Does anybody here own any investment real estate

[Rick O]

Specifically single family rental houses. I'm getting ready to buy my first one. I would like to hear anyones experiences; good, bad, or ugly. Also if anyone can recommend any websites that are useful for information about real estate investing.

Thanks, Rick

[Dave]

Rick im also thinking of becomming a landlord. The people I talk with say a building is the way to go because if 4 out of 6 units are rented you still have income.

[O'Man]

I have been forced to become a landlord of a single family house. I know forced may seem strange, but it is a long story, and involves a poorly managed government agency and a bunch of red tape.

I find it a pain, and not all that fruitful. Had I not "backed" into it, I suspect my "investment" would be better and that I would feel differently about it.

[signu459]

Rick,

Yes, I own a Duplex and have been very succesful with it.

If you want to talk specifics please email me, make the subject clear so I don't delete it.

In general, the real money cash flow wise is in multi unit building like Quads and up.

- Tenants are the Key to succes not the building (to a degree see my next statement) All I can say is referneces, references, references. Get as many as you can, especially from previos landlords and currnet and previous employers. the key is to find someone that is lose lipped and will talk freely about the person in question.

- Buy the building in a good clean area. Lets face it most people that have bad intent tend not to live in the better areas. if you buy property that demands higher living standards and higher rent then you tend to attract better people. You may not get as much cash flow out of a high cost building but you will see far less headaches and damage, which will far out weight the extra $50-100 bucks you might see. This is not a hard and fast rule, becuse we all know that idiots come in all shapes, sizes and colors.

[Kahuna Tuna]

We too became landlords by "accident" when we had to move and couldn't afford to sell the house at the time. The real estate market had just taken a major downturn and we would have taken a considerable loss if we had been forced to sell. Fortunately we were in a good position financially and were able to rent the house after we moved. We still own the property and have had really good luck finding good renters. I totally agree with Tim's two key points, especially his take on renters, they can make or break you. When we have had a particularly good renter we will "reward" them by not raising the rent, this type of arrangement has worked well for us. With other tenants who call abot every little problem or dont take care of the place we are not shy about raising the rent regularly. All in all it has been a good experience for us but I do know several people who have some horror stories.

[Rick O]

Thanks everyone for your input. Tim and KT, You and I think alike as far as the renters goes. I will be picky and do a thorough background check. Several of my HVAC customers are landlords and they all give the advice of being careful of who you rent to. I'm in a financial position where I can afford to pass on some tenants and cherry pick.

We had a condo in Fla a few years ago which we rented out and the tax benefits were great. The downside was that we used a management company and their commissions ate up all the profit. We made pretty good money when we sold it even though we had owned it for less than five years.

We're fortunate in Atlanta to have a strong real estate market. I want to find a house close to where I live, and a nice one. The schools in our area are pretty good so that's a strong attraction. I wasn't expecting to have positive cash flow in the beginning but I thought with rent inflation I would in just a few years. On the other hand; if real estate prices continue to rise like they have in the last few years I should be able to do well just off of the appreciation.

Rick

[signu459]

One other point.....


I tend to also use the not raise the rent for a good tenant philosophy, however it does need to be used with caution. The most important thing to keep in mind is that you are running a business, you are in for one reason only and that is to make money, cash flow, equity or both. Make sure that you never lose site of that. I know a few people that locked into good tenants and then became good friends with them. So not only did they not want to raise the rent so as to not scare them away, but also because of the friendship. Raising a few dolllars ever year or so will not scare most people away. Do a bit of research to see what the market will bear. I keep aclose eye on the classifieds eo see that people are asking for rent. I also will call people that have property for rent and find out what they want and what they have to offer. If you are well below market then you can afford to raise the rent no matter how good the tenant. They will more than likely make some calls and realize how good they have it at the new rate and forget about the whole thing. Not to menetion that raising the rent on a regular basis keeps you in the practice of doing it, gets the tenant used to regular increases and prevents the need for a single large increase.

[hartman]

Rick,

Only buy a house that comes VACANT!!!!!!! Find out what rents are in the area. Remember that then not all your mortgage interest is deductible :(. Get a good tax accountant to go over all the items like

1) Rental income counts are income
2) Percentage of total house square footage is investment property. So means depreciation, expenses, etc..

I have a total horror story that I won't tell :)

Hartman