how possible is it to be a land lord and how low risk is it and would i make some good money at it?

Answer 1

Huge risks. Pain in the behind. Make good money.

Almost anyone with decent credit and a job can be a landlord. Best thing to do is purchase a duplex that you live in one unit, or even a 3 or 4 unit. First, because you live in it, the financing options require less down with better rates. Second, you're there onsite to keep an eye on things.

Live in this home for 2 years. If, at that time, you think you still want to deal with managing properties, you can sell it, take your cash almost 100% tax-free, and buy another. Or spread your equity and buy a couple.

Lather, rinse, repeat. Keep selling and buying up until you have hundreds of units.

This is a good way to get into it with as low a risk as possible, since you are housing yourself too.

Answer 2

the first answer makes it seem soooo easy. tenants suck. they are a rip roaring pain, abnd don't care a big rats about you, your property, or your life.
the minute they are inconvenienced a bit, you hear from them, and they expect you to solve their problenm, about ten minutes ago.
if you have many teneant expect at least one to pay later than you need your money.
to solve this problem, offer a dioscount for early payment. if my rent is 350, i say the rent is 400. if you pay onm or before the 5th you can take a 50$ discount. the courts rarely uphold late fees, but do uphold this arrangement.
if you aren't handy, and professional being handy you will pay large amounts for ineviable repairs.
scereening tenents is an art into itself.
to solve this problem, ask for the current landlords phone number, and the prior landlords number. you don't much care what the current landlord says, call the prior land lord. as both the same question. Would you rent to this person again? their answer is your answer.l have never had a problem since i went to this format.
occasionally someone won't have a prior landlord. listen to their story, then say no thanks. if a person is a prior owner, look at the house they moved out of.
the money is in slum housing you can get an otherwise qualified person a landlords certification if they have no0 certification.
asw a condition on the contract, make it mandartory thsat all rent comes directly to you from section 8 housing, and if this ever changes, it is grounds for immendiate no notice eviction. this provision is usually upheld by the courts. it is not discriminatory.
once you get a section 8 person in, itis nearly impossible to get them out.

Answer 3

well, you have to buy rental property to be a landlord. you must learn what codes are and make sure your building conforms to them, or else your town's building inspector could make you close down an apartment!

low risk? high risk? well, low risk TENDS to be in neighborhoods that are established, low crime, good schools, etc. and high risk are usually the bad, dirty neighborhoods that show no pride of ownership (in the general buildings' upkeep), but there are a lot of other risk factors.

you need to go to a bookstore and pull a bunch of real estate investing books off the shelves, buy a cuppa javabrew, and read about owning, joys, tears, pros, cons, and what the experts say about it.

just know that nothing is easy. making money in any way, any career, is not easy. the world is not easy. competition abounds. you'll know that when you have a "low risk" building in a low risk hood and your tenant leaves without giving you notice just before the mortgage payment is due.

seriously, i want you to have the best of fortune in doing this, just study up. if you do it successfully, you are going to be making one of the finest decisions for your future that you can make ever in your life. study up and analyze the type of person you are, because handling tenants does take having patience.

EDIT: fukinluck has a great answer, but he didn't mention that you pay capital gains taxes to uncle sam, bigtime, if you do not structure your sales and buys correctly. talk to a tax attorney, a CPA, an estate planner, and a real estate attorney that has done at least 3 "1031 starker exchanges" in the past year.

Answer 4

It's extremely possible. Possibility for good money. Reasonable risk.

Certain things are essential:
1. Background checks on all tenants (including family members).
2. Fairly large deposits (generally a deposit equal to a month's rent, plus the first and last month's rent).
3. A good collection schedule (I collect from my tenant each Friday. In a lot of states, if they default, you have to wait an entire rent cycle before eviction - a week loses less money than a month). Also, make sure rent is due IN ADVANCE. If my tenant moves out during the middle of the night, it wouldn't faze me at all, because she'd only be robbing herself.
4. Money. Unfortunately, unless you're a hell of a salesman in a market where most people are cutting and running, Robert Allen's nothing down deals are nearly a pipe dream. You can borrow a small down-payment amount from www.Prosper.com for a reasonable rate (remember that they only give you three years to pay it off).
5. A personal set of rules. How much do you want to rehab a place? Do you want to take out a loan on the property, or just buy it with cash (I've never taken out a loan - if you're willing to do a lot of work, a decent property can be under $10k) ? How much money do you want to make each month, after everything? Do you want to use an escrow company to withhold property taxes (takes less discipline, but leaves less cash for emergencies, and there's always a fee) ?
6. A very good, legally-binding lease contract (if your state allows leases -- Indiana's great because we do).

I built a spreadsheet that I'd love to show you to find out if any given property is cashflow-positive, but since I can't do that here just think through this:

-What is the gross rent? Let's say $500.
-What do you want per month? Let's say $200.
-What are the yearly property taxes? Let's say $800 (don't let semi-taxes confuse you... that means you pay that amount TWICE each year)
-What does the property cost? What is it worth to you? Let's say $25,000 as the average between those two.

So each month you have $300 to divey up between a mortgage payment, saving for the flub (repairs and lost rents) and the property taxes. The taxes are about $70 a month, the flub should ideally be $208... hmm, that leaves $30. So something's gotta give.

Decisions like that will be very good for you, and once you have your system in place, most properties will all but run themselves. A good way to keep your tenants from bothering you is to offer to pay for repairs if THEY call the repairman, or to keep somebody on retainer. If there are a huge number of problems with a place, you might need to overhaul it. Expensive in the short-term, with potentially high payoff later.

There are about a bajillion books written about rental properties, and they make it seem really complicated, but it's just like building a business or starting a job -- you'll make mistakes, you'll learn from them, and if you stay with it you can do very well.

But be warned, the streets are littered with the corpses of properties people bought while high on some sales pitch. When something seems easy, you're probably forgetting some detail. When something seems hard, you may be overthinking just a little.

A lot of real estate gurus got their start during housing crashes, when some change in the law drove out all the speculators and fadsters. In the process, you can meet "flexible sellers," who may be willing to give you an amazing deal. Some will sell you their house on great terms or for a great price. Look through ads, travel through neighborhoods, and you'll find diamonds in the rough.

Also, most people think that tenants are bad. Most everyone I talk to has had tenants who trashed the place, who let their kids run wild, who stripped the place when they left, and just generally did passive-aggressive, sociopathic things to an unfortunate property. While there's no cure for this syndrome, I have found two effective treatments:
1. Be a friend to these people (while making sure the law is on your side), and let them see you as a regular person and not some big rich guy who's just cheap. After awhile, they'll start trying to earn your trust. Pretend to give it to them.
2. Find people who are most likely going to want to buy the place off of you. Small, young families are frequently a good bet. Retirees might not want to buy the place, but they're also less likely to throw wild parties.
3. Make your tenants love the place by letting them feel like it's their place. This works best on single-family homes. You'd be amazed how much pride people take in a property where they mow the lawn, they clean the gutters, and they paint the walls whatever color they so desire. Also, they'll be more likely to stay longer, even if they don't buy it.

Keep that stuff in mind, and your risk drops dramatically. Think of your properties, not as a job that you own, but as an investment. You don't buy stock and expect to work at making it more valuable, do you? Of course not. The more advanced planning you do, the less grunt work you'll have to do trying to manage today's crisis.

And for the record, I bought my first place before I had a job. There's always hope, unemployed people.

Answer 5

WOW, nothing further to add to fukinluck's response. Excellent answer.