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Discussion Starter #1
Anyone have any experience here with buying homes or condos and renting them out? I'm not a homeowner as of yet (wayyyy to expensive in NYC for me to buy on my own) but I have an opportunity to buy my grandmothers condo in Maryland for a pretty attractive price and I would then rent it out.

My initial research leads me to believe that I could charge enough rent to cover almost the monthly mortgage payment and condo association fee. Further, I grew up in the area and feel that it is poised for further growth....I've read the MD/DC/VA area's economy is expected to grow 2.5% between 2008 and 2010 (vs. the rest of the Northeast declining, i.e. NYC metro area is expected -4.5%), so I feel there is reasonable growth to support property appreciation and individuals looking to rent.

Just want to see what peoples experiences have been with buying a place just to rent out. I live in NYC but my family is still in MD (I'm down there all the time) and I have a close friend who can be around for maintenance and, if need be, renter ass kicking purposes

Thoughts?

Thanks in advance.
 

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Shawn Davis
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I've never done this myself, but it seems like a no brainer if you can cover the mortgage payment and condo fee. I'd suggest hiring a local managment company to handle the day stuff instead of relying on a friend.
 

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Taxation is complicated
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I've never done this myself, but it seems like a no brainer if you can cover the mortgage payment and condo fee. I'd suggest hiring a local managment company to handle the day stuff instead of relying on a friend.
Yep. If you feel like up to the task, though, managing the premise yourself saves a whole lot more.
 

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Boost Creep
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Real Estate is almost always a good investment. You have many tax writeoff's and having money tied up in real estate is always OK. Consult an agent or broker if you are serious.
 

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I live in Va and bought a investment property with my dad a few year ago and we are renting it out. Its not covering all the mortgage but if you look at as in the future the house will be paid off someday and when i get older will be making postive cash flow. Its a long ride but if your smart about it you will benifit from it ten fold.

I look at it this way if and when the house gets paid off i can either continue to rent it and make 2k a month profit, or sell it and put 300k in my pocket and maybe buy 2 or 3 condos cash rent them out and make 3-4k a month positive cash flow. So many options but i will say Dc/Va/Md will always be a growth and stable state. My only advise is DO NOT buy anything unless your positive you can make payments and have some kind of knowledge with the process.
 

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I sold the only investment property that I've ever owned last September (thank god). I owned the place for about 2.5 years and only pocketed about $12k when all was said and done... I think if you can do it as a full time job and own 10-15 properties and have appropriate licenses so you don't have to pay a 6% commission to sell it would work, but if you're like me and are trying to mix it in with a 55hr work week its not worth the head ache.

I'm hoping in 10-15 years I will have saved enough money to purchase some commercial property, but I'm out of the residential game unless it is a home I'll be living in.
 

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stop playin wit mah name
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How many bedrooms does the "condo" have? I'd recommend you rent it out to Section 8 (low income). You'll be guaranteed to pull in rent, but you will have to deal with inspections and sometimes shitty tenants.

Here in MA, you can get approx $1,500/month for a 3 bedroom, and about $1,800/month for a 4, and $2,100 for a 5 bdroom.
 

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I love when people buy real estate, I'm in CT have rentals and I am of the belief that unless the property will make you cash each month it is not worth the head ache to not make any money. Make sure you run you numbers not just PITI add water/sewer special assessments, property management fees etc. How much is the mortgage and how much will you need to kick in each month to cover the expenses? You are in NY and trying to self manage a property in MD sounds tough. I'd do the deal if you are buying it for 70 cents on the dollar or less.
 

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BPU is so 1997
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Real Estate is almost always a good investment. You have many tax writeoff's and having money tied up in real estate is always OK. Consult an agent or broker if you are serious.
LOL wtf? Seriously? Is today's economic situation not a good example of why it ISN'T always a good thing to have money tied up in real estate?
 

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LOL wtf? Seriously? Is today's economic situation not a good example of why it ISN'T always a good thing to have money tied up in real estate?
true, but now while prices have fallen through the floor, wouldn't it be a better time to get in (if you have access to the funds). I don't know about there, but here our interest rates have hit rock bottom as well.
 

