Buying a rental

I want to know if I'm wasting my time and money

>>1056827
Where do you live? That makes a huge difference.

For example, I'm in Australia, and buying a shitty little house would cost around $600,000, and give shitty returns.

Meanwhile in Texas, you can get a 3 bedroom house on a nice block of land for around $120,000, and charge about the same rent as teh 600k Australian house.

>>1056855
I live in Pennsylvania. I found 3 units for 130,000$ and duplexes as low as 80,000$

>>1056855
And that's ridiculous! 600,000 for a small house in Australia.

Check out biggerpockets.com, I've heard good things.

More important than that though, is read. Learn as much as you can.

The fact that you have that much money saved up at 21, and are planning to purchase a rental property, indicates that you're not an idiot and actually want to accomplish something. So I'm rooting for you. /biz/ and reddit (I believe there's an /r/realestate subreddit, otherwise go to /r/personalfinance) are good for a point in the right direction, if you can actually get help.

And seriously, just start googling "how to buy rental properties", "how to manage real estate", etc. Learn as much as you can. 98% of the information you could ever need as a small-scale landlord is available for free, online. The other 2% should be provided by a lawyer. Never, EVER pay for any kind of "real estate training course" or any such bullshit. These are complete scams.

The only time you should ever pay for information is when you're drafting a rental contract with a lawyer or being sued and hiring a lawyer. I have faith in you OP. I want you to succeed, so you need to be smart. Learn a lot.

>>1056827
Google "bigger pockets"

Ask them

>>1056889
Thank you. That's another reason I'm waiting a year because I could buy something cheap now and rent it out but I figured if I take this year to save as much as possible and learn exactly what I need to know instead of just jumping right in I'm better off. I've been watching YouTube videos but I know there is still a lot more for me to learn.

>>1056889
>The fact that you have that much money saved up at 21, and are planning to purchase a rental property, indicates that you're not an idiot
>Comes on 4chan
>Asks vague question about rental yield with no specifics
>Must not be an idiot

>>1056896
I'm comparing him to the average person, anon. At age 21 the average person is only concerned about the next time he's going to have sex, or the next time she's going to get drunk, or how the hell he's going to pay for food until their next paycheck because they blew their last one in one night at a bar.

Yeah yeah, "it's no measure of health to be well-adjust to a profoundly sick society," but comparatively speaking, OP is a financial genius.

>>1056896
Just trying to see if the path I'm trying to take is worth my time. No need for your input

>>1056902
>comparatively speaking, OP is a financial genius.
Shit, I mean, /biz/ as a whole is basically PhD-holding market wizards compared to the average person.

Anyway >>1056896, you're a faggot.

OP you already understand how it works buy rent income. Do you also hold a current job?

>>1056919
Yes I work night shift at a battery factory.

>>1056925
I stole 7 units 5 years ago from an owner trying to do what you are talking about. Im in TN btw. His mistake was trying to make a profit and live off his neighbors. I held a job and put all money collected back in units and then new units. My shit is clean and up to date draw 160 per week per unit and still hold my job and said units. Can tell you more if interested

>>1056940
Yea I'm planning on staying at my job while doing this. Are you paying mortgage on this building? Or is it payed off?

>>1056948
I pay a mortgage of 1200 per month.

>>1056902
He's asking for advice on a topic without ANY specifics what-so-ever and you're praising him. He might has well have asked "hey guys I met this girl, should I ask her out?"
>>1056904
You're only capable of saving $12,500 in a year - fuck your life is my input
>>1056913
Yeah suck my dick no-homo

>>1056958
How much do you rent the units out for? You ever have problems with tenants not paying? If so what do you do about it?

>>1056960
I'm only 21.. I bet you were saving that much when you were my age right?

>>1056965
700 per month. Yes all the time it is a cruel world anon and people don't always pay their dues. If you listen to nothing else I tell you don't be a neighbor to them it is a business not a friendship. IF you live with them you are gonna have hard time getting your money. If they don't pay they are gone

>>1056972
I wish like hell I had bought in at 21

>>1056972
Why are you so delusional that you're a special snowflake? At 21 I didn't have any savings because I paid off my parents mortgage in a lump sum since it made more financial sense than money in the bank earning fuck all

You're doing better than most but seriously, you ask for realestate investment advice without even going into the figures other than '130k for 3 units' - what's the ROI? Estimated monthly yield per unit? Vacancies in the area?

You're offensive simply because you accepted praise from these idiots without deserving it

>>1056985
Yea I figured the earlier the better. I'm not sure if you'll know the answer to this but do you think with about a $25,000 down payment I would be able to got a mortgage for say $130,000? I have decent credit. I want to keep the extra money for back up just in case. Because you know everything doesn't always go smoothly

>>1056827
What is this, the 1800s? You aren't buying shit with 30k.

Your best hope would be to buy a broken down house, fix it up, and sell it for a profit. Buying the house alone will still probably cost more than 30k and you may/may not have to hire some labor.

Don't feel too bad, because the fact that you're saving and thinking about your future puts you ahead of most people your age. But you still can't get what you want just yet.

>>1056998
It was actually a simple question. All I was looking for was, is it worth it? I was telling how much money I had and looking for opinions. That all I wanted to know so that's all I asked. People like you make me feel so much better about myself. You life must suck if you have to go on the Internet and sit there and just talk shit lol. You'd never see me wasting my time like that. But hey that's just me.

