Author Topic: I'm looking to get into renting out property  (Read 8418 times)

typie

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I'm looking to get into renting out property
« on: August 02, 2014, 02:48:50 PM »
I was curious if you could help me out.  I am currently homeless, I spend next to nothing on food, and I haven't spent money on clothes in over 4 years.  I am currently making about 60k a year, and expecting to be getting a raise in the next week-next couple of months to be making about 3500 a week.  I currently have 15k in my bank account.

My thought is that I'd like to buy a few vacation rental properties in an area that's slow to recover.  I've been looking at rooms going for 50-60k a year with about a 300 dollars a month HOA.  Similar rooms are listed for a little over 100k in the hotel, and the rent comes out to be about 200 a night.

Does this mean if the hotel stays full, I'll be making 1400 a week, or does the hotel keep some of the money made off selling the rooms?  I'm just trying to figure out about how long it would take for each room to pay for itself.

waltworks

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Re: I'm looking to get into renting out property
« Reply #1 on: August 03, 2014, 12:07:44 AM »
I have never heard of buying a hotel room. Are you sure this isn't a mixed hotel/condo/timeshare sort of situation? Sounds like you need to do a LOT more research on the specifics of how this would work.

-W

typie

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Re: I'm looking to get into renting out property
« Reply #2 on: August 04, 2014, 09:59:49 AM »
Sorry.  I never thought of hotels,motels, and apartments on the beach to be different.  It's a studio

arebelspy

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Re: I'm looking to get into renting out property
« Reply #3 on: August 29, 2014, 10:46:31 AM »
Sounds like you might be mixing up some terminology.  Go talk to the people selling these and listen to their pitch with some skepticism, and ask lots of questions.

I am currently homeless, I spend next to nothing on food, and I haven't spent money on clothes in over 4 years.  I am currently making about 60k a year, and expecting to be getting a raise in the next week-next couple of months to be making about 3500 a week.  I currently have 15k in my bank account.

If you're making that much, and spending so little, why do you have so little in the bank?  That raises some red flags to me, and it sounds like you might need to spend some time getting on your feet and saving up.
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with two kids.
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shotgunwilly

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Re: I'm looking to get into renting out property
« Reply #4 on: August 29, 2014, 03:17:43 PM »
I was curious if you could help me out.  I am currently homeless, I spend next to nothing on food, and I haven't spent money on clothes in over 4 years.  I am currently making about 60k a year, and expecting to be getting a raise in the next week-next couple of months to be making about 3500 a week.  I currently have 15k in my bank account.

My thought is that I'd like to buy a few vacation rental properties in an area that's slow to recover.  I've been looking at rooms going for 50-60k a year with about a 300 dollars a month HOA.  Similar rooms are listed for a little over 100k in the hotel, and the rent comes out to be about 200 a night.

Does this mean if the hotel stays full, I'll be making 1400 a week, or does the hotel keep some of the money made off selling the rooms?  I'm just trying to figure out about how long it would take for each room to pay for itself.

So, your raise is tripling your salary???!

4alpacas

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Re: I'm looking to get into renting out property
« Reply #5 on: August 29, 2014, 03:53:42 PM »
Why are you homeless?  I'm so confused.

arebelspy

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Re: I'm looking to get into renting out property
« Reply #6 on: August 29, 2014, 04:36:05 PM »
Why are you homeless?  I'm so confused.

I assumed it was by choice, which is fine, I'm okay with that choice, but to only have 15k banked with that salary on that low of (voluntarily? homeless) spending means there's other big issues that need to be addressed, IMO.
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with two kids.
If you want to know more about me, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

Sdsailing

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Re: I'm looking to get into renting out property
« Reply #7 on: August 29, 2014, 04:51:28 PM »

Why would you choose vacation rentals over normal SFR?  Way too dependent on condo management.  How do the decide whose condos get filled versus which remain vacant? Huge potential for shady dealings.

I seriously doubt that renting vacation condos out by the week is any kind of get rich quick scheme that it may appear on the surface.   Look at vacation rental websites and check vacancy rates....they are huge.

escolegrove

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Re: I'm looking to get into renting out property
« Reply #8 on: August 30, 2014, 12:38:14 AM »
We got started by buying  a personal property. What about buying a single family and renting out the rooms to travelers. While I have not done this yet, at our next duty station this is my goal.

typie

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Re: I'm looking to get into renting out property
« Reply #9 on: September 08, 2014, 06:53:47 AM »
Sorry it's been so long.  I am homeless by choice.  I had only been working for 4 months.  I am over my student debt too.  I have recently gotten a big promotion, and I'm now making 1k a night, but working every night unfortunately.
 