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BPU is so 1997
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Our interest rates were pretty low about two months ago. They've since gone up a hair.

Renting property to poor people seems great. Until they call you to say the fridge is broken. So you replace it with an OK one. They don't like that, so they bust the shit out of it and make you replace it again.

Then when you try to evict someone, it takes 4 months and you can't do shit about it, all while you're stuck making the mortgage payments. And when you finally do get a court ordered eviction, they fuck up your entire rental home and make it uninhabitable. Then you have to spend even more time and money to fix the damn thing.
 

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stop playin wit mah name
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Our interest rates were pretty low about two months ago. They've since gone up a hair.

Renting property to poor people seems great. Until they call you to say the fridge is broken. So you replace it with an OK one. They don't like that, so they bust the shit out of it and make you replace it again.

Then when you try to evict someone, it takes 4 months and you can't do shit about it, all while you're stuck making the mortgage payments. And when you finally do get a court ordered eviction, they fuck up your entire rental home and make it uninhabitable. Then you have to spend even more time and money to fix the damn thing.
Renting to the poor IS great because we're after the government's money and not so much theirs. The tenant's share of the rent can be anything from $0 to a few hundred. In some cases, we even let them have their share. It makes the tenant happy and hopefully they stay longer. This isn't the type of economy you want to be evicting people in and you will lose thousands if you do.

If you think you can rent out your apt for straight up cash and that you can depend on the tenant to pay every month, then you are setting yourself up to get fucked. With sec. 8, you'll get your money every month, guaranteed. (Unless you're a slumlord and the tenant will call inspections on you.)

As a landlord, you become responsible for whatever it is you supply your tenants with. Giving them a fridge, dishwasher, or what have you, is not something you have to do. It's a great for them to have, but when it breaks, housing inspection will write you up for it because YOU supplied it. This is the reason why we only supply a range and pay for the water, trash/snow removal. The gas and electric is their responsibility.
 

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Boost Creep
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LOL wtf? Seriously? Is today's economic situation not a good example of why it ISN'T always a good thing to have money tied up in real estate?
I'm not going to explain how to make money. All im saying is there is going to be incredibly rich people who in 3-5 years will be multi millionares from buying real estate now.
 

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Boost Creep
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true, but now while prices have fallen through the floor, wouldn't it be a better time to get in (if you have access to the funds). I don't know about there, but here our interest rates have hit rock bottom as well.
Exactly.
 

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Discussion Starter #16
I've never done this myself, but it seems like a no brainer if you can cover the mortgage payment and condo fee. I'd suggest hiring a local managment company to handle the day stuff instead of relying on a friend.
My friend is a life long buddy and we are probably going to buy another property together for the same purposes. He works for a custom homebuilder/renovator and is very good with housing maintenance and works with tons of different subcontractors (electricians, plumbers, carpenters, painters) who hook him up when it comes to personal work. I wouldn't think of him as an ordinary friend in this instance.

Real Estate is almost always a good investment. You have many tax writeoff's and having money tied up in real estate is always OK. Consult an agent or broker if you are serious.
I know very little about the tax situation with buying and owning a house so its something I need to look into. I also have heard that the recently passed stimulus package involves some very attractive tax incentives, but I heard it is limited to individuals making under $75K.

I live in Va and bought a investment property with my dad a few year ago and we are renting it out. Its not covering all the mortgage but if you look at as in the future the house will be paid off someday and when i get older will be making postive cash flow. Its a long ride but if your smart about it you will benifit from it ten fold.

I look at it this way if and when the house gets paid off i can either continue to rent it and make 2k a month profit, or sell it and put 300k in my pocket and maybe buy 2 or 3 condos cash rent them out and make 3-4k a month positive cash flow. So many options but i will say Dc/Va/Md will always be a growth and stable state. My only advise is DO NOT buy anything unless your positive you can make payments and have some kind of knowledge with the process.
I'm with you here. The reason I'm not looking to do this in the NYC area (other than the simple fact property cost twice as much) is I don't think the area is poised for growth.

