Will This Property Rent Out?
Okay, so I found a couple of properties I wish to buy. Currently it seems as though the rental market is pretty tough, everyone is buying and going away from renting. And of course eventually those apartments will rent out again. They always do. My questions to you are these...
When you buy a property, if the property isn't already rented out (example a 3/2 house that was formally a owner occupied home) are you afraid that it will sit vacant? What do you make sure it will be rented out?
My gut feeling says
RENT IT OUT and THEY WILL COME.
but another small part of me says, geeez, what if it sits vacant for 3 months...??? especially during times like these where everyone is buying houses.
Your thoughts..
[addsig]
sell on a lease purchase....
non refundable down
monthly cash flow
spread at the end
slightly inflated sales price
max. monthly rent
works for me.....
no repairs...make tenant/buyer responsible
Its all supply and demand my friend. Lower your price and they will come. Start with advertising what you want to get then slowly drop down to what you need to get.
Dave
There is always someone for any type of rental unit at the right price. IMHO, it is better to rent it out at a lower rent than keep it vacant waiting for a higher rent. If you are in for a long haul, eventually the rents will come back up and you will do fine.
Have fun!
Just make sure that when you buy, you can get a breakeven or slightly pos cashflow at the lowest rent rate you can think of. Anything over that is gravy. BTW, if you are even close to market rent, in my experience you will have NO problem renting it. i have found that when I place an Owner will finance/ no banks ad, I get approx 20-30 calls. A lot of callers have nothing to put down, but make excellent renters. They seem to be better renters than the ones that respond to a plain rental ad. I guess they believe that in the future, if they win the lottery, you may sell them the house.
Good Luck,
Shawn(OH)
If you buy below market you will always have options my friend! You can either make possitive cash flow by rent or make quick money on a flip or you can do my favorite which is plo. On a plo you get money up front,money every month and money at the end when you sell. Also check the appreciation market to see what is best for your area. Homes will always sell.
I'm not sure what your area is like but I recently placed and add for a rental at market rates and received a call same day. I would not got too low b/c then you get into wear and tear issues. Too low and not only are you dealing with negative cashflow but also having to repair any damages then it is almost better vacant.
I'm curious about what Loanwizard says about a "buyer will finance" ad. If you advertise that, dont you have to fill out some paperwork when they rent laying out an agreement that you'll sell it to them? I dont understand what you mean, but I could sure use renters that take care of things better. I want to just rent my properties so I can keep them, but I've had some bad luck with finding good renters.
I like to make sure before I buy a house that I will be able to rent it slightly below market without putting the finances in a bind.
As far as finding good renters.
#1. Charge a little less than market to generate interest. Having stellar tenets is worth the money lost per month (I never have to knock on doors for my money)
#2. The rental needs to look, feel, and smell clean.
#3. Be a salesman. So you have the perfect tenets in front of you who aren't quite convinced? Throw in a washer and dryer for free. Then go down to the used appliances shop and buy a cheap set. How about this. At my current residence I have DSL, so I went and bought a wireless router and shared my DSL with the tenet next door for $15 bucks a month. It's the little things that matter.
Hope this helps
All I can say is that prior Poster Savvy Youngster is a genius. Now that is true property management.
He has crossed the magic line, inserted himself into the psyc of the Rentor. How clever. I wished I lived in an area where my fellow neighbors were into such good things as DSL. In this area of the world their idea of speeded up communications is to jump wire your telephone and run up a bill talking to their dear friends back in the Soviet Union. Or the neighbor on the other side that keeps these cute little rabbits and then butchered one for lunch. It was with great difficulty that I restrained my 14 year old daughter from borrowing a match to speed him on his downward path to hell.
I have always used the carrott of offer of future purchase to rentors. Sometimes I have formulized it in the form of an option to buy. This then involves them in small repairs around the property and the teary telephone calls are reduced. Clogged toilets are my particular nemis I have never been a great swimmer. I try to leave a few of the simpler tools on site. I demonstrate how to plunge a toilet, bend a clothes hanger into a primitive short snake (toilet Awl) But for electrical repairs I prefer to get the telephone request. I hate going over to the property and seeing my new tenant streached out on the lawn with red ears from an electrical jolt.
The question of pets is always a problem and is just answered in the following manner. If the pet is smart enough to be able to co-sign the lease, I am for them. A cat I always accept as my cat requires neighborly companionship especialy at night when the moon comes out. This has saved me a small fortune over the years as I do not have to give him the standard two dollars for the neighborhood cat house.
Do hope this is helpful, sometimes I get the feeling that things are a little different out here in LaLa land. Cheers Lucius
Interesting concept Lufos. So your carrot is to leave it as an option to buy. Do you make the offer respectable or do you make it a bit higher than normal? I may not want to always sell the property but I do want them to treat the property well. Again... your thoughts...[ Edited by ddemott on Date 09/28/2003 ]