Is anyone on here a landlord?

[FastFarmer]

Not a landlord myself, but do work for a land developer that has 100s of units they own and rent out through a property manager so I have heard or seen some things about how it works. Absolutely know the landlord/tenant agreement inside and out and get every little thing in writing, no matter how trivial it may seem at the time.

it will 100% depend on the tenant if its worthwhile, especially with one unit as was said because you're either collecting the rent or paying the mortgage yourself and fixing whatever was wrecked by the previous tenant, no in between. Depending on the person(s), you could be running back and forth to the house from your acreage every week for some "complaint" (we build new and rent out and some people call because their cabinet doors are crooked and need to be adjusted... and they'll annoy you until its fixed), or they'll stop paying rent and/or up and leave with the entire place trashed and your one month rent damage deposit won't cover s**t.
I agree with more units = better, buying two sides of a duplex or a house with a main floor and legal basement suite would be better than one 4 bedroom house IMO, (I have also seen whole new 4-plexes for sale here, if I had the cash I personally would lean towards something like that).
Also, if the real estate is cheap, I would think that leans towards the rent market being soft also so just make sure you know the market before you're tied down with two mortgages.

Just my thoughts, I dont want to be your financial planner by any means lol

The “rent” market isn’t soft. When the rules change and you need to qualify for a 20% valuation to buy a house in a depressed economy, while life is still happening there becomes amazing opportunities to get you the keys. Leasing a home will afford people to act as an owner, feel like they have a partner and form a robust financial plan for them and or their families in any economy, let’s say the current one and accomplish this with little effort. Additionally the rental market for quality people in Alberta is very healthy, again takes some elbow grease and maybe some money but it does pay to make that investment. I believe in surrounding yourself with people far smarter than you the individual, because when you know you are valuable to the team the threat doesn’t exist and great things are accomplished.

 

[teeroy]

lots of excellent info posted.

the only advice I have to add...don't rent to any friends or family lol

 

[arff]

We have 2 rental properties. A condo and a duplex
Have had them for about 4 years now no issues.

My e mail is arff66@gmail.com
Any questions or information you need e mail me

 

[Zrock]

All very good info posted.. Make sure you do your checks and you should be fine.. Stay away from social assistance/welfare as on our property we have been screwed 2x. Both times check was to come strait to us and never did one check for the tenant came after they moved out and i went and returned it back to welfare and told them that the tenant owes us rent and these checks were to be made to us. Their exact words to me was " thats not our problem take it up with the tenant"

 

[maxwell]

All very good info posted.. Make sure you do your checks and you should be fine.. Stay away from social assistance/welfare as on our property we have been screwed 2x. Both times check was to come strait to us and never did one check for the tenant came after they moved out and i went and returned it back to welfare and told them that the tenant owes us rent and these checks were to be made to us. Their exact words to me was " thats not our problem take it up with the tenant"

yup isnt that a load of crap! they are able to "opt" out of the program at any time that automatically pays their bills.

 

[Frosty19]

The “rent” market isn’t soft. When the rules change and you need to qualify for a 20% valuation to buy a house in a depressed economy, while life is still happening there becomes amazing opportunities to get you the keys. Leasing a home will afford people to act as an owner, feel like they have a partner and form a robust financial plan for them and or their families in any economy, let’s say the current one and accomplish this with little effort. Additionally the rental market for quality people in Alberta is very healthy, again takes some elbow grease and maybe some money but it does pay to make that investment. I believe in surrounding yourself with people far smarter than you the individual, because when you know you are valuable to the team the threat doesn’t exist and great things are accomplished.

Not tied to Alberta in anyway so wasn't sure what the market is like so thanks for clarifying.
Here now that real estate has cooled down and and the stricter mortgage rules are in place it seems that there is more and more rental options popping up where people can't sell their houses or purpose built rental properties that weren't really considered a few years back are being constructed unlike when you could sell things and not have to wait for the return. The newer properties are getting rented quickly but the older properties have to drop rents and give incentives to rent out as they were used to the more lucrative market from 5 years ago and were also bought as income properties when houses were worth more and would probably be sold for losses now.
Working as a part of a team opens a whole new set of parameters and possibilities, agreed.

Kind of reminds me of the saying along the lines of "It's easy to make money when you already have money"

 

[hondalrd]

Thanks for all the information so far guys. I want to approach this in a smart way. And after looking at a lot of house prices and the current rent asking prices there is some money to be made. So some of my questions are.

