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Thread: Does anyone own rental property?

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    Default Does anyone own rental property?

    I've made it a goal over the next year to buy my first rental property here in the Indianapolis area, and I was curious to know if any of you own some rentals and would be willing to entertain the occasional "hey what do you think of this house for a rental property?" and questions about land lording and buying investment properties. If you could give me some tips on the best neighborhoods to buy in, or share your resources on who I should use for a good contractor for rehab work, realtors, etc... Or maybe you have a property you are wanting to sell that is currently a rental or would be a good rental. Or methods you have used to find those great deals on a rental property.

    Thanks!
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    Default Re: Does anyone own rental property?

    We bought a duplex to "rent" to family members that were in a tough spot. We're not making money from it right now, just having them split the cost of the loan and taxes, etc. I won't be much help as far as the investing side of it, but I do have a realtor to recommend. His name is Bob Harton (Artisan Realtors, 317-797-6466,b.harton@sbcglobal.net). This guy was always on top of everything for us. We were only looking for homes in the $20-$40k area and never felt like our situation wasn't important to him.

  3. #3

    Default Re: Does anyone own rental property?

    In my opinion, I wouldn't be afraid to take a chance on some of the cheap homes on the near-eastside. There are some pockets over there that aren't that bad to live in. Some of those old houses were built to last. There is a community development organization that is making some good things happen in the Englewood area. We're considering taking a chance on another one in a year or two.

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    Default Re: Does anyone own rental property?

    I've watched many of my fellow realtors go bankrupt with the rentals they own.
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    Default Re: Does anyone own rental property?

    Quote Originally Posted by ErikD. View Post
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    In my opinion, I wouldn't be afraid to take a chance on some of the cheap homes on the near-eastside. There are some pockets over there that aren't that bad to live in. Some of those old houses were built to last. There is a community development organization that is making some good things happen in the Englewood area. We're considering taking a chance on another one in a year or two.
    If you're gonna go this route, and you have some cash on hand, <$10,000 or so, you might want to look into tax/short sales. You can get a property for pretty cheap through auction, but you'd need to do your homework. There are websites that list the upcoming auctions, so you can go look the properties over some.

    If you do get properties in lower income areas, I'd also recommend getting hooked up with the local Section-8 office. Finding good tenants can be tricky, you'd really need to do the background checks and talk to previous landlords, and even then you'll get stuck with some bad ones. Section-8 doesn't guarantee you good tenants, although older one's tend to stick around quite a long while/take care of their stuff, but it ensures you get most of the rent each month. If you're a good landlord, they'll (Section-8 office) always have a list of potential tenants.
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    Default Re: Does anyone own rental property?

    Quote Originally Posted by ErikD. View Post
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    We bought a duplex to "rent" to family members that were in a tough spot. We're not making money from it right now, just having them split the cost of the loan and taxes, etc. I won't be much help as far as the investing side of it, but I do have a realtor to recommend. His name is Bob Harton (Artisan Realtors, 317-797-6466,b.harton@sbcglobal.net). This guy was always on top of everything for us. We were only looking for homes in the $20-$40k area and never felt like our situation wasn't important to him.
    Awesome thanks for that realtor contact. That has been one of my main concerns going forward, and its been said to me that its really important to find a realtor that has worked with investors because obviously the criteria is much different than that of a person buy a house for themselves. Did you buy this property cash? or did you have to finance it?

    Quote Originally Posted by ErikD. View Post
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    In my opinion, I wouldn't be afraid to take a chance on some of the cheap homes on the near-eastside. There are some pockets over there that aren't that bad to live in. Some of those old houses were built to last. There is a community development organization that is making some good things happen in the Englewood area. We're considering taking a chance on another one in a year or two.
    Yes I've been looking on the near-eastside around Irvington or Little flower. I don't know much about Englewood though. I'm trying to stay away from Brookside park area. I'm also looking in Eagledale, which is just north of the IMS grounds, and BeechGrove southside in general.

    Quote Originally Posted by Since86 View Post
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    If you're gonna go this route, and you have some cash on hand, <$10,000 or so, you might want to look into tax/short sales. You can get a property for pretty cheap through auction, but you'd need to do your homework. There are websites that list the upcoming auctions, so you can go look the properties over some.
    I have a buddy that does this at the quarterly tax surplus sale. He will go in and buy up multiple properties for a few grand a piece, fix them up and rent them out. He has been very successful at it. But it looks like that strategy takes lot of cash to pull off, and he is able to do it because he has so many rentals feeding his pocket every month.
    I plan to go to the next sale to check it out with him, but I think my first rental needs to be something that is rent ready with little fix ups.
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    Default Re: Does anyone own rental property?

    Quote Originally Posted by graphic-er View Post
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    Did you buy this property cash? or did you have to finance it?



    I don't know much about Englewood though.
    http://www.indystar.com/story/opinio...oods/20102173/

    We had some cash but had to get a 5 year loan on the rest. We were trying to get a mortgage but we couldn't find a bank to give us one on a house that cheap (29,900). Turned out better that way, I suppose. It's funny that article was posted yesterday. It mentions the Englewood area, Washington and Oxford.

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    Default Re: Does anyone own rental property?

