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09-18-2013, 06:21 AM
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#21
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Full time employment: Posting here.
Join Date: Nov 2008
Location: Jacksonville
Posts: 638
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Quote:
Originally Posted by Burnsie
Would you be willing to pass on the fantastic property manager you have in Virginia Beach? Thanks.
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Sure........can I do it publicly on the board?
Mike
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09-18-2013, 06:32 AM
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#22
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Administrator
Join Date: Jan 2008
Location: Chicagoland
Posts: 40,726
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Quote:
Originally Posted by wrigley
Sure........can I do it publicly on the board?
Mike
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You can share the name, and you can also PM more detailed contact info and any links.
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09-19-2013, 06:20 AM
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#23
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Thinks s/he gets paid by the post
Join Date: Mar 2005
Posts: 2,603
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Geez all this talk about having a friend/family "watch" the place ... I am glad none of my friends/family own rental property near me. Talk about a PITA!
I currently own rental property in 3 states but the first one was a multi family were I lived in one floor (25 years ago). The learning curve is steep and long distance makes it even steeper.
__________________
FIRE'd since 2005
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09-19-2013, 08:13 AM
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#24
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Dryer sheet aficionado
Join Date: Apr 2013
Posts: 38
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We're a military family and in the process of moving (PCS'ing) to another state. Stories like this make me realize that property management is not for us, so we're trying our best to sell our house. Sadly, the market is sluggish in our area, so renting our house may be the only option. Either that, or separate the family for a couple of years.
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09-19-2013, 08:19 AM
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#25
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Full time employment: Posting here.
Join Date: Nov 2008
Location: Jacksonville
Posts: 638
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Quote:
Originally Posted by hsmom4
We're a military family and in the process of moving (PCS'ing) to another state. Stories like this make me realize that property management is not for us, so we're trying our best to sell our house. Sadly, the market is sluggish in our area, so renting our house may be the only option. Either that, or separate the family for a couple of years.
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That is the exact situation I was in in 1989 when my family and I PCS'd. I wasn't crazy about renting out my home but today I'm glad I did!
Mike
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09-19-2013, 08:29 AM
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#26
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Dryer sheet aficionado
Join Date: Apr 2013
Posts: 38
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Quote:
Originally Posted by wrigley
That is the exact situation I was in in 1989 when my family and I PCS'd. I wasn't crazy about renting out my home but today I'm glad I did!
Mike
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I would love to hear about your experience? Did you have any problems? Was it a good financial decision? We know renting it out would put us in a better financial situation (we're already looking at losing $20K when we list it), but we're not sure if it's worth the headache.
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09-19-2013, 09:47 AM
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#27
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Full time employment: Posting here.
Join Date: Nov 2008
Location: Jacksonville
Posts: 638
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Quote:
Originally Posted by hsmom4
I would love to hear about your experience? Did you have any problems? Was it a good financial decision? We know renting it out would put us in a better financial situation (we're already looking at losing $20K when we list it), but we're not sure if it's worth the headache.
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For the most part it has been a good experience. Basically, my house has been rental property for 24 years and someone else paid off my mortgage for me!
I did have a bad tenant some years back that caused a bunch of damage and then just took off. It took me nearly 2 years to track the guy down and finally drag him into court......the judge made him pay! In that 24 years I have only NOT had a tennant for a total of 4 months when various repairs/upgrades were taking place in between tenants.
Things are going to happen and problems are going to arise. This is where a good TRUSTED property manager has been a valuable asset to me.
Something to remember is that if you decide to rent it, PCS, and then purchase another home, you will lose any homestead exemption/possibly be required to obtain a "Landlord" insurance policy/and if you used your VA eligibility to finance the home you will lose that. Also, the VA could be quite picky about you renting a house that has a VA guaranteed loan against it. It's been many years since I had to deal with the VA so I'm not sure how they are now.
The house can be a tax advantage while rental property (for how much longer I have no idea ). Repairs and upkeep are tax deductible and you can depreciate the home as well.
There are many people on this forum that are more qualified than I am that can chime in with their advice as well. Bottom line......for me it has been a good experience. My biggest dilema right now is debating on whether or not I want to move back into the home and live there for 3 years then sell it and avoid paying capital gains taxes. If I decide not to move back into it and sell it, I'll pay a pretty penny in capital gains taxes.
I hope this helped and I hope others on here can give you some advice as well.
Good Luck!
Mike
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09-19-2013, 09:49 AM
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#28
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2007
Location: Independence
Posts: 7,299
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Quote:
Originally Posted by tryan
Geez all this talk about having a friend/family "watch" the place ... I am glad none of my friends/family own rental property near me. Talk about a PITA!
