Author Topic: First Tenant!  (Read 5824 times)

MoonPilgrim

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First Tenant!
« on: August 31, 2012, 07:54:36 AM »
Someone is willing to pay money to live in my old house.  Deposit paid, moving in on September 7th.  Mortgage targeted to be paid off by the end of the year, feeling really positive about my FI journey today!

WOOT-WOOT!


arebelspy

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Re: First Tenant!
« Reply #1 on: August 31, 2012, 08:18:55 AM »
That's awesome.  :D

That's one of my favorite parts about owning real estate ... other people pay for it for me!

If I could get stock, and have other people pay for it, and then at the end I'd own it, I'd be all over that.
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.

MoonPilgrim

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Re: First Tenant!
« Reply #2 on: August 31, 2012, 11:49:42 AM »
Thanks, Arebelspy.  It's addictive, I can't wait to start looking for the next house.

Another Reader

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Re: First Tenant!
« Reply #3 on: August 31, 2012, 12:16:07 PM »
And like so many other addictions, you will find yourself still doing it long after the thrill is gone......

I'm not sure what's worse, managing employees or managing tenants for a living.  At least tenants pay ME for the privilege!

arebelspy

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Re: First Tenant!
« Reply #4 on: August 31, 2012, 12:38:32 PM »
And like so many other addictions, you will find yourself still doing it long after the thrill is gone......

I'm not sure what's worse, managing employees or managing tenants for a living.  At least tenants pay ME for the privilege!

Heh, a very sage (and sobering) thought.

At some point I'll switch from managing tenants to managing a property manager.  Assuming I can find a good one.

Might be at least a little less management, but it'll be costly.
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.

Kriegsspiel

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Re: First Tenant!
« Reply #5 on: August 31, 2012, 12:57:02 PM »
Someone is willing to pay money to live in my old house.  Deposit paid, moving in on September 7th.  Mortgage targeted to be paid off by the end of the year, feeling really positive about my FI journey today!

WOOT-WOOT!

That's awesome dude, you're ahead of the game!  What kind of city is the rental in?

Another Reader

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Re: First Tenant!
« Reply #6 on: August 31, 2012, 12:59:44 PM »
Allow me to disabuse you of the notion that "good" and "property manager" can be used in the same sentence.  I have been through a few (and talked to many more) and I can tell you from over 15 years of experience you will find yourself managing the managers.  No one looks after your property and your money like you do, and you will be constantly reminded of this when you use property managers. 

However, if you own a lot of properties and do not want a full time job managing them, you will eventually hire a property manager.  Unless you own hundreds of properties, you will hire a management company.  And that's where the problem lies.  Management companies put their interests first.  Sometimes that means spending your money unnecessarily and making decisions that favor the tenant's interest over yours.  You will tear your hair out, but your alternatives are limited.  If you think I'm wrong, ask the more astute members of your local investing community.  The stories will amuse and horrify you.

arebelspy

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Re: First Tenant!
« Reply #7 on: August 31, 2012, 02:46:26 PM »
Yes, one switches from managing tenants to managing their property manager. 

I don't subscribe to the idea though that there are no good property management companies out there.

You'll likely just have to fire a few before you find them.

YMMV.
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.

Another Reader

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Re: First Tenant!
« Reply #8 on: August 31, 2012, 02:49:26 PM »
Let me know when you find one!

Petruchio

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Re: First Tenant!
« Reply #9 on: September 03, 2012, 02:56:33 PM »
Awesome deal MoonPilgrim! I'm happy for you. You get 3 cool points.

arebelspy

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Re: First Tenant!
« Reply #10 on: September 03, 2012, 03:19:32 PM »
Awesome deal MoonPilgrim! I'm happy for you. You get 3 cool points.

That'll be useful in the next game of Strip Happy Days.
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.

iwannaretire

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Re: First Tenant!
« Reply #11 on: September 03, 2012, 03:59:58 PM »

If I could get stock, and have other people pay for it, and then at the end I'd own it, I'd be all over that.


