Are your older single family houses renting?

[Walley]

I was just browsing through some realestate sites and looking at houses that were in the 50k range. Most of them were made in the 1950's. Anyone else have houses from that era that rents? What is your vacancy rate? My mind can't understand how that will rent. Just need some inputs.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[yveskleinsky]

You are best off researching your area to see what types of properties rent and for how much. ...There are areas of the US where homes were built in the 1850's and they rent great- all depends on the area. Start by contacting a property mgmt company and ask them about homes in the $50s and see what the demand is.

 

[Runum]

I agrre it depends on the area. All of my properties were built in to 1950's. All have updated electric and most have central AC/heat. I have no problem renting them out. I make sure they are clean and safe and I keep good tenants. Out of 4 houses I had 1 house vacant 1 month in 2007. My 3/1/1 SFH, central AC/heat, about 900 sq.ft. rents for 700 plus bills each month. The guy pays 3 days early every single time. You will have to check out your area.

 

[Diane Kennedy]

I LOVE this market downturn. We're all rented up in Phoenix and Colorado Springs.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Walley]

You are best off researching your area to see what types of properties rent and for how much. ...There are areas of the US where homes were built in the 1850's and they rent great- all depends on the area. Start by contacting a property mgmt company and ask them about homes in the $50s and see what the demand is.

Thanks I didn't know that property managements have that kind of information. Where can I find information about the neighborhood such as crime rates, average income, etc? I remember seeing some sites with city and state, but not detailed to zipcodes.

 

[yveskleinsky]

Your best source of information (as a general rule of thumb) are you own two eyes. Drive an area that you like and get to know it well. What is that area like at 6am? 6pm? What condition are the homes in? Does the area seem to be up and coming or slowly sinking?

If you are interested in rentals- call 3 or more prop. mgmt. companies and ask them what types of homes are in the most demand and what kind of rents they are getting for these homes. You may also want to add that you are considering buying homes in the $50k range. They'll probably pair you up with an agent who can (possibly) assist you in your search. You conversation should go something like this:

You: What are homes in x area with 3 bedrooms, 2 bath and a 1 car garage renting for?
Prop. mgr.: Between $400-$550/month. (Just made up numbers here.)
You: Hmm. How long do these homes generally stay vacant before you get another tenant in?
Prop. mgr: X amount of time.
You: Hmm. Do you have an agents that work with investors and can help me find a good rental property to put in your prop. mgmt. pool?
Prop. Mgr: Yes we do.

...Now, let's say you meet with an agent and he/she shows you 10 homes that are in the $50k range. How do you determine if one is a better investment than the other? **Key question here!

There's lots of ways to go about it- generally speaking 3 bedrooms rent better than 2 bedrooms- but also pay attention to the surrounding area. Does the house next door have broken windows and cars parked in the front yard? If so, you may want to keep looking- however- it depends on your plan and comfort level.

Let's say you find a house for $50k. Now, how do you determine if you will make money? Well, you know based on what the prop. mgmt. company told you that homes in that area rent for around $400-$550 a month. Ask them what they would rent your home at, and that is the amount you would base your other numbers off of. So, if you think you'll get $400/month. Then all of your expenses including your mortgage and prop. mgmt. fees need to add up to less than that number.

Keep in mind this is a standard way of buying a property- there are MANY creative ways of going about it (REO, pre-foreclosure, etc).

Good luck to you and keep us posted!

 

[Walley]

If I buy a house for renting purposes do I have to form some kind of business entity?

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[yveskleinsky]

You don't have to- but it is generally recommended that you do. ...And you'll get different answers from everyone you ask! Lots of people, form an LLC to buy properties in- that way if someone slips and falls they sue the owner of the property- the LLC and not me. Since the LLC has no assets outside of the property itself, they can't get much. I have also owned several properties just under my name (this was because banks wouldn't give me a loan if I was buying it as an LLC).