I've also heard that Ft. Meade is going to be going through a huge expansion and the property I am looking to buy is located in Crofton (10 miles from Ft. Meade), so another positive. As a side note, I grew up in Crofton so I'm very familiar with the area.

My grandmothers place would a test property, sort of speak, and if I can manage it without it impacting my regular job and things go relatively smoothly, I have others that are interested in helping me purchase additional properties.

How many bedrooms does the "condo" have? I'd recommend you rent it out to Section 8 (low income). You'll be guaranteed to pull in rent, but you will have to deal with inspections and sometimes shitty tenants.

Here in MA, you can get approx $1,500/month for a 3 bedroom, and about $1,800/month for a 4, and $2,100 for a 5 bdroom.
2 bed, 2 bath.

Don't know much about section 8 housing, but I'm initially scared. You make good points though. Have an good sources of information on this?

I'm not going to explain how to make money. All im saying is there is going to be incredibly rich people who in 3-5 years will be multi millionares from buying real estate now.
Thats what I'm hoping : ) I have a little money sitting in a savings account that I'm just nervous putting in the stock market right now and thats what I'll use to help buy this place. I'm just going to start with one, then maybe buy a couple more if I can manage. Who knows, maybe someday it'll become a full time job.

On the extreme other end of things, I work with lots of residential real estate managers/owners, who own between 2 and 50 apartment buildings in NYC that they've slowly acquired over many years and they are completely rolling in money (I'm talking 100s of millions in net worth). Not that I'm getting to that level but it is somewhat inspirational. Baby steps for the time being though.
 

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Look at multiple managing companies, don't ever choose the first one. I would say definetly look at the ones that are the most organized and won't cut corners. You don't want to have a problem later on and having it be you fault for only looking at that managing company.

Before buying the house I would look at the homes in that area from prior years, to see if they've gone up. Reason being we absolutely have no idea how the economy will end up right now.

Real estate seems like it really has gone stail, in order for property value to rise you have to have buyers. Economy isn't doing well, people are less willing to buy a home unless their financially pretty stable. As for the thing about Ft. Meade going through an expansion, I really have no idea about that since i'm not in the area but, in order for local goverment, i.e, state/city they need money to make money. Government has no money, so their less willing to invest in housing expansion.

I would say break down all your spending, before you make a move on something that's out of state. Because there could be draw backs, mainly because when you buy real estate more people tend to look at long term investments. You won't see yourself making any money until the economy kind of starts to rise, then potential buyers/renters will start to show up.
 

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Section 8: While you are guaranteed the $$$ being paid by the gov't, you may ultimately be short-changed by the tenant. Then you have to go through the hassle of an unlawful detainer to kick out the dead beat and dealing with a collections company to get your tenant's portion. You also have to be wary as low-income/poverty brings along its associated vices (drugs/crime). It may be a pain in the ass. If you are willing to take that risk and throw the dice, then go for it. Why not see how well you do with normal tenants before dealing with the riff raff?
 

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Haunting mass appeal
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I'm not going to explain how to make money. All im saying is there is going to be incredibly rich people who in 3-5 years will be multi millionares from buying real estate now.
I wouldn't count on that. Don't expect another real-estate bubble anytime soon. Do expect it to get worse, then, hopefully, realistic appreciation. Hardly a playground for wannabe investors like a few years ago.

If you're getting your advice from a realtor i would strongly urge against that, i've worked with many of them and most of them are full of shit, especially out here (except PLAYBOI)
 

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BPU is so 1997
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I'm not going to explain how to make money. All im saying is there is going to be incredibly rich people who in 3-5 years will be multi millionares from buying real estate now.
I don't need you to explain how to make money.

You think you are going to be rich from making mortgage payments on a property and renting it out to someone in 5 years?

:freak:

You haven't even paid much on the principal yet in 5 years.

Home prices have just now gotten down to where they should be, or at "normal" pricing now. Home values haven't really fallen. They've just fallen from their over-valued amounts to what they should have been from the beginning.
 
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