/biz/ - Business & Finance

managing rentals is serious business.

screen your tenants CAREFULLY.

you have been warned.

>>154178
Well of course I would make sure I meet the tenants and that they're only pick families.

>>154156
bump for op i wants some advice on this

>>154257
Thanks.

Sounds like a good plan. Can't underestimate how important it is for you to select the right tenants though. Your house will be destroyed if you don't.

>>154296
Well the way I was going to do it was interview the tenants first and make sure they're good people.
The mortgage is going to be around 1200 a month so I would charge them that and out of the 1500 I make a week I would put 500 into a special savings account to make up for any damages or emergencies for the house.

Also no one has been able to answer the other question.
Should I just stick to one house or should I get two houses since I can afford that right now.

Snap OP, how did you get enough to buy 2 houses at 20?

I'm with the other Anon, as long as you find the right tenants you should be ok. Maybe you should start with one house though so you can get the hang of it. Are you in a college town? How big are these potential houses (amount of rooms?).

>>154192

You also can't be too "picky" about the sort of people living there, at least in the US. You could get sued for discrimination.

The main issue with anything real estate, location is crucial. If the city is close to recession-proof (NY, SF for example), doesn't matter about the timing and pricing much. Don't cheap out on kitchens and bathrooms. Property manager won't be worthwhile. Consider the property taxes. Get a 30-year mortgage, put down at most 20% (the lower the better). Leverage is key. You might get $1500/month in rent, $1,000/month mortgage, plus $200/month between property taxes and maintenance. So it's not going to be this huge cash-money thing (in most areas).

Basically, have realistic expectations, scratch out what your actual expenses would be, factor in any time you'd have to spend managing the property (or the cost of hiring someone to take calls for you). Generally it's a good long-term investment..

But anyway, you should charge more than the mortgage payment for rent. If you can't, it's not a great investment. Check the market, see what similar homes in a similar area are renting for.

For repairs, you should have ~$3,000 (maybe even $5k, if it's an old house) for emergencies set aside. Pipes breaking, water damage, Roto Rooter, etc. are expensive. Insurance would cover some emergencies, sure. Maybe budget $2,000/year (this is a bit high) for general repairs and renovations. If it's too much, cut back, sure.

I'm going to sleep, best of luck, I'll probably find this again tomorrow if you have questions.

>>154359
Once I got my grade 10 my dad signed me up as a tower crane apprentice. By the time I finished high school I already had my license since I would work during the summers as an apprentice. Then for 2 years I worked as a tower crane operator and those 2 years I was getting a lot of overtime which is double pay so I was making just around 100k a year. When I turned 19 I gave my brother about 90k for the mobile crane he bought and I just turned 20 in December so I have the rest of the money after taxes. This year though because of the harsh winter I've been getting a bit less overtime. Hopefully it picks up during the summer time.

Where I'm getting one house forsure is right beside the public transit place near downtown. It has a walk in basement. The other one I want to get near a college. I know those guys will damage everything so I would charge them a lot more for the rooms.

>>154348

Oh, don't buy 2 houses at the exact same time. I'd at least wait a few months, more likely I'd wait 6-12 months. You'll want to see the things potential tenants complain about in your first property, how quickly it's rented out, how much rent you can actually get out of it, the amount of time/effort put into managing everything.

Even doing all your research, it's possible to make a stupid mistake. Might not be very costly. Anyways, it's better to make one mistake, learn from it, and improve the second time around. And, if the economy does tank in say 3 or 6 months and you wait on a second house, you just saved a ton of money. I can't really say for certain without knowing a rough location (Detroit- wtf are you doing? Denver.. probably a safe bet.)

>>154381
Sounds like a good plan to me OP. You sound like you have it all figured out. If you feel confident then go for it OP.

>>154387
I live in Canada. I'm doing this around the Greater Toronto area.
The first house I'm looking that I know I want to buy is in Mississauga.
Here I have to put at least 25% down or else I have to pay an insurance thing for the bank. I'm not really looking for a huge cash flow thing. Just something to do while making a little money on the side.
So if I get this place with the walk in basement I could rent out the basement for 1200 and the top for 1500?
That could make 2700 come in a week while I only have 1200 for mortgage. leaving me with 9600 left over which then I could take about 500 from that each month for repairs and whatnot.