I don't mean to hijack the thread, but this can be done through a put selling strategy.  The only difference is that you have people pay you until you have enough money to buy the stock, and then you buy it.  Here's an excellent website that explains the strategy:

http://www.fullyinformed.com/about-me-my-strategy/strategy-explained/

arebelspy

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Re: First Tenant!
« Reply #12 on: September 03, 2012, 05:40:15 PM »
Yeah, I personally don't think that is reliable.  If it works, more power to you.  Good luck.
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.

MoonPilgrim

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Re: First Tenant!
« Reply #13 on: September 04, 2012, 08:48:53 AM »
Thanks, everyone!  It is in the Detroit Metro Area, a college town, but far enough from campus that students aren't too interested in the place.  The property market tanked here a year or so after I got a great deal on the house, and then a few years after that I found my dream house and moved out.  After doing some work on the place, I'd be in the hole if I sold now, so I'm going to see how landlording goes and if house prices recover before I make the call to sell.  The rent is decent ($800) compared to the mortgage ($275).

FWIW, I am using a property manager right out of the gate; I know it is may be more mustachian to DIY, but in the long run, I'm better off spending my time working hard at my day job, and leaving the credit/application screening and showings to an expert.  I really couldn't have managed to get the place fixed up and rented as fast or as cost efficiently as the PM company did.  So far, I believe I'm coming out ahead on the deal, since I believe it would have taken me six months and an untold amount of stress to coordinate things myself!

keith

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Re: First Tenant!
« Reply #14 on: September 04, 2012, 08:42:14 PM »
Thanks, everyone!  It is in the Detroit Metro Area, a college town, but far enough from campus that students aren't too interested in the place.  The property market tanked here a year or so after I got a great deal on the house, and then a few years after that I found my dream house and moved out.  After doing some work on the place, I'd be in the hole if I sold now, so I'm going to see how landlording goes and if house prices recover before I make the call to sell.  The rent is decent ($800) compared to the mortgage ($275).

FWIW, I am using a property manager right out of the gate; I know it is may be more mustachian to DIY, but in the long run, I'm better off spending my time working hard at my day job, and leaving the credit/application screening and showings to an expert.  I really couldn't have managed to get the place fixed up and rented as fast or as cost efficiently as the PM company did.  So far, I believe I'm coming out ahead on the deal, since I believe it would have taken me six months and an untold amount of stress to coordinate things myself!

Nice! That rent price against the mortgage cost looks really awesome!

Hopefully the property manager doesn't eat up too much of your profit.

thor800

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Re: First Tenant!
« Reply #15 on: September 09, 2012, 05:19:06 PM »
Has anyone moved on from a first rental property to a second ?  I bought a condo in jersey city, nj 6 months ago and have been renting it out since then.  The land-lording has been a positive experience as my tenants are good and respectful.

Im wondering how long I should wait before looking to invest in a purely investment property with full-time renters. 

Off the top of my head it seems like having 20% downpayment is ideal, but not sure if this could be a combination of current home equity plus $ on the side.

Any ideas ?

arebelspy

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Re: First Tenant!
« Reply #16 on: September 09, 2012, 08:19:06 PM »
Has anyone moved on from a first rental property to a second ?  I bought a condo in jersey city, nj 6 months ago and have been renting it out since then.  The land-lording has been a positive experience as my tenants are good and respectful.

Im wondering how long I should wait before looking to invest in a purely investment property with full-time renters. 

Off the top of my head it seems like having 20% downpayment is ideal, but not sure if this could be a combination of current home equity plus $ on the side.

Any ideas ?


Generally for an investment property (I.e. non owner occupied) they will want 20-25% down.  Home equity could be used if you had a HELOC, but generally you'd need at least 80% LTV or better for that, so most likely you'd need cash.

I don't see there's any particular reason to wait a certain amount of time.  If you have the money, and find a good deal that will cash flow after all expenses and it's within your propensity to do so, it makes sense to me to go for it.
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.