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Indy_bueller
Posted on Saturday, April 19, 2008 - 11:25 pm:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only)

I'm looking at buying property for the the first time. I'm trying to decide if I should buy a house, or buy a multi-unit building, live in one and rent the other units out.

Anyone have any experience with this kind of thing, any wisdom to share?
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Corporatemonkey
Posted on Sunday, April 20, 2008 - 05:23 am:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only)

First question I ask to anyone considering this.

Can you look at "your" realestate only as a business? Or would you take it personally if it got trashed?


I know several people who are, or have been landlords. Most have not had positive experiences (personally, or financially). Getting good tenants is difficult. Most place in the country you will get less rent than what the mortgage costs. You will break even if you are lucky.

Now if you get a multi-unit dwelling insure yourself to the max. A business associate of mine owned a lower end apartment building. He had relatively content tenants, offered reasonable rents. Yet some "do-gooder" non profit group sued him because he was an easy target (ie he had $) In the end he was forced to sell his building for cheap to another management group because of the impending litigation.

Last thing if you do not want to manage your own building, there are many companies that will do it for you, for most of your profits.

The only people I recommend renting to are people from three groups.

1) those that can't sell their house, but they need to move. They can offset their costs until it sells.

2) those in really high end markets, such as NY, Bay Area, etc... Place that if you left, you might not ever be able to return.

3) Those with large assets, those able to purchase very large complexes. If you are part of that group you wouldn't be here asking for advice.

(Message edited by CorporateMonkey on April 20, 2008)
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Mxer83
Posted on Sunday, April 20, 2008 - 09:44 am:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only)

I had a 2 flat for 7 years I lived in 1 half & rented out the other, if you have good tenants its fine , if you have bad ones it sucks, be VERY selective on who you rent out to, just my .02 cents worth
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Just_ziptab
Posted on Sunday, April 20, 2008 - 10:24 am:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only)

Can you "legally" be selective on who you rent out to?
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Ferris_von_bueller
Posted on Sunday, April 20, 2008 - 11:12 am:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only)

I recently had business dealings with an Iranian fellow that in the course of exchanging small talk confided he is a landlord in one of the upscale areas of Baltimore City. He started out buying "shells" or fixer uppers, renovating and flipping but when the housing market tanked he switched his focus to renting. The key to success, in his words, are to rent to single professional women or homosexuals because they tend to be the cleanliest.
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Ratbuell
Posted on Sunday, April 20, 2008 - 11:39 am:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only)

You can "select" by running a credit report. Discrimination is a no-no, fair housing act and all.

My wife and I own a duplex that we rent out. 2 units, one excellent tenant (young, single straight male), one has been...less than stellar paying on time (young couple with kid); neither damages or abuses the structure though.

It was purchased as an investment - it was a fixer-upper and we cleaned it up / did a limited renovation for rental appeal - new bathrooms, paint, flooring. Nothing that we fell in love with, just stuff we knew would make it appeal to a renter. And easy materials to maintain - ceramic tile floors are expensive to install, but dirt simple to clean up if needed and they'll last forever (we used 18" tiles - bigger pieces mean less grouting). Carpet is cheap, but a bitch to maintain. Peel-n-stick high-traffic linoleum tiles in the kitchens can be piece-replaced if one gets damaged and they've got some nice looks to them now, not just the high-school-hallway look. Original wood floors were cleaned up and that was it.

The only thing I'd recommend is get something close to home. Ours is a long half-hour to 40 minutes away from our house. The market was right for buying it (the one tenant's rent pays the mortgage) but getting there in an emergency is a bear. However, if you itemize...the tax breaks and depreciations are schweet at tax time (we depreciate our Ram 2500 as a business vehicle in addition to the expenses for utilities, maintenance, upgrades and repairs to the building). We rent with water (city, seperate meters) included; tenants pay utilities (electric, cable, phone) for their units.
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Cityxslicker
Posted on Sunday, April 20, 2008 - 12:30 pm:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only)

Rent Pacific Heights, watch it weekly until it helps you decide one way or another ;) And then just to instill your faith in humanity, watch Dead Calm.
Best of luck to you.
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Bill0351
Posted on Sunday, April 20, 2008 - 01:40 pm:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only)

I owned a duplex for a while until I sold it to build my house. (Uhh... ex-wife's house.) It was a pretty decent experience. It helped me build up a lot of equity very quickly. I was extremely selective with the people I rented to, and had almost no problems.

It has been a while, but I remember that the rules are much different for owner occupied than they are for a regular rental. Check with a lawyer, but I think you can be much more selective if you live on the premises.

Bill
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Azxb9r
Posted on Sunday, April 20, 2008 - 02:17 pm:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only)

Check the laws in your area, and see what rights YOU would have as a landlord.
As others have mentioned, who you have as a tenant makes a big difference.
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Brumbear
Posted on Sunday, April 20, 2008 - 07:11 pm:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only)

If you go with a multi make sure you can carry the mortgage for at least 9 months solo incase you have to. insure the hell outa it be careful of taxes and make sure you have $$ for any big repairs good luck
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Nevrenuf
Posted on Sunday, April 20, 2008 - 08:46 pm:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only)

a good friend of mine that i had done side work for years for bought an old baracks that the elderly lady owned had turned into 5 apts. we went ahead and turned it into 8. rebuilding this thing while people lived there from top to bottom, literaly. tried to make it idiot proof as much as possible by using semigloss paint and frp board on all walls in the bathrooms, sealing the cabinets under the sink to limit water damage and just keeps it as simple as possible. it's in an industrial park so the neighbor hood isn't that great but he keeps them rented. plus because he's on a week to week basis, he can get the people evicted a lot quicker than if he had a lease. sometimes it only takes a week. of course he had to find this out the hard way. they usually get trashed by some of the people but before anyone ever moves in they get cleaned back up pretty good. always know what your options are for evicting someone. before he found out what he could do, he had one couple in there for about 2 months rent free.
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Bake
Posted on Monday, April 21, 2008 - 10:09 pm:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only)

Another duplex owner, my tennant is basically buying the place for me, hard to go wrong. So far (10 yrs ownership) my renters have been pretty decent people.
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Brumbear
Posted on Monday, April 21, 2008 - 10:33 pm:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only)

that would not be possib;e where I live the mortgage is usaully less than the taxes on a multi dwelling it can be brutal
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