>>154407
and 500 a month would be 6000 a year. So I guess I could turn that down to 250 instead.

Landlord here

There's a lot of good advice on this thread already. But I think I have a solution for your issue, OP.

Basically, get the best of both worlds and buy a duplex, a tri , or a quad. Move into one of the units and rent the other ones out.

That way, you only have ONE mortgage, and if you work the numbers right, your mortgage will be completely paid by the rent.

>>154323
I don't think you understand anon. I was helping the landlord show an apartment here and the people seemed really nice and respectful. The day after she got the apartment she started being a total bitch. Letting sketchy people into the building, letting her dog out without a leash which means it digs through the trash and then she called the bi-law people on me and my mom because we stopped cleaning it up after her dog. When my landlord confronted her she tried to accuse him of attempted rape and calling him "sandnigger" and she also started stealing tools he was using from under his nose. I recommended you rent out to friends or close friends of your close friends. If you cant, ask for proof of income and if you see a welfare you disability check turn them down. Or just put the rent so expensive they wont bother trying.

Buy a house near a university or two and rent out bedrooms. I do this and it pays for my mortgage and utilities. I get to eat their food when they aren't home too.

>>154398
Yeah OP. I agree with this OP. This guy gets it OP.

>>154323
People can be as nice as come be but have friends that get into shit. Or their kids could get into stuff like drawing on the walls. Even if you have great tenants, after years of living there, the house will need a lot of work. I live in a rental right now and I'm a good tenant but I have been living here for five years. I smoke inside, I have animals and I the carpet will need to be tore up after I leave.

We were warned about the pipes freezing and told to keep our heat at at least 50 degrees. The thing is, there is no way they can control whether or not I can afford to pay for utilities so they won't be able to know if I am doing it or not. If the pipes burst, they are stuck paying for them if I just up and leave.

When I lived at an apartment, my neighbor was a married guy with a baby. They seemed great and financially stable. When he lost his job, he lost his shit and trashed the place in a drunken rage.

Basically what I am trying to tell you is there this is a risk thing. You will never know if you are getting good tenants or not. You might do well going for someone in their late 20s or so. Maybe someone who is working in a specific career. I almost filed for discrimination because I was told by a landlord that I would not get the house if I wasn't married. That is discrimination. You have to be careful of that shit.

>>154323
Wait, are you saying you're aiming for zero net cash flow?

Real estate is not the best place to park your money, so you should at least try to get some cash flow out of it

>>154381
You sound like you're from Toronto

One option is an apartment building. In less desirable areas (middle-lower middle class) you can get a 5 unit apartment building for fairly cheap and make a tidy profit.

>>156358
I think that is too much for OP right now. He needs to learn the business so his getting one house is perfect.

>buy duplex in niggerton
>white hipsters move in
>paint everything crazy crayola colors
>put up a few cafes and galleries
>property prices go up 500%
>enjoy your infinite monies off a 40k investment

I think I know the long standing boon town in my city that's ready for white gentrification. Anyone else investing?

>>156877
Nigger neighborhoods don't gentrify until Mexican ones don't exist anymore. Non-impoverished "gentry" pushes hispanic/latinos out of areas and into black areas, and THEN those areas gentrify.

Take Chicago or NYC as a case study

>>157344
The Hispanics mostly occupy the southside of my city. The blacks occupy the wards. A longstanding black neighborhood is getting hipster refugees from the gay/club district that's being built up and becoming too expensive. They've already got an organic macaroni and cheese restaurant and a few bike shops and coffeehouses set up. It's happening!

>>156153
I want to stay with my family for a bit longer but I do want a place with a walk in basement so I can charge for two places instead.
>>156355
Nah I'm from a very small town far from Toronto. Just do all my work in Toronto because that is where the work is at the moment.

>>157495
Dude whaaaat?! What city is this?