> ITT property buying for renting ideas/thoughts/plans.
Hello /biz/ i am thinking of a idea. Nothing stellar or mind blowing, just buying apartments and renting them.
> Look for apartments/houses that are listed for selling by banks or the government for various reasons such as inability to pay loans or taxes or other reasons for authority to get your shit.
>Normally they are sold at a discount and a bargain.
>Take part in the bid and buy it using a fixed mortgage % loan from a bank.
>Obviously i should pick the property in good location and in a good condition.
> Find tenants using a agency. Depending on the kind of property picking right kind of tenants. (Not letting drunks or whatnot in a nice place, no problem if its a shithole)
> Rent is like 1% (or ideally what i can get away with) more than what i would pay to the bank and taxes.
>Repeat as bank would have no problem lending more money as long as i can pay up.
>15 years later have 10 or more apartments living as a land lord not needing to be wage cuck.
>If you wish go on and buy more and more stuff become filthy rich.
Well said. Also, from the numbers I looked at, rent is ballpark 60%-75% of monthly payments on a given property, on a 20 year mortgage. Admitting you could get the house with a loan,you would need at least 30% discount to make it work, and then your razor thin profit would be eaten up, and some more, by the cost of maintenance of your properties.
Well if things are so bleak and you would be 30% in. How do people do it in real life?
> I live in a rented apartment and my land lord has 10 apartments.
>My best friend land lord had 5 apartments.
Of course they could have inherited the property but how the hell you inherit 10 apartments.
And if my idea does not work is there a relatively self sustaining method to make it work?
I am a reasonably successful landlord. The key is in diversification. Too many people tunnel vision property thinking it's an easy profit. Property is a very tough game to be in. Before you make any plans, I live by these key 5 rules:
Property must be at least 20% BMV.
The property must have an exit strategy or development potential. Ie can it be sold easily? Converted to flats?
You must be able to pay your mortgage, keep back 10% for repairs and an extra 10% for voids and still be profitable by at least 10% for it to work.
You must keep a cash buffer for emergencies.
You must get the right insurance that WILL pay out.
Before you make your plan, consider flats, single lets, dss, HMO's etc. If you tunnel vision one type of property you leave yourself exposed to the market. It's like investing all your stock in one company, no-one does that...
In property you must be a defensive and considered investor. Agression just leads to bankruptcy in my experience.
Here is what you do..
>Get a one story rental with 3 or 4 bedrooms.
>Depending on your state make it into an elder care/Alzheimer's care house.
>Each person paying 3 to 4K each month.
>Hire someone for 24 hour care..
Only have to fit the home, doorways and entrance for wheelchair.
Mortgage is 1 to 2K
Also factor in helper wage.
Very profitable business and beats having regular renters in your house.