>>1057016
>is on /biz/
Yeah

>>1057004
Yes highly feasible. My favorite is to buy yourself a decent home worth the money Now. then use the equity of that home to purchase the rentals. Be smart about it and it will pay off nicely. When you are ready for upgrade you can then rent home you live in and use it and apts. equity to get nicer home. Rinse and repeat

>>1057005
It might just be the area I'm almost positive I can afford a mortgage on a duplex. 30,000 is a down payment on a 150,000$ house. I don't see the problem? thats a serious question too. Maybe I'm wrong I'm not sure

>>1057022
See the difference though is I'm asking a question. You're just sitting there putting negative feed back. I'm getting information while you're just a faggot.

>>1057026
Thank you I appreciate your time and help. That's all I really want to know unless you have any other tips.

>>1056960
Why are you here?

>>1056827
Work out the yearly cost of ownership (mortgage, property tax, maintenance, insurance, realtor fees if using one) and work out the income assuming 80% occupancy to allow for periods of vacancy.

As a landlord you assume a lot of responsibility - if your tenant changes a light bulb and falls off the chair, that's your fault. If their heating/cooling breaks, you need to repair it urgently or be sued. If they trash the place, you need to fix it.

It can definitely be worth it when the numbers make sense and your tenant is good. But you can also end up stuck with junky-ass units that no one wants to rent or buy off you. Then you're fucked.

>>1057066
Thank you to you helped a lot. I appreciate it.

>>1057077
Thanks. I plan on keeping an upkeep on the units. I know it isn't all just collecting a pay check. I actually have to put work into it. I plan being as professional as possible and treating it like a business

>>1056889
not op but can u give some suggestions of books to read?

This is what I plan to do also. A 3 br 2 bth in suburbs of Chicago where I'm at is around 100k some get really high up there but average is pretty low. But renting a house is like 1500 or I even seen 3000 a month on some bigger ones.
Fuck a 30 year mortgage and 3k a year property tax on a 100k is something super cheap like less than 800 a month.
Rent for 1500
>???
>profit?

>>1057102
I'm reading think and grow rich. Not exactly real estate but I've learned a lot.

>>1056827
I don't know how much of a business education you have, but you have to think in terms of return on investment (ROI).

Real estate is often the first thing that come to mind for investing, but probably no the best. You would have to run the numbers for your area, but where I live, gross ROI on real estate is ~6%, ~4% net ROI after all expenses, assuming no bad tenant/unpaid rent/maintenance issue. (pro-tip: there will be issues) so realistically you'll be looking at 3 to 3.5% ROI, lower if you account for the value of the time you spent on visits, meeting with contractors, insurance, maintenance.

You can easily find financial investment with virtually no risk that will yield 5% a year such as bonds or index funds (better than 5% return, but more volatile). And you don't need to wait until $30,000 to start investing, so you'll put your money to work sooner than with a house

If your going to buy, buy for you so you can invest what you'd spend on rent. Renting out flats is a lot of work for limited returns, in many areas of the world.
If:
price of house
---------------------------- < 1.7
rent collected in a year

Then you're better off putting your money in the financial markets.

>>1057825
not 1.7 , read <17. Sorry, typo.

>>1057830
>>1057825
Shouldn't that be > instead of <?
Like if the ratio was 1:1 then that would be fantastic, your tenant pays for the whole house in a year.

File: image.jpg (18KB, 324x156px) Image search: [Google]

18KB, 324x156px

>>1056827
If you have 17 grand put 3 grand in a forex account and let me trade it for you. I'll make you another 17 grand while your saving for a 30,000 then you'll have 47,000 ;)

>>1056827
some things to consider:

Having a rental is like creating a part time job for yourself. Unless you use a company to handle it(which can eat into your profits) you will need to keep the appliances running, fix the roof, ect. If you don't have the time to commit to it, finding renters, cleaning up after them, making sure they change the air filter on the A/C, then it's not for you. Get a regular house and have roommates.

Never expect 12 months of rent every year. Expect 10. Keep at least 5k in the bank to resolve emergencies. If land lording is what you want to do full time continue to reinvest your profit into more houses. The book "millionaire real estate investor" might be worth looking into

You're right, my bad.

>>1056873
damn. i found a fuckin 9-plex for 180k. wish i had the money to finance that!!

>>1056958
Where in TN are you? If knox, Id love to meet up IRL and talk about this. I have been really interested in being a landlord for a long time, would love to have someone I could talk to irl about this stuff

OP what part of PA are you from? I currently go to school in Philly and recently met this chick who does something similar. I wanted to offer to take her out to drinks and pick her brains a little but I don't know why she would give her secrets out to me when I could take her business.

>>1056827
Idk where in PA you live, but if you are close to buffalo i would take in to consideration buying rental properties there. 2-3 units go for anywhere from 30k-80k and just rent them out to section 8.

>>1056940
>I stole 7 units 5 years ago from an owner trying to do what you are talking about
wut?
how exactly do you steal an apartment?

>>1057077
>if your tenant changes a light bulb and falls off the chair, that's your fault

No, it's not.

>>1057217
you're not going to get a 100k 3 bed 2 bath anything in chicago suburbs unless it's spic or niggerville.