I called the realtor up.  He said in 2009, the rooms profit was 20k.  Now it's 10k though, because of bad carpet and old furniture.  He claimed with new furniture and carpet it would be easy to pull 15k a year he thought.  This one is a short sale, going for about 40k. Apparently one person owned several rooms, and his other 3 rooms are going for about 60k.  I'm thinking about buying 2 rooms at the same place, the 40k one and one other. 

I'm not looking to get rich quick, I would just be happy with making 15k a year with each room.  Do you have any suggestions on questions to ask or things to look for?

waltworks

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Re: I'm looking to get into renting out property
« Reply #10 on: September 08, 2014, 07:49:44 AM »
Find a non-interested party who owns one of these places and find out what rent they are getting. Figure out how much rehab/furniture is going to cost you annually. Stop taking calls from the realtor.

Crap, if I were you I'd just index like mad and keep pulling your 1k/night. You should be set in a year or two, absolute max.

-W

typie

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Re: I'm looking to get into renting out property
« Reply #11 on: September 08, 2014, 06:43:22 PM »
I guess I like this place so much, because I used to go there when I was a kid.  I'm not sure what you mean by index like mad, unless you're talking about playing some sort of safe market fund.

Not sure how to find an owner of the room, but I figured maybe talk to multiple realtors in the area.

waltworks

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Re: I'm looking to get into renting out property
« Reply #12 on: September 08, 2014, 06:51:04 PM »
I give up.

-W

Sdsailing

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Re: I'm looking to get into renting out property
« Reply #13 on: September 08, 2014, 06:53:42 PM »
What kind of employment?  I have never heard someone cite oncome on a "per night" basis.

Regarding investments, I strongly urge a conventional portfolio involving stock and bond index funds.  It is particularly important to use conservative investments if you are both homeless and paid nightly.  Both of those come with sufficient risk.

arebelspy

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Re: I'm looking to get into renting out property
« Reply #14 on: September 08, 2014, 08:26:19 PM »
I give up.

-W

Some people have to learn for themselves.  Appreciate you making the effort, someone might read it and take some caution on something like this.
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with two kids.
If you want to know more about me, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

typie

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Re: I'm looking to get into renting out property
« Reply #15 on: September 09, 2014, 10:11:45 PM »
What kind of employment?  I have never heard someone cite oncome on a "per night" basis.



Regarding investments, I strongly urge a conventional portfolio involving stock and bond index funds.  It is particularly important to use conservative investments if you are both homeless and paid nightly.  Both of those come with sufficient risk.

I work as a physical  chemist.  I figured that if the feds hiked rates up early, or on the debt ceiling talks next year, I could get away with several rooms for cheap.  I don't see why everyone is being rude.  I'm paid bi-monthly, but my pay is not by the hours worked, it's by the nights.  Most nights I work for about 10-30 mins total, but on a bad night, I'll work for about 15 hours. 

arebelspy

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Re: I'm looking to get into renting out property
« Reply #16 on: September 09, 2014, 10:30:10 PM »
What kind of employment?  I have never heard someone cite oncome on a "per night" basis.



Regarding investments, I strongly urge a conventional portfolio involving stock and bond index funds.  It is particularly important to use conservative investments if you are both homeless and paid nightly.  Both of those come with sufficient risk.

I work as a physical  chemist.  I figured that if the feds hiked rates up early, or on the debt ceiling talks next year, I could get away with several rooms for cheap.  I don't see why everyone is being rude.  I'm paid bi-monthly, but my pay is not by the hours worked, it's by the nights.  Most nights I work for about 10-30 mins total, but on a bad night, I'll work for about 15 hours.

I didn't see anyone being rude, just a few people trying to caution you.
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with two kids.
If you want to know more about me, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

Goldielocks

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Re: I'm looking to get into renting out property
« Reply #17 on: September 09, 2014, 10:48:24 PM »
Use caution, I have found that various vacation rentals end up with management fee on management fee.  Like an onion, until all your 10k or 15k per year is nearly gone.

