10-06-2013, 08:47 AM
(This post was last modified: 10-06-2013, 09:24 AM by Horace Cugle.)
My wife and I owned rental property in the past, mid 70's through the mid 90's. Two condos and two multi-family older homes.
Back then was a good time to own real estate and VERY profitable after taxes and depreciation. If you could buy a property and just come close to the rent paying PITI it was a winner if you could cover the rest.
You really have to know what you're doing when it comes to picking tenants. And you have to really love fixing stuff in the evenings after you already put in a day's work, and you have to love seeing your cash flow dry up as a result of repairs and cap investments. Still it was very profitable if you could live on baloney sandwiches and hang on until tax time.
Eventually all the hassle wore us out and we sold. Don't miss it one bit. Our house was paid off 11 years ago and that's all the real estate I want. Sometimes I don't even want that because I still have to maintain it.
My feeling is the average person or family you might rent to has way less ability to pay the rent than 20 years ago. Of course it would depend on the economic climate in that location, but generally, people don't have it as good as in the past.
Alex your experience mirrors mine in many ways.
A landlord must be involved and must run a tight ship or you will be taken to the cleaners. You cannot sit back and expect the money to just flow in like dividends because in most cases, it won't. Or you'll have your property destroyed. You really have to stay on top of it!!
We rented to HUD clients a couple of times and that was good because the rent always came on time. But the next thing you know they'd have 10 people living in a 1 bedroom apartment and there would be trouble on the property. Laws are not exactly landlord friendly either and it takes time to get a no-paying tenant out.
Maybe others see it differently but rental property is not a passive investment. Lots of work and lots of heartburn. But profitable if you can manage your way through it.
Back then was a good time to own real estate and VERY profitable after taxes and depreciation. If you could buy a property and just come close to the rent paying PITI it was a winner if you could cover the rest.
You really have to know what you're doing when it comes to picking tenants. And you have to really love fixing stuff in the evenings after you already put in a day's work, and you have to love seeing your cash flow dry up as a result of repairs and cap investments. Still it was very profitable if you could live on baloney sandwiches and hang on until tax time.
Eventually all the hassle wore us out and we sold. Don't miss it one bit. Our house was paid off 11 years ago and that's all the real estate I want. Sometimes I don't even want that because I still have to maintain it.
My feeling is the average person or family you might rent to has way less ability to pay the rent than 20 years ago. Of course it would depend on the economic climate in that location, but generally, people don't have it as good as in the past.
Alex your experience mirrors mine in many ways.
A landlord must be involved and must run a tight ship or you will be taken to the cleaners. You cannot sit back and expect the money to just flow in like dividends because in most cases, it won't. Or you'll have your property destroyed. You really have to stay on top of it!!
We rented to HUD clients a couple of times and that was good because the rent always came on time. But the next thing you know they'd have 10 people living in a 1 bedroom apartment and there would be trouble on the property. Laws are not exactly landlord friendly either and it takes time to get a no-paying tenant out.
Maybe others see it differently but rental property is not a passive investment. Lots of work and lots of heartburn. But profitable if you can manage your way through it.