My husband and I each have stable jobs, but with the average 3% per year pay increases, we're only keeping up with inflation. We live in San Diego and are thinking of purchasing a condo in a few months to use as a rental property. This would be new for us, so I wanted to see if there was anyone else out there looking to do the same (or someone who has recently done this!) to get some advice on what you've heard, where a good place to learn more, etc. is. Thanks!
2006-11-27 04:29:11 · 4 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
Here's the thing about rental properties:
1. Make sure you have at least 10% down for the purchase, because most lenders will not go higher than 90% LTV on an investment property.
2. Make sure you either know how to perform maintenance on the property, or know someone who is both skilled and honest. You'll need to know someone who can do plumbing, roofing, gutters, windows, drywall, flooring, landscaping, the list goes on.
3. Start looking for tenants when you sign the purchase agreement. You don't want that property sitting empty.
Rental properties can sometimes be a pain. But, they can be very lucrative. I have a former client that owns about 10 of them, and makes a buttload of money of them. You may also want to look into a property management group.
2006-11-27 04:43:33 · answer #1 · answered by togashiyokuni2001 6 · 1⤊ 0⤋
I assist investors with this type of thing and they all have 1 common bit of advice. Only purchase what you can keep an eye on yourself. There are many that use management companies and I am not knocking them but I can only say that the investors I work with all manage their own properties...and these are Orange County Cal investors some of whom have 89 rental units in Orange County.
It is an awesome source for supplemental income and the current market is yielding opportunities for those in the position to take advantage of them. As far as inflation...you are in one of the best markets for overall appreciation and if you are buying with long term objectives should do well.
I write a blog on much of this. Check it out for more info. Hope this all helps.
2006-11-27 12:49:12 · answer #2 · answered by Anonymous · 1⤊ 0⤋
Not a bad idea, start with something affordable, much better if you get a duplex instead of a large house, that way you get one rent in case the other is available, you must have a reliable and not expensive repair person for manteinance, much better if you know how to do it yourself, Don´t start right away. do a lot of research on the neighborhood and look for bargains, specially houses that are in bad shape on the exterior but ok structurally speaking, that way you get a good price for it and you can remodel it with just some paint and light repairs.
Compare the price and the rent you will get for industrial, commercial, offices and houses.
Sometimes you get a lot more for an office and the construction and manteinance costs are lower.
My family began doing this in the times of my great grandparent
and my brothers and I are still doing it.
2006-11-27 13:02:51 · answer #3 · answered by bayphoto3001 2 · 1⤊ 0⤋
Great idea! But prices are high right now. Especially in your neck of the woods. If the market drops you can end up with negative equity for a decade. I'd wait. Spend a year or so learning about it. You can do great but it's never easy. And DON'T use creative financing. If you can't afford it with a conventional mortgage, you can't afford it. Meanwhile you can park your cash in a good bond fund or a CD. You may even be able to afford two!
2006-11-27 13:03:20 · answer #4 · answered by Big R 6 · 1⤊ 0⤋