i did some research on interest only mortgages and am wondering if this might be a smart choice for me....
if i understand this scenario correctly, i can benefit from low initial payments for a fixed time, during which i can pay my mortgage (for big house) early if i so choose (or not and save that available cash for my next investment) to own my home quicker....
say i get a 10 yr interest only mortgage, after the 10 years, i can re-evaluate my position and either refinance to a fixed rate mortgage or choose to sell...
right?....do i understand this correctly?
is an interest only mortgage the same as an ARM? thanks for all your input.... ;o)
Let me know how your situation works out. I am in pretty much the same position. I am closing on a 4-unit this month for which the long-time (but month to month) tenants are paying well below market and I am trying to find an ethical but effective way of raising the rents to market without creating an instant exodus.
You may want to stagger raising the rents, unless you feel they both will go with it the increase. Just would hate to see two tenants walk at the same time. Not only do you have a vacant apt, you now have to pay for cleaning and other misc repairs before you can rent it out again.
Just a thought.
As far as annual rent increase, I keep up with the market - but always try to raise atleast 5%. My insurance and taxes go up that much each year.
My partner and I work full time and own and manage 31 units. You have to realize that if you work fulltime you do NOT want to do all of your own repairs. Find reliable handymen, they will save you much grief.
[addsig]
Personally, we supply all appliances, washer & dryer, stove and refrig. in all of our rental units. We found that most of the damage people do moving in and out is with trying to move large appliances, either by tearing the floor covering or banging up walls and door facings. I can also get more rent by furnishing the appliances and they get depreciated just like any other piece of equipment. Just my two cents--EB
You can easily say that the appliances come with the unit but you do not maintain them, guarantee them, and if they break, it is their responsability to replace them if they want them.
[addsig]
I would give them the option to keep them for a additional charge a month. You could purchase a home warranty which usually covers washer, dryer, acand plumbing for $300 a year.
In my area, hookups are important. I only provide w/d if it came with the place when I bought it--lease provisions specify that they are there at my "convenience" and I do not warrant that they are functional. Any repairs are by factory authorized technician, paid for by tenant and I will remove them at their request. Otherwise, they can supply their own.
i did some research on interest only mortgages and am wondering if this might be a smart choice for me....
if i understand this scenario correctly, i can benefit from low initial payments for a fixed time, during which i can pay my mortgage (for big house) early if i so choose (or not and save that available cash for my next investment) to own my home quicker....
say i get a 10 yr interest only mortgage, after the 10 years, i can re-evaluate my position and either refinance to a fixed rate mortgage or choose to sell...
right?....do i understand this correctly?
is an interest only mortgage the same as an ARM? thanks for all your input.... ;o)
Cataman:
Let me know how your situation works out. I am in pretty much the same position. I am closing on a 4-unit this month for which the long-time (but month to month) tenants are paying well below market and I am trying to find an ethical but effective way of raising the rents to market without creating an instant exodus.
You may want to stagger raising the rents, unless you feel they both will go with it the increase. Just would hate to see two tenants walk at the same time. Not only do you have a vacant apt, you now have to pay for cleaning and other misc repairs before you can rent it out again.
Just a thought.
As far as annual rent increase, I keep up with the market - but always try to raise atleast 5%. My insurance and taxes go up that much each year.
My partner and I work full time and own and manage 31 units. You have to realize that if you work fulltime you do NOT want to do all of your own repairs. Find reliable handymen, they will save you much grief.
[addsig]
agree - another option is a PM. However you will have to pay him 5-10% of collected rents. To me it was worth it.
Personally, we supply all appliances, washer & dryer, stove and refrig. in all of our rental units. We found that most of the damage people do moving in and out is with trying to move large appliances, either by tearing the floor covering or banging up walls and door facings. I can also get more rent by furnishing the appliances and they get depreciated just like any other piece of equipment. Just my two cents--EB
You can easily say that the appliances come with the unit but you do not maintain them, guarantee them, and if they break, it is their responsability to replace them if they want them.
[addsig]
I think coin operated fire extinguishers is the way to boost your cashflow.
[addsig]
I would give them the option to keep them for a additional charge a month. You could purchase a home warranty which usually covers washer, dryer, acand plumbing for $300 a year.
In my area, hookups are important. I only provide w/d if it came with the place when I bought it--lease provisions specify that they are there at my "convenience" and I do not warrant that they are functional. Any repairs are by factory authorized technician, paid for by tenant and I will remove them at their request. Otherwise, they can supply their own.
My 2 cents
HA! Yeah, they have to deposit a quarter before they extinguish the fire that is gonna burn your house down.
Quote:
On 2005-03-08 17:08, ray_higdon wrote:
I think coin operated fire extinguishers is the way to boost your cashflow.