Then you need to replace furniture or more than minimal patching or repair when an idiot tennant is in there.

This is assuming that others are managing and cleaning the place. 

Apartments or a vbro that you self manage ( or pay only one company that you can fire) have better chances of profit.  Could you buy a conventional studio for $100 k instead of two rooms, and rent weekly in high season and monthly in low season?

Because watch out that the 15k profit is not actually extrapolated from only 7.5k in 6 months ( and then 2k for the next six). 

This investment, even if sound, is more suited to 20% or less of your total portfolio, balanced with traditional properties or stock investments.  Its unusual, which can mean more unknowns and risk.

Also be wary, due yo your unusual personal situation, others may be thinking you are a sucker or new to this, and ready for them to fleece. So do your homework and prove them wrong.

Sdsailing

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Re: I'm looking to get into renting out property
« Reply #18 on: September 09, 2014, 11:32:31 PM »

There is not enough information for anyone to provide meaningful advice, other than to stay away from what sounds like a risky investment.

If the OP would like real advice on real estate investing, then considerably more detail would be required.

As a physical chemist, I am sure that you have the analytical and quantitative skills.

marty998

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Re: I'm looking to get into renting out property
« Reply #19 on: September 10, 2014, 12:33:54 AM »
What kind of employment?  I have never heard someone cite oncome on a "per night" basis.

Regarding investments, I strongly urge a conventional portfolio involving stock and bond index funds.  It is particularly important to use conservative investments if you are both homeless and paid nightly.  Both of those come with sufficient risk.

I work as a physical  chemist.  I figured that if the feds hiked rates up early, or on the debt ceiling talks next year, I could get away with several rooms for cheap.  I don't see why everyone is being rude.  I'm paid bi-monthly, but my pay is not by the hours worked, it's by the nights.  Most nights I work for about 10-30 mins total, but on a bad night, I'll work for about 15 hours.

Do you cook meth? I mean come on...homeless, spendy, irregular nighttime hours, a "job" that is going to pay twice an ordinary wage, and you're looking for serviced apartments....
« Last Edit: September 10, 2014, 12:35:52 AM by marty998 »

bearkat

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Re: I'm looking to get into renting out property
« Reply #20 on: September 10, 2014, 08:37:23 PM »
Quote
Do you cook meth? I mean come on...homeless, spendy, irregular nighttime hours, a "job" that is going to pay twice an ordinary wage, and you're looking for serviced apartments....

Heinsenberg is ALIVE and lurking in the MMM forums.

If that's the case then I suggest not owning a car wash or putting all of your money in trash cans buried in the dessert ... Two vacation rentals is probably a grand idea.

Self-employed-swami

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Re: I'm looking to get into renting out property
« Reply #21 on: September 10, 2014, 08:45:07 PM »
I make a day rate in my, totally legit, career, as opposed to an hourly wage, no matter how much work I actually do that day, so that's not necessarily a red flag.  FTR it is also about $1000/day.

Sdsailing

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Re: I'm looking to get into renting out property
« Reply #22 on: September 10, 2014, 11:47:02 PM »
I make a day rate in my, totally legit, career, as opposed to an hourly wage, no matter how much work I actually do that day, so that's not necessarily a red flag.  FTR it is also about $1000/day.

Yes OK but not as a scientist.

typie

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Re: I'm looking to get into renting out property
« Reply #23 on: September 12, 2014, 09:41:55 PM »
What kind of employment?  I have never heard someone cite oncome on a "per night" basis.

Regarding investments, I strongly urge a conventional portfolio involving stock and bond index funds.  It is particularly important to use conservative investments if you are both homeless and paid nightly.  Both of those come with sufficient risk.

I work as a physical  chemist.  I figured that if the feds hiked rates up early, or on the debt ceiling talks next year, I could get away with several rooms for cheap.  I don't see why everyone is being rude.  I'm paid bi-monthly, but my pay is not by the hours worked, it's by the nights.  Most nights I work for about 10-30 mins total, but on a bad night, I'll work for about 15 hours.

Do you cook meth? I mean come on...homeless, spendy, irregular nighttime hours, a "job" that is going to pay twice an ordinary wage, and you're looking for serviced apartments....

