Is/was anybody a landlord?

[RoJoHen]

I started a thread a couple months ago about how I want to buy a house sometime in the next year or so. I'm currently renting out the bottom floor of a duplex, and I can't help thinking how sweet a deal this would be if I actually owned the place and was getting rent from my upstairs neighbor.

So I think, when the time comes to buy a house, I am going to try and buy an income property to help offset the mortgage. I told my dad of this plan, and he actually got really excited. He wants to buy the duplex with me and eventually, when I've saved up enough money for my own personal house, he wants to go into the landlording business so he can still have some income when he retires in about 7 years.

Has anybody ever done it before? Any advice?

 

[Finn]

Is your Dad handy? It's a lot of work, not a cash cow as you kinda implied. It wouldn't be much of a retirement. It's a job.

 

[kes7]

We've done it. It's a pain in the ass and hard to make real money if you're doing it on a small scale like you're talking about (especially in this economy -- it was different five or ten years ago). Buying a duplex and renting out half can be a great way to pay the mortgage, though.

 

[John Picard]

I started a thread a couple months ago about how I want to buy a house sometime in the next year or so. I'm currently renting out the bottom floor of a duplex, and I can't help thinking how sweet a deal this would be if I actually owned the place and was getting rent from my upstairs neighbor.

So I think, when the time comes to buy a house, I am going to try and buy an income property to help offset the mortgage. I told my dad of this plan, and he actually got really excited. He wants to buy the duplex with me and eventually, when I've saved up enough money for my own personal house, he wants to go into the landlording business so he can still have some income when he retires in about 7 years.

Has anybody ever done it before? Any advice?

Don't. That's all I'm going to say. An older brother of mine did the landlord game for a while, and it sucked ass.

Look, don't take this the wrong way -- you're young and ambitious, which is good; however, there's no such thing and "easy money" and you need a few more years under your belt. Save up some money and get a starter home for a good price. Renters will be the bane of your existence.

 

[Finn]

^His dad wants to buy it.

 

[Yeoman Randi]

I've never done it but a girlfriend of mine owns a couple of properties now. She's happy with it and hasn't had any problems but i have heard of people getting stuck with squatters or people destroying the property. I guess it depends on who you get as renters (do background checks) and the type of neighborhood. In a college town you always have renters lined up but then again they can destroy the property.
Good luck!

 

[John Picard]

^His dad wants to buy it.

His dad wants to buy the duplex with him, meaning it's a partnership and thereby multiplying the problems. Never borrow from or lend money to relative and never enter into a business agreement with relatives. Sorry, but no matter how well meaning or agreeable both parties may be, being related causes problems down the line. It's very rare when it doesn't.

I've never done it but a girlfriend of mine owns a couple of properties now. She's happy with it and hasn't had any problems but i have heard of people getting stuck with squatters or people destroying the property. I guess it depends on who you get as renters (do background checks) and the type of neighborhood. In a college town you always have renters lined up but then again they can destroy the property.
Good luck!

A few years ago, I was looking at a house I wanted to buy. The neighbors came out to chat with me and I learned the whole story of how the property was owned by the father of one of the residents; however, since he (resident) was a college student, it appeared that his closest 20 friends were there at any given time. In other words, the neighbors were hoping/praying someone such as myself would buy the property because they were fed-up with the rowdy and raucous behavior from both that house and the one next door.

 

[Luckyflux]

It will work if you get the right people renting, nice, normal quiet people that party alittle bit, but have respect for other neighbors and their surroundings.

But somestimes you might end up with the worng kind of tenant. The kind that doesn't care about destruction to your property. The kind that will practice their drum set at 3 in the morning, because it is the only time they are creative. Or the kind that will invite their 10 best friends and family members to stay for awhile.

You'll never know who you are going to get. And what might change in their life in 6 months let's say. The guy that started out quiet and cool, suddenly is turning into a party animal or heavy drinker or constantly fighting with his GF.

I'd say it is a crap-shoot. It will work if you get lucky and get someone cool to live there. It will royally suck balls if you get a jerk-off.

 

[Holdfast]

I'm a landlord, but I pay the letting agency a commission from my rental income find tenants, do all the paperwork, and generally manage the property and deal with any emergencies for me. So I never get involved at all, and just get paid the net income. The extent of my involvement is limited to agreeing the price at the start and signing off the final inventory at the end. Oh, and authorising any unexpected expenses over the agreed threshold level I have with the agency.

That's great for me, since I really don't have the patience or inclination to deal with tenants myself. The income after the management fees are deducted is still considerably more than I need to cover the mortgage and other expenses, so it's a good deal. If I wanted to maximise my income, I'd probably want to take more of an active interest, but as it is, I view that property as a longer term investment so I'm not too bothered by the fact that the annual net profit is a little less than I could potentially get.

 

[WillsBabe]

Join a landlords' association. Meet the other landlords and get their take on things. As others have said, being a landlord can be a lot more complex than it appears on the face of it.

 

[RoJoHen]

I'd say it is a crap-shoot. It will work if you get lucky and get someone cool to live there. It will royally suck balls if you get a jerk-off.

This is probably true. I'm generally not a jerk-off, so I sometimes forget that other people do it so easily.

I'm certainly not saying I want to make a career of it, but I'm not opposed to the idea of renting out a duplex while I'm living on one side and then hanging onto it and renting it out when I eventually get my own place.

In this area, too, it's a lot easier to make a profit from it. First of all, there are several colleges in the area, so there are always tenants available. And the area is cheap. Any place I bought would likely have a mortgage payment of $500/month or less. You can easily rent out a place for that much money and pretty much live for free.

 

[Yeoman Randi]

Personally, i think it's a great idea, especially since you are in a college town (or close to). You'd have to be sure to have a high security and get first and last months rent to cover yourself in case of problems. But i think it is an awesome idea. I wish i could do it.

 

[Noname Given]

We've done it. It's a pain in the ass and hard to make real money if you're doing it on a small scale like you're talking about (especially in this economy -- it was different five or ten years ago). Buying a duplex and renting out half can be a great way to pay the mortgage, though.

^^^
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