Rental Property Income

[TravisParticipant 84]

For any of you that own rentals, about how much is your margin (revenue – expenses / revenue) for any given year? I’ve recently been buying REIT stocks and was curious to see how their dividend compares to renting a property myself.

Best advice my dad gave me, "Don't get married. Don't have kids."

[joetechParticipant]

I was an absentee landlord once. I always just about broke even, and the depreciation I took always helped me on my taxes. But, renters are transients and unless you have good tenants consistently, it can be quite a nightmare. Don’t let a property manager turn your rental into section 8 housing. Those tenants trash the place when they get evicted. I’ll never be a landlord again. I think REIT’s are a good investment if you pick the right one, though.

"Don't follow in my footsteps...I stepped in something."

[MonkParticipant 16985]

It’s not just about the income, it’s the hassle that goes with it.

[53ClicksUpParticipant 1345]

You can rent rooms out in a house that you own and live in and maintain a much higher level of control. This is at the cost of your privacy of course. Quite frankly after about 6 months or so, having to share my place with other folks no matter how nice they are, just gets on my nerves.

As far as renting out a property where you are an absentee landlord… you can pretty much count on having to completely overhaul the house afterwards, i.e. replace the carpet, repair broken light fixtures, repaint the entire interior and maybe buy a new oven or fridge, holes punched in walls etc.

It absolutely does not matter what rules you establish up front in the rental agreement. You say “no pets” they bring in pets, yous say, “no smoking” they smoke, you say “no more that 2 tenants” they bring in a dozen Mexicans. Paid property managers aren’t worth a s~~~, don’t waste you money. They don’t look out for your interests at all.

You can minimize but not eliminate your problems upfront with careful screening and background checks. I wouldn’t recommend renting to anybody who shows up arms covered in tattoos, green hair, under 30 years of age, doesn’t speak English, has kids, pets, works construction, drives a taxi,
or Ubers for a living.

Also keep in mind, that there is a large contingent of the general population who have perfected the house renting scam into an art form. They have established a completely false identities. If they are women they often use their mothers name so that the background check comes back OK.

In my local area there is a family of gypsies and also several black women who are professional con artists. I think this has become commonplace in every large metropolitan area.
They are a nightmare once they get into your house. You can never get them out without going through a year long eviction process. You might get 1 or 2 months rent out of them at best. But in the end they steal everything of value including the copper plumbing and electrical wiring and invite their friends over to have a final blow out party with the main intention of trashing your home just before they leave.
Section 8 …….. forget about it!

[black_knightParticipant 2602]

As a life long room renter who has lived with a lot of random housemates, I can confidently guarantee that 95% of your tenants won’t give a flying f~~~ about your property, and that you’ll have to spend money repairing it at some point.

[Anonymous 12]

I have an investment property. To be honest I don’t spend a lot of time looking at how much I make off it. The way I see it is someone else is paying off the property for me. Anything that breaks can be fixed and is tax deductible and covered by landlord insurance.

One day I might end up selling it. I would like to get into shares but don’t know much about them and not sure if property is a lower risk.

[Chris1234Participant 353]

Got an apartment in a nice suburb which I have renovated in the past. Managed to find a good agent who was very fussy regarding tenants. Both tenants who have rented been perfect. I also have family with investment properties in outer suburbs which arent as nice and theyve had a few issues. It comes down to the demographic of who will be renting the property, cheap in a s~~~ty suburb is more likely to attract a s~~~ty tenant. A good agent is also critical, youll get s~~~ agents who will stuff anyone they can in there so just be careful. Rented mine out for years and they have almost paid it off for me!

[Old RottweilerParticipant 1520]

I rented my house after my divorce to two white doctors, husband and wife and 1 kid. It was an expensive house in a great neighborhood I had spent 8 years remodeling. They trashed it. When they moved out they wanted their $5000 dollar deposit back. I wanted to sell the house, they said they would tie it up in a lawsuit to delay my sale even though they knew they would lose. Totally screwed me.

I have one rental left, a doublewide on a nice lot. It is rented to a tattooed biker and his tattooed lady. They have been there 10 years and no problems. Rent is always on time.

You have about a 50/50 chance according to my experience. I gave up making rentals like I would live there. Towards the end if they wanted the interior painted I would offer to pay for the paint. You won’t make money unless property is appreciating. They all think you are the rich landlord. You can afford to clean up after them. I could tell stories about bad tenants for days. People trashing your place gets old.

[ZarathustraParticipant 2246]

I am lucky if I can turn a 20% net profit over the gross, with respect to cash flow, but I am probably a little further ahead with the tax write offs, i.e. repairs and mortgage interest are written off. Having said that… there is also my time and sometimes I think I would be better off with getting a part time job.

[SolidusXParticipant 854]

I firmly believe in owning REIT’s over rental properties… With REIT you have none of the hassle of useless renters, always get paid on time, own property all over the world, can liquidate with a click of a button, and can be very diversified. With having the actual rental property you pretty much have the negative opposites of what I just said plus having to navigate mortgages, insurance, and upkeep.

Knowledge is power..... Don't waste your brain on bullshit

[Author]

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