What’s the best way to go with utilities? Easiest would be make the tenant pay them but then your “hoping they stay on top and actually pay” probably seem like a hassle for them to set up everything in there name.

Would a standard single family house be better then a half of a duplex for resale value ? I might want to try and sell it once the market comes back up eventually I know that’s not a guarantee but the oil field has taken many low points and came back.

What would be a good minimum lease length?

 

[maxwell]

as for utilities 100% need to be in their name. you cant be responsible for their usage as it could fluctuate significantly. If they dont stay on top of the bills it does not effect your credit in any way shape or form. the only piss off is that the utility companies will not tell you ANYTHING about their utility invoices even though you own the property. In other words you have no way to tell if the bills are being paid until the services are disconnected. a Previous tenant of ours ran up thousands in utility bills, made new accounts under fake names etc ( utility companies dont check ANYTHING ) and eventually the property was red flagged and services disconnected right before winter ( awesome ). All you have to do is call and get them switched back into your name to have the utilities turned back on and you do not have to pay any of the outstanding fees on the property. However now your in a sticky situation with your renter

 

[Bnorth]

Make tenant pay utilities so you don't get stuck paying them when they keep the house at 25C, take 45min showers and wash all their laundry in hot water. I found it's more common to have tenants pay utilities in AB whereas in BC when I was asking for rent + portion of utilities it scared off lots of people since they wanted to know exactly what their monthly costs would be, friggin broke asses. I added $50 to what I wanted for rent to cover their portion of utilities but that's in a suite without separate utility billing.

You'll grow more equity in a single family home than with a duplex apartment or condo. For best return look for something not necessarily where you want to live but something central to businesses and shopping. Location location location.

 

[hondalrd]

Sooo I have found a few mobile homes that are between $25000-$40000. I would be able to pay cash for something Iike this vs having to pay another mortgage if I bought a house for the rental. But they are older trailers from 1977-1985. But are renovated and look nice on the inside and outside. So I did some math and would be able to rent them for around $1200 a month with utilities included. I don’t think the renter could abuse the power and gas only in a smaller trailer. So deductions would be lot rent -$400. Which includes water/sewer/garbage utilities-$-150. home insurance -600 a year. Which would leave me $600 a month return. So I’m I foolish for thinking about buying such a old mobile? What is everyone’s thoughts?

 

[skegpro]

Sooo I have found a few mobile homes that are between $25000-$40000. I would be able to pay cash for something Iike this vs having to pay another mortgage if I bought a house for the rental. But they are older trailers from 1977-1985. But are renovated and look nice on the inside and outside. So I did some math and would be able to rent them for around $1200 a month with utilities included. I don’t think the renter could abuse the power and gas only in a smaller trailer. So deductions would be lot rent -$400. Which includes water/sewer/garbage utilities-$-150. home insurance -600 a year. Which would leave me $600 a month return. So I’m I foolish for thinking about buying such a old mobile? What is everyone’s thoughts?

Trailer...... Methheads.
Fun........

 

[hondalrd]

Trailer...... Methheads.
Fun........

My first place I bought was a trailer and I actually sold it for $20000 more then I paid and only owned it for 5 years. and I am far from a meth head. Not everyone in a trailer park is a drug addicted...

 

[lilduke]

Sounds good, that is a 18% return on a 40,000$ investment. Doubt it will work out like that, but lets say it does; is 600$ a month worth it to you?
You could probably just pick up some over time and make that easy. And at the end of the day you own a trailer on a rented lot. Id rather have the 40g personally.


I'd just keep stacking cash until you can invest into something better, just my thoughts.


PS I know good people that live in trailers and I know a crack head with a 8 million dollar house. So Im not judging here, just putting in my 2 cents.

 

[ATV Rancher]

Thanks for all the information so far guys. I want to approach this in a smart way. And after looking at a lot of house prices and the current rent asking prices there is some money to be made. So some of my questions are.

What’s the best way to go with utilities? Easiest would be make the tenant pay them but then your “hoping they stay on top and actually pay” probably seem like a hassle for them to set up everything in there name.

Would a standard single family house be better then a half of a duplex for resale value ? I might want to try and sell it once the market comes back up eventually I know that’s not a guarantee but the oil field has taken many low points and came back.