Not a dealer.  I have been forced into those situations, and that's a reason why I feel more comfortable being homeless.  The craziest story I have drug related would be about 3 guys on a college basketball team looking for a tutor.  I said I love chemistry and it's a passion of mine.  I started talking to them about guided rockets, drug design, and crazy ideas involving biophysics.  Most people call this stuff pseudoscience.   Anyways, they asked me if I could make meth, and I said meth is a joke, anyone can make it.  So they looked at me oddly like, "we can't make it."  I said, I could synthesize cocaine.  Next tutoring session 2 guys came into the room that had backpacks like all of us, and the backpacks had 10k in them each.  They ended up buying 20k worth of Marijuana from the 3 basketball players.

After those guys left, those 3 said it was just a small weekly deal, and asked for me to drive anywhere I wanted to go for dinner.  One of the guys gave me keys to a nice 100k car and told me to drive his car.  I ended up just driving to subway, because I didn't want to seem like I was wanting to become part of the drug deal.  I was just a tutor, trying to get some extra cash before grad school. 

After dinner, I went back to tutoring them more at their apartment.   When it hit 1AM, they offered to take me to the movies, so they decided to take me to see "the town."  There was a part on the movie which hinted killing some one's family, and leaving them behind.  The rest of the night, they kept talking about how if I didn't synthesize coke for them, then they would be putting wreaths on my parent's mailbox for my loss. 


LukeS

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Re: I'm looking to get into renting out property
« Reply #24 on: September 22, 2014, 06:13:57 PM »
Hell of a story

What ever happened to them lol

typie

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Re: I'm looking to get into renting out property
« Reply #25 on: November 25, 2014, 06:40:06 PM »
I'm assuming that they're still dealing tbh.  They pay with cash to purchase cars, and then resell the cars to run a used luxury car business.  What I'm hoping is that with the legalization in various states, drugs become unprofitable, and they end up at captain D's.

Self-employed-swami

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Re: I'm looking to get into renting out property
« Reply #26 on: November 30, 2014, 08:57:44 AM »
I make a day rate in my, totally legit, career, as opposed to an hourly wage, no matter how much work I actually do that day, so that's not necessarily a red flag.  FTR it is also about $1000/day.

Yes OK but not as a scientist.

Actually yes, I am a scientist. Geologist to be exact.

Fallenour

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Re: I'm looking to get into renting out property
« Reply #27 on: December 11, 2014, 05:34:32 PM »
I actually registered just so I could respond to this typie.

I'm just recently getting into the landlord business myself, but I am entering the game very well informed ahead of time due to research on my own part.

what I suggest is you definitely need to go to a local land lord association and receive some help there.

My second thing is I would highly suggest you get yourself fully financially stable before you make any major investments like rental properties.

The next thing I suggest is walk away from this, its not safe, nor is it stable. Yyou dont own the building itself, just the room, so you have no real equity on this property since its just a partial portion of the building itself, instead of a studio.

What that translates to is you cant really "borrow" against it in case you wanted to use the property in the future as part of an equity based loan.

Additionally, if the previous owner has 8 of them, and he is shortselling 5 of them, they didnt do well. Theres a reason why they are dumping them all, and its most likely because he either slumlorded them into a destitute condition, which in that case they arent worth it due to the cost as compared to repairs youll need to spend, or they didnt rent enough, and he is taking losses so he can get out from under them.

Either way, walk away. It will be more of a drain than a benefit.


Also, as of right now, you dont really have the liquid cash you need in order to invest in real estate. A rule of thumb for RP (rental properties) is you will want 20-25% down, plus at least 6 months rent for the first property, and for me, I plan on doing an additional 3 for each additional property in liquid cash as an emergency fund. This is to protect you during periods of time when the unit(s) arent rented, or if something happens and major repairs are needed.

Additionally, there are a lot of laws in regards to landlord/tenant regulation, and you need to be up and polished on them before you start renting, because once the lease is signed, theres no turning back.

You need to have a pregamed rental policy, you need a pregamed eviction policy and process, a pregamed and negotiated repairs and mantainence policy, process, procedure, and prenegotiated contracts on rates per hour, and repair costs for Time and Materials (T&M).

Theres a lot more to being a landlord than simply collecting rent at the end of the month.

Respectfully,

Fallenour