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What you said. Having on site family/friends do the work for free and then pretending you are making a profit kind of escapes me. We have a guy that manages for us in Oregon while we are away for 10% of the gross rents - trusted since he has been known since diapers & lived with us for a year or so. The gal has an inherited rental in SoCal that is managed by a real estate broker trained from the beginning by her Mom - also at 10%. In neither case is the operation of the rentals optimal - I view the management as a barely functional option till we can sell. Of course my thinking is colored by thinking I do a better job.
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09-19-2013, 10:35 AM
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#29
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Thinks s/he gets paid by the post
Join Date: Mar 2005
Posts: 2,603
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wow ... 10% is a steal.
The one I used (back when I had a day job) started at 12% then jumped to 15%. Plus 20% of maintenance she scheduled/"managed". Oh, don't forget about 1 months fee for filling a vacancy.
Yeah, my positive cashflow quickly dropped to break-even. The killer was paying plumbers rates for a toilet clog or lighting a pilot. Electricians were sent to change light bulbs. Hard to make money this way.
__________________
FIRE'd since 2005
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09-19-2013, 11:06 AM
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#30
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Full time employment: Posting here.
Join Date: May 2005
Location: Atlanta suburbs
Posts: 900
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We manage a rental for friends and DW gets 10% of rents. In addition I do all handyman jobs around there for a $35 per hour. I know we are a steal, but these are friends
We went into it not to make money, but to try our mantle at being a landlord (and have mixed feelings about it)
It was much easier when we lived in the same subdivision, it's harder now when we are 30 minutes away.
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09-19-2013, 11:19 AM
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#31
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Dryer sheet aficionado
Join Date: Apr 2013
Posts: 38
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Thanks so much for sharing that with me wrigley...there is definitely a lot to consider in the renting game. You've given me a lot more to think about and I'm glad you had such a positive experience.
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09-19-2013, 12:44 PM
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#32
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Dryer sheet aficionado
Join Date: Oct 2012
Posts: 25
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I have A LOT of properties (since 2005) in three different states across the country, none of them I have ever visited nor seen in real life. The property manager takes care of everything and keep the income checks coming to my mailbox. I'm very happy and wouldn't want to deal with it myself. I only buy homes in states with strong protection for landlords...don't pay rent a month or two and you're evicted! None of this balogney excuses like I have small kids or I'm disabled or I'm old or it's wintertime. I have friends in blue states where the judge repeatedly postponed eviction for 2 years (rentfree!!!) until the tenants have to be paid $7000 cash to get out.
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09-20-2013, 03:15 PM
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#33
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Thinks s/he gets paid by the post
Join Date: Mar 2005
Posts: 2,603
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Joe,
I am trying to understand ... you're buying sight unseen at auction then turning it directly over to a manger? If so, you have bigger kaunas than I do.
The last auction property I did was "unseen" in the sense of a walk thru ... I peeked thru the windows. And won an online bid.
Ironically the last eviction I did was in a "purple" state (NH) and cost me 3 months rent (~4k). The last "blue" state (MA) eviction resulted in payments which are current (to date).
__________________
FIRE'd since 2005
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09-20-2013, 05:18 PM
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#34
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Full time employment: Posting here.
Join Date: Jan 2006
Posts: 956
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Quote:
Originally Posted by younginvestor2013
Does anyone have experience investing in real estate outside your vicinity OR in your vicinity but not directly managing the property yourself (i.e., hiring a property mgmt company)?
I am very intrigued to purchase some real estate solely for investment purposes. I work in real estate finance and investments so I am fairly competent at analyzing a potential investment's feasibility (albeit I am still young in my career! :cool smiley: ).
The trouble is, I live in Chicago which is a fairly high cost of living town. Therefore, investing in most residential (or other types) of properties requires a significant capital commitment, unless I am willing to invest in smaller condos (which are generally not good investments).
However, I have looked at various markets around the country and seen many prices that fit in my price range much more (Las Vegas, Florida, Arizona). The trouble is that I am not on the ground and wouldn't be able to manage the property myself so I'd have to hire a property management company. I deal with these folks at my work daily, but this is on a different/higher level.
I'm wondering if anyone has first hand experience with this, and how the story went (positive/negative)?
Does anyone have comments or personal experience in real estate investments in general? My ideal price range would be 200-300K max, at which price a down payment would represent only about 13-20% of my overall portfolio. I don't mind tying up that cash given my horizon (I just turned 24).