What would be a good minimum lease length?

We have a few single family rentals in the country that my wife takes care of. There are some good points on here, but to reiterate some that need to be driven home.

First off, put the utilities in the renters name and make them pay for them, or it's guaranteed that you will get screwed over at some point.

Good renters are valuable, and it's much better to have an empty unit then rent to idiots. That said, even good renters will often take advantage of you if you let them.

Sometimes you have to be an a-hole. It's human nature to want to help someone out who's going through hard times, but recently doing so cost us over a grand, and the fighting couple moved out and on with their life and we're stuck.

Another family is currently into us for ~$2500 in back rent. It's cold out and we can't evict.

You're young and you're going to learn a lot about the human condition and soon if you get into rentals.

You're going to run into psychopaths. We rented a nice little house to a cop with, it turned out, mental problems, and it turned into a nightmare. It was like a weight was lifted off our shoulders when he finally left.

You are going to end up fixing things, and cleaning up sh*t, that will make you want to puke. You're going to end up fixing windows, walls, and doors broken from domestic violence. A few years ago we had an idiot male schoolteacher pour cement and some gravel down the toilet and some drains on his way out. Young schoolteachers can be some of the biggest idiots, unaware of how anything works, that you will run across.

Try not to do a lease for less than a year. Anything shorter, and the cleanup that you are going to end up doing, or paying someone to do, isn't worth it.

My 2 cents. There is often a reason that people aren't homeowners. You'll come across some that are good. Many are varying degrees of not.

All of our units came with other ag related real estate puchases and have been free and clear for a long time. Would not go out and seek single family dwellings as an investment. Another 2 cents.

 

[skegpro]

My first place I bought was a trailer and I actually sold it for $20000 more then I paid and only owned it for 5 years. and I am far from a meth head. Not everyone in a trailer park is a drug addicted...

Living in one and renting one are two different things.

You gotta ask yourself who is gonna rent a $40k trailer vs buying it themselves.

Hint, the answer is methheads.

But let me know how it pans out for you.

 

[ATV Rancher]

I made a mistake. The family I said was into us for $2500......my wife corrected me, it's over $6000......and that sob has a good job in criminal justice.

And btw, hoarding is for real. You'll eventually clean up one of those messes.

 

[freeflorider]

If I was to be a landlord I would own a ****ty house. That way, when the tenants start to play games I would simply light that bitch on fire when they were at work. Haha squat on this pile of ash and you have no home now!

Give it a try, I’m betting there living in your house by the end of the week and your up on charges from Human Resources.
It’s not easy being on top. But I agree it would be satisfying for sure.

 

[skegpro]

I made a mistake. The family I said was into us for $2500......my wife corrected me, it's over $6000......and that sob has a good job in criminal justice.

And btw, hoarding is for real. You'll eventually clean up one of those messes.

I would kick them out in the cold.
Your too nice.

 

[FastFarmer]

I know some big players in the commercial real estate game in Alberta (through my dad, hes a smart guy) I just need the coin and I can get in on some good things.
Just didn't want to make the post all about me, some times I'm bad for that haha

There are excellent opportunities for every budget available if you want to get it done, Maxwell has real world advise which is refreshing to read as that comes from experience and maturity of being not only an investor but a landlord. I will never rent, lease or finance to friends or family, that’s a bad line to cross. We have been a good thing going because we don’t defer from the rules or the plan or make drastic amendments, we have been lucky to take undesirable tenants and rehabilitate into property owners but that’s never a goal...it’s a way to create a successful or amicable separation. Either way, the most valuble thing on earth....is earth, they don’t make any more of it.

 

[lilduke]

There are excellent opportunities for every budget available if you want to get it done, Maxwell has real world advise which is refreshing to read as that comes from experience and maturity of being not only an investor but a landlord. I will never rent, lease or finance to friends or family, that’s a bad line to cross. We have been a good thing going because we don’t defer from the rules or the plan or make drastic amendments, we have been lucky to take undesirable tenants and rehabilitate into property owners but that’s never a goal...it’s a way to create a successful or amicable separation. Either way, the most valuble thing on earth....is earth, they don’t make any more of it.

I have a long term plan and I have some smart business people around me to learn from.
But I am always interested in listening to other people's experiences in investing though, because there is more than one way to skin a cat!