EuroStoxx 50 will ...


22

Assuming equivalent returns, the difference is cash flow timing. Rental property gives you cash (and taxes) now, while a 401(k) gives you cash (and taxes) in retirement. Plus, a 401(k) typically includes a company match, which can increase the "return" by 50-100% before tax. That's hart to beat in any other vehicle. So if rentals are just for additional ...


21

If it was me, I would sell the house and use the proceeds to work on/pay off the second. You don't speak to your income, but it must be pretty darn healthy to convince someone to lend you ~$809K on two homes. Given this situation, I am not sure what income I would have to have to feel comfortable. I am thinking around 500K/year would start to make me ...


20

With insurance in general, you really should use it only to mitigate risks that would bankrupt you. Because your insurance premium will always be the cost of the actual risk plus the insurer's operating expenses and profits. Unless you believe you know the risk better than the insurer - but given that they can exist as a company only because they know how to ...


18

In addition to BobbyScon's answer, here are two more common reasons for a high vacancy apartment complex to raise their prices: If most of those that decide to rent would have paid more, then raising the price makes sense. This is true regardless of what the current capacity is. The age-old discount trick: bump up your prices and then offer a time sensitive ...


18

Since $1300/$300 = 4.333, it'll take you a bit over four months to recoup the lost $1,300 deposit. So... all else being equal and you plan on living in the $500/month apartment for five months, it makes mathematical sense to move if you also have enough cash for the deposit on the $500 apartment. HOWEVER "all else" is rarely equal! Why is the $500 ...


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