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Landlord pros and cons?


Pancho

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15 hours ago, CBT said:

 


Can you talk about your experience with Rentredi a little more? I’ve been looking at getting something else to use, but I’m not sure it’s worth the cost. We basically use spreadsheets and quickbooks for all tracking now.

My partner handles most of this side of things, but it's a pretty powerful application. I think you can connect it directly to quickbooks so when a tenant submits a maintenance request through Rentredi and a contractor goes out to fix it you input your invoice into that maintenance request and it also sends the info to QB for you. Tenants pay their rent through RR and we get emails when it's paid. It takes prequals and applications when you are trying to find a new tenant so you have all of that in one place too. It works great for us since there's two of us trying to manage things and we can both see all the same data on our dashboard that lets us know what needs to be done.

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  • 2 weeks later...

Own a house in Austin that we rent out plus somewhat manage my parent's rentals based in San Antonio for 7 total houses.

With low interest rates, it can make a lot of sense. If my austin house wasn't such a steal interest rate wise as started as primary residence for years, I would not be a landlord.

I self managed and have property management co on a few houses. It is all hit our miss. I have not found any consistency in property managers or renters. All properties are around 4/3 single family houses that go middle income. We have tried social good based rentals and also trying to price as high as possible.

None of it matters in assessing the tenant so basically just cycle through tenants until you get good ones then treat them well by not trying to over index in rent increases.

I am sure you can eek out a few nominal % improvements with strong property management but think most returns are based on type of asset you buy, pricing, and cost of capital. This excludes grossly mismanagement.

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On 1/10/2024 at 2:08 PM, PvilleStang said:

Wife and I manage 3 units ourselves.  She's the numbers guru and deals with getting the tenants and setting rents.  I will tell you, buying right now in Austin for a rental is a huge PITA.  You can get 5% on T-Bills, or make 3-4% ROI on renting a unit you purchase OUTRIGHT.  If you mortgage it, you're lucky to break even right now in the market.

Thank you for posting this.  I own zero rental properties, but have been considering it.  And your comments confirm my initial investigations.  Buying rentals in high-demand locations (Austin, etc.), esp. with high interest rates is going to generate negative ROI.  A simple zillow search will show you that meeting the 1% rule is impossible in most of Austin these days.  A house for sale for $500k in 78750 has a zillow rent estimate of $2100.  And there's one around the corner for rent at $2100.  All of those houses sold for $150k in the late 2000s and early 2010s.

Right now, we are considering places in the midwest with high potential population growth areas will relatively flat appreciation.  Some of those are places that will benefit from CHIPs act dollars (NW Indiana; Indy to Purdue corridor), Columbus, OH, etc.  Many of those places appreciated greatly during the low rate and COVID days, as they are decent places to live in the midwest.

Housing around college campuses seems interesting, but you either (1) have to have one of your kids occupy it and rent other rooms or (2) get it for dirt cheap and be tolerant of having a significant amount of wear and tear.  The "dirt cheap" does not really seem to exist these days unless you want to put another $100k to fix it.

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21 minutes ago, boilerhorn said:

Thank you for posting this.  I own zero rental properties, but have been considering it.  And your comments confirm my initial investigations.  Buying rentals in high-demand locations (Austin, etc.), esp. with high interest rates is going to generate negative ROI.  A simple zillow search will show you that meeting the 1% rule is impossible in most of Austin these days.  A house for sale for $500k in 78750 has a zillow rent estimate of $2100.  And there's one around the corner for rent at $2100.  All of those houses sold for $150k in the late 2000s and early 2010s.

Right now, we are considering places in the midwest with high potential population growth areas will relatively flat appreciation.  Some of those are places that will benefit from CHIPs act dollars (NW Indiana; Indy to Purdue corridor), Columbus, OH, etc.  Many of those places appreciated greatly during the low rate and COVID days, as they are decent places to live in the midwest.

Housing around college campuses seems interesting, but you either (1) have to have one of your kids occupy it and rent other rooms or (2) get it for dirt cheap and be tolerant of having a significant amount of wear and tear.  The "dirt cheap" does not really seem to exist these days unless you want to put another $100k to fix it.

I bought a home in north central Austin for $128k in 2007.  It rented for ~$1300 at the time.  Now it’s worth $400k and rents for only $2200.  The math just doesn’t work right now.

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22 hours ago, boilerhorn said:

Thank you for posting this.  I own zero rental properties, but have been considering it.  And your comments confirm my initial investigations.  Buying rentals in high-demand locations (Austin, etc.), esp. with high interest rates is going to generate negative ROI.  A simple zillow search will show you that meeting the 1% rule is impossible in most of Austin these days.  A house for sale for $500k in 78750 has a zillow rent estimate of $2100.  And there's one around the corner for rent at $2100.  All of those houses sold for $150k in the late 2000s and early 2010s.

Right now, we are considering places in the midwest with high potential population growth areas will relatively flat appreciation.  Some of those are places that will benefit from CHIPs act dollars (NW Indiana; Indy to Purdue corridor), Columbus, OH, etc.  Many of those places appreciated greatly during the low rate and COVID days, as they are decent places to live in the midwest.

