If you, are there any websites or primers you'd like to share? I've checked out a number of books at the library, but none of them are recent enough to have contemplated how today's market is effecting purchasing homes for rentals.

I am trying to think of jobs that will allow me to spend more time with the family, and if I had a portfolio of properties, it might just allow me to do that....

I have none but add headaches to your portfolio as well from what I have heard. With the current situation in the housing market I am not sure it would be wise either based on the rate of foreclosures from owners who thought renting was an option that would be feasible. There are a great deal of vacant homes here that faced that.

But in my head, that's the point. Foreclosures are through the roof, and REO inventory is getting larger. That should mean that I would be getting a great deal on the purchase, and can pass those savings onto the renters.

I have no doubts at all that it is an extremely competitive market right now for renters.

A friend has had a slew of rental properties since his medical resident days. He figured it was a way to help pay off student loans faster. The added burden of being the landlord/repair guy/snow plow guy in addition to his regular work & family responsibilities helped to land him in the hospital with a massive heart attack at 40


Are you handy or do you have a list of reliable reasonably priced repair people?

My general understanding is that before going into any property ownership, you should consult with an RE attorney and tax/business planner. Operating rental properties (and especially doing maintenance etc yourself) can open you up to potential major liability lawsuits (tenant is injured due to negligence, etc). It's something I've looked into, but decided against it at this point in my life. Maybe when my kids are older and my wife and I are looking for a "hobby". If I were to do it, I'd make sure to budget adequately to have professionals do repairs and property (e.g. tenant) management. Too much of a headache IMO if you're managing tenants yourself.

Another thing to keep in mind when analyzing cash flow etc is to never assume a 100% occupancy rate. Make sure you have enough free cash to cover one (or more) apartments for months or even a year. Also, make sure you understand laws and practices around tenant eviction if/when you get a bad tenant who won't pay and won't move out.

I'm very handy, and can handle most every repair/installation outside of major plumbing/structural/electrical. But I can do flooring, cabinetry, sheeting, taping & mudding, shingle and minor siding repair, windows, bathroom plumbing, etc.

Great points Blue, I would certainly need to have a significant insurance policy in place and I would only operate this as an LLC to attempt to protect my personal holdings. Good point about the cashflow. I would only get something where I could handle the payment without a tenant.

My inspiration for this is my Father in law, who has tenants in both Washington and Ft. Lauderdale and has had great success with it. I've been speaking to him about it a little bit, and I feel like with his experience and my handiwork, we would be a good team.

Well if your FIL has houses out of area he has a good property management firm he can rely on. The other option is, if the property is large enough, an on-site manager that can function as a maintenance person too.

What size properties are you looking at? Singles? Doubles? More?

Student housing? Seniors? Section-8? General?

Do you know the area very well that you wish to invest in?

Underwrite, underwrite, underwrite and never assume the best, assume the worst and see if you can make money on that underwritten assumption.

No, he doesn't have a management company, but he does have a good friend nearby that can handle the day-to-day if something comes up as well as me if it's something major.

I'm looking at single family mostly, both in a highly military area, and also in a university area. I do know both areas very well and which areas are bad, okay, and border.

Agree with you when you say assume the worst - it will really have to be the right place to make it work.

If you are cut out for it, it is definitely a way to leverage your investments, but as blue said, protect yourself with an LLC. Also, you have to factor in vacancy rates, as everything is not always rented, and also plan for the "tennant from hell", as everyone will get them. I had a friend with a rental, and when his left, it took him 3 months to get the unit back into rentable condition, and the security deposit did not even come close to coving his losses. Also, check into the renter statutes in your area to find out if it "renter friendly" or "landlord friendly". Where I live now, landlords have no rights, and it is impossible to evict someone.

be prepared to go to court as well. Damages, eviction, deposits.

sounds like your FIL has got a decent pool of tenants or maybe screening them in the right way.

My dad did it for 20 years on one single family home. One tenant pretty much soured the whole thing for him and he sold the property.

My FILs properties are all pretty upscale tbh, so his tenants are usually on the up and up. Actually, his place in DC was awarded some sort of architectural award about a decade back. BUT he started out just like I did, buying regular places and then moving up as the opportunities came up.

If my wife kicks me out the first guy I'm going to for a rental is your FIL

IMO, go for it. If you feel you're getting a good deal on a place, know that the rents can cover all expenses and earn you a profit why not? Of course there's risk, there's risk in just about any investment, just know what they are and how to handle them before proceeding.

Heh, he has an opening if you do! Someone got laid off...

Consider getting a large personal umbrella policy in addition to whatever else you get. It's relatively cheap, and provides coverage for things like this as well as other issues.

normally I don't recommend fatwallet but their finance forum is very good with many information you needed. You can search or even start a thread. Many experience landlords over there too.

kindof forgot about them, but I do recall a while ago them talking about that. That's good advice maestro.