Author Topic: Time needed to run a rental  (Read 4361 times)

KBecks

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Time needed to run a rental
« on: January 06, 2014, 09:35:23 PM »
I am very interested in rental real estate… but…   I am concerned about the commitment to own RE and be a landlord.

We have 3 young kids, my husband has a FT job and does not want to mess with a rental.  I have a part time job and being a good parent is #1. 

As much as I would love to try it, I don't think it's the right time because my husband isn't interested and because we are very busy as a family, just taking care of basic family things and spending time together.

So, plan B is to invest in the stock market, options, and work on saving to pay down our own house mortgage. We have a stash, and we want it to grow!

Maybe when the kids are a little older, or if my husband can retire early, we can look more seriously at rentals. 

Does this make sense?  Karen

arebelspy

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Re: Time needed to run a rental
« Reply #1 on: January 06, 2014, 10:30:04 PM »
Land lording, for me, averages about 1 hour per month per property.

It lumps up though - most months you have 5 minutes of work (checking to make sure rent was deposited into the account... it was.  Maybe 5 minutes calling the occasional plumber or whatever.).  Then when someone moves out (say, once/year or so), you'll have 10 hours of work getting the property ready and showing it to new potential tenants.  Then back to very little time needed.

So it "averages" to one hour/month, but it's really more like a median of 5 minutes per month or less, and a rare spike of 10 hours in a weekend.  This is, of course, assuming you have a property in a decent area and screen properly so you get good tenants (no drama, evictions rare) and do a good job with upkeep of the property (so repairs are rare).

And, of course, you can outsource it to a property manager that you will have to manage, but now you're looking at much less time.  You can even outsource the repairs (via calling repairmen) or make it even MORE hands off and get a home warranty so the tenants call that number directly for repairs.

Of course this doesn't touch on the time needed to find good properties.  But people worrying about being a landlord and it taking a bunch of time is an overblown and, frankly, false fear, IMO.  If you have the constitution for it, it's not bad at all.
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KBecks

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Re: Time needed to run a rental
« Reply #2 on: January 07, 2014, 06:22:35 AM »
Yeah, when you are set up, I imagine you can get it to run well.  But, it's the initial property finding, learning curve and getting started that's a challenge.  And then also figuring out what is the right property, what is the right rent.  Is this really going to work, stuff.

I don't see ourselves getting any less busy over the coming years though. 

I think if we can get closer to FI then managing rentals will be a great, great retired gig.  I would love to do it sooner. 

arebelspy

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Re: Time needed to run a rental
« Reply #3 on: January 07, 2014, 07:29:37 AM »
I think if we can get closer to FI then managing rentals will be a great, great retired gig.

I'm planning on outsourcing all my management when I FIRE.  Definitely don't want to be stuck managing rentals when I could be traveling, etc.  If for some reason you were in a budget crunch (down economy and you have higher vacancies than normal, or the market is down and you don't want to sell any but buy more?), it's obviously a side-gig that you can easily step into that'll pay a few thousand dollars or more, depending on your rental(s), but I'm definitely not planning on keeping it as a job when I FIRE.  YMMV, obviously.  :)

Yeah, when you are set up, I imagine you can get it to run well.  But, it's the initial property finding, learning curve and getting started that's a challenge.  And then also figuring out what is the right property, what is the right rent.  Is this really going to work, stuff.

I don't see ourselves getting any less busy over the coming years though. 

/shrug

If that's what you've decided, sounds like your mind is set.  Best of luck.

Hope my answer helped someone else thinking about it and thinking they didn't have enough time (One tip: approach it as a hobby, in terms of time spent. Do it for enjoyment. Treat it like a business when you run it, but real estate can be a lot of fun).
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
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KingCoin

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Re: Time needed to run a rental
« Reply #4 on: January 07, 2014, 11:56:16 AM »
Yeah, when you are set up, I imagine you can get it to run well.  But, it's the initial property finding, learning curve and getting started that's a challenge.  And then also figuring out what is the right property, what is the right rent.  Is this really going to work, stuff.

While you'll give up some return, you can also go the "turn-key company" route. These companies will show you a menu of properties, you mail a check for the one you want, and they manage your property for you. This takes almost no time and research on your own part, but as always, it's important that you do some due diligence (make sure the turn-key company is reputable and in good standing with clients, make sure your property is in a decent neighborhood, have a home inspector vet the property before closing etc.)


[Mod Edit: Fixed quote tags.]
« Last Edit: January 07, 2014, 12:10:36 PM by arebelspy »

arebelspy

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Re: Time needed to run a rental
« Reply #5 on: January 07, 2014, 12:18:55 PM »
Yeah, when you are set up, I imagine you can get it to run well.  But, it's the initial property finding, learning curve and getting started that's a challenge.  And then also figuring out what is the right property, what is the right rent.  Is this really going to work, stuff.