Housing around college campuses seems interesting, but you either (1) have to have one of your kids occupy it and rent other rooms or (2) get it for dirt cheap and be tolerant of having a significant amount of wear and tear.  The "dirt cheap" does not really seem to exist these days unless you want to put another $100k to fix it.

That’s why I have been looking at Kansas City. The math seems to work better and there is strong demand for rentals there. There are some places in the south where the math works as well.

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On 2/3/2024 at 12:22 PM, boilerhorn said:

Housing around college campuses seems interesting, but you either (1) have to have one of your kids occupy it and rent other rooms or (2) get it for dirt cheap and be tolerant of having a significant amount of wear and tear.  The "dirt cheap" does not really seem to exist these days unless you want to put another $100k to fix it.

I own a rental in a good location near a large university that doesn't have enough student housing of its own. Mine is a 3br/1ba with a great back yard. It's in an area where the homes are primarily owner-occupied; For resale purposes I purposely avoided the nearby 'student ghetto.' I can be selective about who I offer a lease to. Wear and tear hasn't been a problem but the house has original (late 1950s) hardwood floors and is basically bulletproof. Also college students have low expectations. At least here in Fort Collins if students are renting a house they'd rather have a full year's lease rather than, say 11 months, where the lessor has time to paint, make repairs, etc. The house hasn't been vacant even for a day since I've owned it. Each of the students and their respective parent sign the lease so they're all jointly liable for the full lease amount if things go haywire but that's never been a problem.

I was managing the property myself but late last year hired a guy because I've gotten a lot busier and have upcoming travel. Plus the newest generation of undergrads is...different...they seem more challenging/less pleasant to communicate with. I pay the prop manager about 8% but he not only takes any phone calls, his fee includes any maintenance that doesn't require a professional.

My strategy is dual: make it a higher-end (student) rental, while also keeping it in good condition should I decide to sell (a long-term flip).

I did get very lucky because when I bought it during inspection my roofer found enough hail damage that he was able to talk the previous owner's insurer into covering a new roof. While it wouldn't have been anything i would have had to do immediately, it did save me about $13k near-term. I also put in a new, good quality, Carrier HVAC and smart thermostat; previously the house had only a gas furnace. The AC allowed me to increase the monthly rent and paid for itself in a little more than a year. [A friend's son works for one of the large hvac firms and does work on the side. That saved me ~30% off a new system.] I put a new $3k fence around the backyard and allowed 'well-behaved' pets in the rental for a non-refundable deposit plus an extra monthly fee. The fence paid for itself in less than 2 years. My larger OOP expenses that don't necessarily have an expected return were painting the exterior- but it had to be done. I also put in GFCI outlets, new switches and ceiling lights throughout because the old, originals were janky. Also some plumbing repairs.

As of Jan. 1 CO outlawed non-refundable pet deposits and they put a ceiling on the amount of 'pet rent' that can be charged so I have to figure out how the market is responding prior to either renewing the current lease or putting it back on the market. Before or just after spring break seems to be the sweet spot for Aug 1 to July 31 leases.

 

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On 2/4/2024 at 12:13 PM, Larry T. Spider said:

That’s why I have been looking at Kansas City. The math seems to work better and there is strong demand for rentals there. There are some places in the south where the math works as well.

If you are serious about the area, give or take, shoot me a pm.

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Anyone have a rec for a good property manager in Dallas?  I've handled myself for the past 6 years but getting tired of dealing with tenants directly.  Latest issue (daily complaining about taking a few extra days to get AC unit installed due to part having to be ordered) has made me start thinking it might be worth it to outsource.

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12 hours ago, Skipper said:

Anyone have a rec for a good property manager in Dallas?  I've handled myself for the past 6 years but getting tired of dealing with tenants directly.  Latest issue (daily complaining about taking a few extra days to get AC unit installed due to part having to be ordered) has made me start thinking it might be worth it to outsource.

It’s February. “Quit yer bitching”

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On 2/29/2024 at 10:53 AM, Skipper said:

Anyone have a rec for a good property manager in Dallas?  I've handled myself for the past 6 years but getting tired of dealing with tenants directly.  Latest issue (daily complaining about taking a few extra days to get AC unit installed due to part having to be ordered) has made me start thinking it might be worth it to outsource.

Yeah. Whether someone is renting or owning, things are going to break, and it just takes time to fix them. If you’re not willing/wanting to be the asshole then it is worth it to hire someone to tell a tenant to stfu about something like an AC unit in February / March. 

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2 hours ago, UT_OB1 said:

Yeah. Whether someone is renting or owning, things are going to break, and it just takes time to fix them. If you’re not willing/wanting to be the asshole then it is worth it to hire someone to tell a tenant to stfu about something like an AC unit in February / March. 

Yeah, it's not that I'm not willing to be an asshole, more like I've got a real job so at times would be nice to just not have to deal with it.  Particularly if they place tenants for you at a reasonable price.  My current tenant still have about 6 months on the lease so not in a hurry but may start looking into it over the summer.

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