 

[phlgirl]

In JAX, almost all of our properties were built sometime in the 50's - we have no problem renting them.

It was actually a culture shock, when we arrived here almost 2 years ago, to hear that these properties were considered very old! Coming from PHL, where homes are often over 100 years old, this seemed very odd to us.

Like Runum, we ensure that if the HVAC, electric & plumbing have not been updated that we take care of that up front.

Good luck.

 

[Walley]

Houses around 50k around here are pretty much consider the ghetto. Anyone have similiar houses? I'm guessing some of the houses in 50's that people that posted on this thread are consider trendy? Also if I were to purchase a home anytime soon for renting I will not have much to put down if any, does anyone know off the top of their head if I can get a VA loan for rentals?

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Redshft]

Houses around 50k around here are pretty much consider the ghetto. Anyone have similiar houses?

Do you mean does anyone else rent in bad areas of town? If you don't feel safe going to a certain area by yourself to check on your property, maintain, collect rent...don't buy a rental in that area.

 

[Walley]

Do you mean does anyone else rent in bad areas of town? If you don't feel safe going to a certain area by yourself to check on your property, maintain, collect rent...don't buy a rental in that area.

It's not that I don't feel safe. It's not an area I want to live in.

 

[Runum]

My best rentals are in areas that I prefer not to live in. Built in 1950's and I bought them in the 50K range. The area isn't violent bad just busy, crowded, and noisy. I honestly wouldn't try to invest or rent out a property that I wouldn't feel safe in. However, I prefer my country settings to live in.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Walley]

My best rentals are in areas that I prefer not to live in. Built in 1950's and I bought them in the 50K range. The area isn't violent bad just busy, crowded, and noisy. I honestly wouldn't try to invest or rent out a property that I wouldn't feel safe in. However, I prefer my country settings to live in.

How often do you have to pay for maintenance for a house in some place like that? I was looking at simliar houses.

 

[Runum]

Well, I am still a fairly small fish in the sea. So I do all of my own maint and most of the improvements and repairs. As far as maint goes, I do preventative maint 2-3 times a year(loose doorknobs, weatherstripping, caulking, ...). I do repairs when I get the call and as soon as I possibly can. Maybe 1-2 times a year for each building. I do that and work a full time job.

 

[LarryG]

Another reasonable source of information is to buy a lunch for the local police, EMS or Fire department guys and ask them about the area you are interested in. I've met many of the police officers who "patrol" and look for investment properties.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Runum]

Great ideas. +++ rep.

 

[venom]

Your question is too general
There is too much variety in markets to make blanket statements. What rents in one area isnt going to be the best in another area.
The best bet is to learn as much about your "farm" area as possible.
Look at the papers over the weekend and see how many listings there are.
You can also put out a "generic" listing for the area and see if you have a decent response.
One of the things you might run into is slower appreciation. Especially if your competing with an area that has room for growth ie newer housing.
As someone else mentioned look at all the specifics
My biggy is how good the schools are. In theory I want to have families that will pay the rent on a regular basis.
Of course crime and other stats are important as well.
Rob
ps All my homes are rented except the one that had a fire. Yes another fire. yikes. We actually had just finished doing the eviction process. The insurance pays the rent. Then there are one or two that will get evicted soon.

 

[phlgirl]

Your question is too general
There is too much variety in markets to make blanket statements. What rents in one area isnt going to be the best in another area.
The best bet is to learn as much about your "farm" area as possible.
Look at the papers over the weekend and see how many listings there are.
You can also put out a "generic" listing for the area and see if you have a decent response.
One of the things you might run into is slower appreciation. Especially if your competing with an area that has room for growth ie newer housing.
As someone else mentioned look at all the specifics

You are exactly right Venom. Excellent point. I, for one, answered the question far too literally, when in fact the answer should be.....it really doesn't matter, unless you happen to live in down the street from me. ++++

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.