Author Topic: When did you have buyer's remorse about a rental property?  (Read 2479 times)

clumlee

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When did you have buyer's remorse about a rental property?
« on: March 30, 2017, 01:04:49 PM »
I bought a turnkey rental property in Detroit, MI with the help of some leverage. I've had it for just under a month now and the property manager still hasn't gotten a tenant in there. I'm not terribly worried because I think long-term this would be a good additional income source. For anyone who's rented a place from another State, at what point did you get nervous and start questioning the wisdom of your choice?

Thanks!

clumlee

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Re: When did you have buyer's remorse about a rental property?
« Reply #1 on: March 30, 2017, 01:09:35 PM »
Sorry folks for the duplicate entries! The site wasn't loading or doing anything so I would hit refresh and post again.

Capt j-rod

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Re: When did you have buyer's remorse about a rental property?
« Reply #2 on: March 30, 2017, 07:33:29 PM »
I kept my first house and made it into a rental in 2011. The prices had tanked and we had to move for work. I could rent it for much more than the payment, so I rented it. I am still in the process of selling it. It's been vacant for 12 mos, and I have put $12k in materials after it got destroyed by a tenant during the 3 month eviction war. I paid $108k added $12K in repairs, sold it for $89K (pending) and netted $76K... Needless to say it hasn't been good. Lessons have been learned, but it still burns. I have 4 other properties other than my own home. The local homes are doing very well. Trying to manage a property 1.5 hrs away was bad. At least I can file it as a loss, (I hope) but it still sucks.

tralfamadorian

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Re: When did you have buyer's remorse about a rental property?
« Reply #3 on: March 30, 2017, 08:00:32 PM »
... just under a month now and the property manager still hasn't gotten a tenant in there...

Questions I would want to have answers for before I started to get nervous:
Has your property manager been communicating with you?  What is the feedback from the people who have walked through?  Did you check references for your property manager before you chose them?  Did your property manager lay out expectations on how long your property would most likely be available before it rented at the price you were offering it at?  What's the vacancy rate like for similar properties in your location?

powskier

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Re: When did you have buyer's remorse about a rental property?
« Reply #4 on: March 31, 2017, 11:57:32 PM »
7 years later having maybe not buyers remorse but wondering when to sell..... the numbers are good but honestly dealing with people with addiction, mental health issues, zero financial knowledge, etc,etc, is getting tedious....too cheap to farm out the management to someone else...but almost wish we'd got a place where the cash flow wasn't as good but better neighborhood......

pudding

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Re: When did you have buyer's remorse about a rental property?
« Reply #5 on: April 01, 2017, 12:20:31 AM »
Me and a friend bought 2 apartments to rent out a few years back. The town was an hour and half from where we live so we got a property manager.

It was around Christmas and new years so they sat empty for about 5 weeks and we too were getting buyers remorse. But then they got a tenant for us and they were fully rented for the next year that we had them.

Then we decided to sell and same agent sold for us and we pocketed about 30 thousand each. Not a huge amount but we only paid 80 grand each bought with a zero down deal.

joonifloofeefloo

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Re: When did you have buyer's remorse about a rental property?
« Reply #6 on: April 01, 2017, 01:46:28 AM »
I think you're right that there's no reason to worry at this point. It's smart to have a place wait for a preferred tenant. kellyincville's questions are great.

My angst came in stages, starting about a year in. Income was always fine, and some tenants were phenomenal... but the ones that weren't made for a very scary situation. There were bad situations while I lived in the building, when I moved a few blocks away, and when I moved far away. Some of the situations were a bit extreme, despite all the reference checks, etc. When the neighbours called after my distance-move, I went for a quick sale. I came out unscathed, and far ahead, but I'd be very reluctant to do it again. It seemed like just a matter of time before something like Capt j-rod's situation developed.

I think what worked well in navigating the ugh were things like:
*nipping issues in the bud (me on-site to address in the moment)
*early incentives for bad tenants to leave
*awesome neighbours who called me with concerns (I hand-delivered to each one a personal invitation to do so)
*calling police (1x)

clumlee: Yeah, there's an issue with the forum right now, resulting in duplicate posts. Mods are trying to resolve it :)

aj485

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Re: When did you have buyer's remorse about a rental property?
« Reply #7 on: April 01, 2017, 01:16:07 PM »
I kept my first house and made it into a rental in 2011. The prices had tanked and we had to move for work. I could rent it for much more than the payment, so I rented it. I am still in the process of selling it. It's been vacant for 12 mos, and I have put $12k in materials after it got destroyed by a tenant during the 3 month eviction war. I paid $108k added $12K in repairs, sold it for $89K (pending) and netted $76K... Needless to say it hasn't been good. Lessons have been learned, but it still burns. I have 4 other properties other than my own home. The local homes are doing very well. Trying to manage a property 1.5 hrs away was bad. At least I can file it as a loss, (I hope) but it still sucks.

How much was it worth when you placed it into service as a rental?  That's the basis that you start from when calculating a potential loss.  If values had tanked, and have gone up since then, you may actually have a gain, especially when you consider depreciation recapture.

clumlee

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Re: When did you have buyer's remorse about a rental property?
« Reply #8 on: April 04, 2017, 06:08:08 PM »
Thanks for the responses, folks! It's always good to read about the experiences and get insight from others.

NoNonsenseLandlord

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Re: When did you have buyer's remorse about a rental property?
« Reply #9 on: April 13, 2017, 08:56:38 PM »
You can always increase demand by lowering price.  Do  not let it go vacant, but good renters are looking 6-8 weeks out.

Coach Carson

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Re: When did you have buyer's remorse about a rental property?
« Reply #10 on: April 13, 2017, 10:18:52 PM »
Agree with Nononsense landlord about dropping rent. If it is a decent house in decent neighborhood, you can always drop to find the current market and raise again later. Months of missed rent while vacant is much more expensive the dropping some.

But before dropping, find out if it has actually been marketed and shown.  How many times? What kind of feedback? And also find out if  the house is clean and showable. This Is all harder long distance, but you should demand answers from manager on those things.