While you'll give up some return, you can also go the "turn-key company" route. These companies will show you a menu of properties, you mail a check for the one you want, and they manage your property for you. This takes almost no time and research on your own part, but as always, it's important that you do some due diligence (make sure the turn-key company is reputable and in good standing with clients, make sure your property is in a decent neighborhood, have a home inspector vet the property before closing etc.)


[Mod Edit: Fixed quote tags.]

Agreed, and I love this idea in theory, but I spent many hours last year researching turnkey companies and couldn't personaly find one I was happy with, and came to the conclusion it was better to build your own solid team there (which does require some up front time) to get turnkey benefits with better profits.  Thus I have been pursuing this route personally, for my out of state investments.

If anyone has any good turnkey company experiences, I'd love to hear them!  :)
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
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Johnny Aloha

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Re: Time needed to run a rental
« Reply #6 on: January 07, 2014, 04:00:08 PM »
I've also looked hard into turnkeys but decided to set up deals and teams on my own.  Time will tell if it is easier and more profitable!

For my local investments, I've noticed it takes about 6-8 hours to place a tenant between showings, background checks, etc.  The ongoing managment is minimal (or none!).  However, I trim the hedges once every 4-6 months just to give me an excuse to lay eyes on the property.  I prefer to be hands on, but will probably dial this back once I have some more experience.

arebelspy

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Re: Time needed to run a rental
« Reply #7 on: January 07, 2014, 04:55:50 PM »
I've also looked hard into turnkeys but decided to set up deals and teams on my own.  Time will tell if it is easier and more profitable!

I'd bet so on the latter, the former probably depends on you. Turn keys do make it easy.

For my local investments, I've noticed it takes about 6-8 hours to place a tenant between showings, background checks, etc.  The ongoing managment is minimal (or none!).  However, I trim the hedges once every 4-6 months just to give me an excuse to lay eyes on the property.  I prefer to be hands on, but will probably dial this back once I have some more experience.

About the same time commitments I've noticed, maybe a bit less (due to, I'd guess, you being in a hotter rental market).

And when tenants renew their lease, your average time commitment for a property goes way down.  I love tenants that stay 4+ years! :)
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, 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.

Johnny Aloha

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Re: Time needed to run a rental
« Reply #8 on: January 07, 2014, 05:03:15 PM »
(due to, I'd guess, you being in a hotter rental market).

When I put an ad on CL, I get 20-30 emails in the first 24 hours.  Then I set up a 1-2 hour group showing where I'll have the best 4-6 emails see the property.  might have to show it 2-3 times, but I'll have 2-4 well qualified renters by the end of the process. 

I've heard the same about other markets like Dallas and Cleveland.  Is Vegas a little slower?

arebelspy

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Re: Time needed to run a rental
« Reply #9 on: January 07, 2014, 07:26:46 PM »
(due to, I'd guess, you being in a hotter rental market).

When I put an ad on CL, I get 20-30 emails in the first 24 hours.  Then I set up a 1-2 hour group showing where I'll have the best 4-6 emails see the property.  might have to show it 2-3 times, but I'll have 2-4 well qualified renters by the end of the process. 

I've heard the same about other markets like Dallas and Cleveland.  Is Vegas a little slower?

Indeed.  We have a glut of rentals from the many investors (including hedge funds) who came in 2012 & part of 2013.  I think our average days on market per MLS is just under a month, IIRC.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, 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.

KBecks

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Re: Time needed to run a rental
« Reply #10 on: January 07, 2014, 07:51:00 PM »
Sorry. I am feeling sad because with the family schedule right now, and my husband's lack of interest, purchasing a rental isn't going to fly for at least 6 months to maybe a year.  This is not the end of the world.  We can work on other things and hopefully the time will be right in the future to dig in and find a property.  Thanks.

Longwaytogo

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Re: Time needed to run a rental
« Reply #11 on: January 07, 2014, 08:55:52 PM »
(One tip: approach it as a hobby, in terms of time spent. Do it for enjoyment. Treat it like a business when you run it, but real estate can be a lot of fun).

One of the reasons I want to get in to Real Estate. I love looking at houses, designing improvements, doing the work etc. Looking at flipping right now but eventually would like to get into rentals by finding flip type prices/houses and then fixing them up to rent to improve my cash flow.

A few of my friends have rentals more by chance then active investing like most of you (renting their first/second houses after they moved up) and most all have time commitments like you guys say 5-10 minutes a month with occasional bouts of more work/time (they also get me to do most of the maintenance/repairs which saves them time/money as they trust me to meet the tenants and bill them fairly, etc.). Between my 3 friends they have 5 houses over last 6-7 years and only 1 of them has had one eviction. obviously pretty small sample but mostly they have had good luck.