Getting started with rental properties

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exigent
Posts: 752
Joined: Fri May 07, 2010 8:49 am

Getting started with rental properties

Post by exigent » Sat Jan 20, 2018 4:44 pm

Hi all,

We live near a fairly major college town and have long considered the possibility of adding some real estate to our holdings. We’ve always envisioned first getting our feet wet by picking up a property that one or more of our kids could live in while in school (saving on dorm/rent expenses), renting out a bedroom or two to provide some cash flow, and then perhaps converting it into a straight up rental when we no longer have a personal need for it.

Recently, our second son has decided to attend school here. Our first is already attending and is looking to move off campus after this year. We have two more coming after them. No idea where they’ll got to school, but it looks like we may have an ongoing presence at the school for awhile. Thus, it seems like a good time to consider this more seriously.

Setting aside portfolio details, and just assuming that we’re in a financial position to pull this off, and that it makes sense from that perspective, I have a question for those who have taken the real estate (rental property) plunge...

How happy have you been with your decision to do this? Would you do it again if you had the choice? Which aspects are you happiest with? What are your regrets (if any)?

Thanks.

PFInterest
Posts: 2575
Joined: Sun Jan 08, 2017 12:25 pm

Re: Getting started with rental properties

Post by PFInterest » Sat Jan 20, 2018 4:58 pm

you should look over at biggerpockets, lots of posts about this.

MinimalJ
Posts: 14
Joined: Fri Nov 11, 2016 3:34 pm

Re: Getting started with rental properties

Post by MinimalJ » Sat Jan 20, 2018 5:00 pm

I was thinking about this recently myself aswell and stumbled on this other boglehead thread by denovo. It has some good points to think about, hope it helps...

viewtopic.php?t=226980

exigent
Posts: 752
Joined: Fri May 07, 2010 8:49 am

Re: Getting started with rental properties

Post by exigent » Sat Jan 20, 2018 6:41 pm

MinimalJ wrote:
Sat Jan 20, 2018 5:00 pm
I was thinking about this recently myself aswell and stumbled on this other boglehead thread by denovo. It has some good points to think about, hope it helps...

viewtopic.php?t=226980
Good link, thanks. What are your own general thoughts? Anything in particular holding you back?

MinimalJ
Posts: 14
Joined: Fri Nov 11, 2016 3:34 pm

Re: Getting started with rental properties

Post by MinimalJ » Sat Jan 20, 2018 7:10 pm

exigent wrote:
Sat Jan 20, 2018 6:41 pm
MinimalJ wrote:
Sat Jan 20, 2018 5:00 pm
I was thinking about this recently myself aswell and stumbled on this other boglehead thread by denovo. It has some good points to think about, hope it helps...

viewtopic.php?t=226980
Good link, thanks. What are your own general thoughts? Anything in particular holding you back?
My personality style. I'm very introverted and don't like the idea of dealing with people about those kinds of issues, even if I can leave it to a management company. I'm leaning towards being a lifelong renter as well. I just invest what would normally go into a mortgage to mutual funds. I'm leaning towards not having children so am fine living in a studio apartment the rest of my life. I'm more on the extreme side so you should probably ask someone else as well :)

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White Coat Investor
Posts: 13541
Joined: Fri Mar 02, 2007 9:11 pm
Location: Greatest Snow On Earth

Re: Getting started with rental properties

Post by White Coat Investor » Sat Jan 20, 2018 7:16 pm

exigent wrote:
Sat Jan 20, 2018 4:44 pm
Hi all,

We live near a fairly major college town and have long considered the possibility of adding some real estate to our holdings. We’ve always envisioned first getting our feet wet by picking up a property that one or more of our kids could live in while in school (saving on dorm/rent expenses), renting out a bedroom or two to provide some cash flow, and then perhaps converting it into a straight up rental when we no longer have a personal need for it.

Recently, our second son has decided to attend school here. Our first is already attending and is looking to move off campus after this year. We have two more coming after them. No idea where they’ll got to school, but it looks like we may have an ongoing presence at the school for awhile. Thus, it seems like a good time to consider this more seriously.

Setting aside portfolio details, and just assuming that we’re in a financial position to pull this off, and that it makes sense from that perspective, I have a question for those who have taken the real estate (rental property) plunge...

How happy have you been with your decision to do this? Would you do it again if you had the choice? Which aspects are you happiest with? What are your regrets (if any)?

Thanks.
Not sure I qualify. I've shied away from owning properties directly since my accidental landlord experience. I prefer to invest through REITS, funds, and syndicated properties where management is hired out. But I've given this a lot of consideration and read up on it and I'm confident I know HOW to do this and do it well. But I still don't get excited about doing it. There are certain aspects of a second job to it that I do not/would not find enjoyable.

That said, I know A LOT of people for whom this has worked out well and who have worked out their systems to minimize a lot of the second job aspects of direct real estate ownership.

Maybe I'd consider it again down the road if I stop doing so much internet stuff and have more time. Maybe even buy a few condos in the college town I expect at least some of my kids will live in.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

Fan23
Posts: 41
Joined: Tue Dec 12, 2017 1:47 pm

Re: Getting started with rental properties

Post by Fan23 » Sat Jan 20, 2018 8:11 pm

I did it but I would not necessarily recommend it. It's like a part-time job at times and college students are very hard on a property. I ended up marketing my unit primarily to university-affiliated professionals such as visiting faculty, post-docs, and grad students. Undergrads can be good tenants (I certainly was, a long time ago), but most of them don't know how to take care of a home and they can do a lot of damage.

As far as having your own child and their friends living there, make sure your children agree. My children would absolutely not agree to have their friends paying rent to us, and I could see how uncomfortable that might be, so I dropped the idea.

The owners of the other unit in my duplex had their four sons living in the unit while they attended college. I never asked them how they liked the arrangement, but they owned the unit for 8 or 10 years, till all four sons were graduated. They wanted to sell to me, but I took a look and the place needed so much work after all that time as a college rental. No major damage but just terribly shabby, dirty, and worn-out looking, so I passed.

I've owned my unit 8 years or so and thinking of selling it and investing the money instead, just to simplify my life. I've not had any major problems, just a small stream of petty annoyances. I don't enjoy it and would prefer to be out from under the responsibility of attending to the needs of tenants and maintaining the property. It might be different for someone who actually enjoys the business of being a landlord.

staythecourse
Posts: 6126
Joined: Mon Jan 03, 2011 9:40 am

Re: Getting started with rental properties

Post by staythecourse » Sat Jan 20, 2018 8:44 pm

I know NOTHING about rentals, but would know enough NEVER to get into rentals for college kids. That is asking for trouble (damage, complaints from neighbors, not paying rent, etc...)

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

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