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I would not recommend this. My experience was not positive.
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09-21-2013, 01:23 PM
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#35
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2004
Location: the City of Subdued Excitement
Posts: 5,588
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"Does anyone have experience investing in real estate outside your vicinity OR in your vicinity but not directly managing the property yourself (i.e., hiring a property mgmt company)?"
Yes.
Personal opinion, based on experience: You gotta be nuts! Buy Vanguard's REIT index fund instead.
A) Manage it yourself.
B) If you can't drive past it on the way to work/Starbux in the morning, you have a problem.
__________________
I have outlived most of the people I don't like and I am working on the rest.
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09-21-2013, 01:47 PM
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#36
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Thinks s/he gets paid by the post
Join Date: Aug 2012
Posts: 1,862
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Quote:
A) Manage it yourself.
B) If you can't drive past it on the way to work/Starbux in the morning, you have a problem.
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+1. I inherited property when my parents died, and I could walk to each of the houses, and I still find it to be a horrendous pain in the tush. We tried to find "good" property management and soon realized that term was an oxymoron. In our experience, there aren't any good companies.
Real estate is not a passive investment. It's not the structures that are the problems, it's the people living in them. Be prepared to hear hard luck sob stories like you've never dreamed of....
Being a landlord has made me highly suspicious of virtually anything these people tell me.
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09-21-2013, 04:36 PM
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#37
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Recycles dryer sheets
Join Date: Dec 2011
Location: philadelphia
Posts: 115
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Quote:
Originally Posted by SumDay
+1. I inherited property when my parents died, and I could walk to each of the houses, and I still find it to be a horrendous pain in the tush. We tried to find "good" property management and soon realized that term was an oxymoron. In our experience, there aren't any good companies.
Real estate is not a passive investment. It's not the structures that are the problems, it's the people living in them. Be prepared to hear hard luck sob stories like you've never dreamed of....
Being a landlord has made me highly suspicious of virtually anything these people tell me.
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+1 Yes, the problems are the people living in them, AND the laws that are in their favor and against the landlord.
As several posters in this thread have pointed out, if you want to be successful in real estate investing, you need to keep the property occupied as much as possible. I could understand your wanting to invest long distance if you lived in a one horse town in the middle of nowhere, but I can't think of a better place for you to invest than Chicago, where the economy is very diverse and not dependent on any one or two industries. As a poster above said, look at the gentrifying areas of Chicago. You won't want for tenants or capital appreciation. And hire a property manager; you'll sleep better at night. You should be able to work it out with your property manager that you can do certain types of maintenance to save money, and without anyone knowing who you are.
And by the way, don't look to invest in the low rent areas of your city because the up front cost is less. I can speak from experience that it is not the way to go.
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09-23-2013, 08:40 AM
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#38
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Dryer sheet wannabe
Join Date: Apr 2013
Posts: 16
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I began investing in out of state RE about 18 yrs ago.
I have bought and sold all of these properties unseen, based on profiles provided by local brokers and property manages showing cost to buy, cash flow with rent, ins, taxes etc.. rental demand, appreciation etc..
Currently I have 12 rentals in 9 states.
Generally it has been a good experience.
Most of these are now paid off and the rent makes up most of my income
Over the 18 years, I think I had to fire only 3 property managers
Owning rental property, especially out of state, is not for everyone
Like all investments it involves risk and everyone’s risk tolerance is different
I think the key to investing in out of state RE is networking.. Don’t try to do it alone.
I belong to an investment group that scouts good locations to invest in that meets certain criteria, screens and selects property manages (and often negotiates discounts), recommends good insurance companies and PPL that covers all states
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09-27-2013, 07:51 PM
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#39
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Recycles dryer sheets
Join Date: Mar 2013
Posts: 285
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Not quite a year ago, we bought a property on the opposite side of the country, which we are now renting out. In our case, the primary purpose is that the house will be our retirement home in a few years. We had already decided on our target area. Renting it out is really to pay the mortgage and expenses, not so much for investment or income. We felt the market was better for us than waiting until we actually retire.
Being so far away, I did hire a property manager. However, I found my own tenant. We spent a bit of time in the house after the sellers had moved out, and met with a couple of prospective tenants. One was already renting a different house in the neighborhood, and the other was a friend of the seller. Both had been referred to me by the seller. I was also able to meet the property manager in person while there.
This was a fortunate and probably relatively unusual sequence of events. We could hardly have asked for better, and we felt much more comfortable with the situation than we expected going into it.
__________________
How can you tell when a cat is retired?
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