    I seen that article and I looked at the website. I'm very skeptical of the impact of their proposed plans for each area. I think the one at 38th and Illinois might have the best chance for major success because it is near Butler campus so you have a good mix of young college kids and the you have many high priced homes just to the north and which means you have an opportunity to capture those folks disposable income from an economic stand point. Plus just to the east you have the fair grounds so there is a lot of economic opportunity there.

    Fountain square is popular because it has Highbrow entertainment options like art galleries and Studio spaces, unique restaurants, proximity to downtown. It was always know as an eccentric neighborhood and it embraced that spirit with the revitalization.

    But i might be looking at it from the wrong view point. I suppose any infusion of investment in an blighted area is gonna increase a real estate investors opportunity to make money if you get in at the right time.
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    Default Re: Does anyone own rental property?

    I don't totally disagree with you. I believe that the Englewood area will improve greatly. But, I also don't see it being the next "Fountain Square" anytime soon either.

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    Default Re: Does anyone own rental property?

    Rental properties can be great money makers.

    Who makes money? The contractors that do the rehab at the beginning and every time a vacancy occurs, especially Section 8, as well as the realtor(s) and the title companies, and the banks that finance it all.

    If the owner of the rental property is lucky that owner might actually be able to tread water or make a little money until inflation truly takes off and investors return to hard asset classes like real estate for protection.

    Of course if you happen to personally know people with HGTV and can get on one of their shows...cha CHING!

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    Default Re: Does anyone own rental property?

    Quote Originally Posted by Brad8888 View Post
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    Rental properties can be great money makers.

    Who makes money? The contractors that do the rehab at the beginning and every time a vacancy occurs, especially Section 8, as well as the realtor(s) and the title companies, and the banks that finance it all.

    If the owner of the rental property is lucky that owner might actually be able to tread water or make a little money until inflation truly takes off and investors return to hard asset classes like real estate for protection.

    Of course if you happen to personally know people with HGTV and can get on one of their shows...cha CHING!
    I take it you have had a pretty bad experience in rental properties?
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    Quote Originally Posted by graphic-er View Post
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    I take it you have had a pretty bad experience in rental properties?
    I think his comment was pretty extreme, but those dangers are out there. I didn't have to do any rehab when we took over our place and I can think of a few of my friends and family who are renters and are good people that take care of the properties and pay their rent on time. But, you do have to consider everything. A hot water heater goes out, you have to pay for it.

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    Default Re: Does anyone own rental property?

    My 1st wife worked at a local bank taking care of mortgage payments. She had one client with 30 rentals for which he paid 10 each month....he had them broken up in thirds. 30 days...60 days and 90 days late. When a group of 10 hit the 90 day point he would pay that group the next month he'd pay the next 10 and so forth. He said that was all he could count on being paid each month. Needless to say he it eventually caught up with him. Another good friend used to carry a gun when he went to collect rent but found the most effective trick was to take his 5 year old son along because people tend to stay calmer In front of kids.
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    Default Re: Does anyone own rental property?

    Quote Originally Posted by indygeezer View Post
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    My 1st wife worked at a local bank taking care of mortgage payments. She had one client with 30 rentals for which he paid 10 each month....he had them broken up in thirds. 30 days...60 days and 90 days late. When a group of 10 hit the 90 day point he would pay that group the next month he'd pay the next 10 and so forth. He said that was all he could count on being paid each month. Needless to say he it eventually caught up with him. Another good friend used to carry a gun when he went to collect rent but found the most effective trick was to take his 5 year old son along because people tend to stay calmer In front of kids.
    Sounds like these folks bought into crappy neighborhoods, and rented to even crappier tenants.
    You gotta do background checks, work history, you gotta evaluate the potential tenants income, etc....
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    Default Re: Does anyone own rental property?

    Quote Originally Posted by ErikD. View Post
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    I think his comment was pretty extreme, but those dangers are out there. I didn't have to do any rehab when we took over our place and I can think of a few of my friends and family who are renters and are good people that take care of the properties and pay their rent on time. But, you do have to consider everything. A hot water heater goes out, you have to pay for it.
    Yeah, thats the type of property i'm looking for. But even if the hot water heat goes out. Whats that cost at most? $400 for the heater from Lowes or Menards, and then another $400 to have a plumber or handy man install it? Water heater breaks every 7-10 years? Realistically anybody with some basic handy man skills can install a water heater. I had by neighbor install mine for about $300 a couple years ago. He spent about 1-2 hours installing it.
    I imagine you pay a lot more if you just call XYZ plumbing company and have them do everything for you though.

    If you are doing it right then you'll hold back some of that rent each month for capital expenditures later on the down the road.
    You can't get champagne from a garden hose.

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    Default Re: Does anyone own rental property?

    One thing we've done to entice tenats to pay is byu "knocking" off $50 from their rent, if they pay by the 3rd. Reality is, we just raise the rent $50 higher than normal. They feel like they're getting a deal, so we've found out they're more likely to pay their rent over other bills in order to get that savings.

    If they don't pay, that $50 works just like a late fee.

    Rentals aren't the money machines people think they are. They get there, once the mortgage is paid off, but most people don't realize how much work/money goes into them when people move out. Renters typically don't take very good care of their living spaces. And that doesn't even include the ******** that trash the place as they're moving.
    Just because you're offended, doesn't mean you're right.” ― Ricky Gervais.

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