Why doesn't everyone own a home as a business and rent elsewhere?

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clemrick
Posts: 248
Joined: Wed Sep 09, 2009 8:46 pm

Re: Why doesn't everyone own a home as a business and rent elsewhere?

Post by clemrick »

What if you get a lousy tenant and try to evict them and they blow up the house? https://www.dailysabah.com/europe/2019/ ... in-germany
JimInIllinois
Posts: 387
Joined: Wed Dec 22, 2010 9:55 am

Re: Why doesn't everyone own a home as a business and rent elsewhere?

Post by JimInIllinois »

cshell2 wrote: Thu Feb 20, 2020 12:10 pm Being a renter is starting to sound a little more appealing as I get older and more sick of dealing with maintenance, however, I have never rented in my life, so I'm sure there are drawbacks I'm not thinking of.
As a homeowner you can pay people to do the maintenance tasks you are sick of, and if you don't like their work you can hire someone else.

As a renter you have to convince the landlord to spend his time and money to maintain and repair things. It might be fine with a good landlord until they sell the place and you have to deal with someone new. There is also the risk of having to move on relatively short notice if for whatever reason your lease isn't renewed.

If your home is a condominium the association will take care of the grounds and shell so you only have to worry about the interior, which is pretty minor (change the furnace filter, unclog the drain, appliance repair and replacement), and dues changes require a majority of the owners. Personally I would feel lazy paying for lawn care and snow removal that I could do myself, but when it's included in the condo fee I simply enjoy not having to do it.
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Mactheriverrat
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Location: Works on the Mississippi River on the barges. Live's in Little Rock, AR.

Re: Why doesn't everyone own a home as a business and rent elsewhere?

Post by Mactheriverrat »

Most HCOL area's go hand in hand with great job opportunities area's.

Most people in these area are living the high life style's , trying to keep up with the next door neighbor's.

Simplify!
Everything evolves. | May Every Sunrise Bring You Hope. May Every Sunset Bring you Peace.
StealthRabbit
Posts: 528
Joined: Sat Jun 13, 2009 1:25 am

Re: Why doesn't everyone own a home as a business and rent elsewhere?

Post by StealthRabbit »

harvestbook wrote: Wed Feb 19, 2020 7:19 am Because I'd have to get the tenants to tend my chickens, garden, and fruit trees.
My tenants love to feed my livestock, use my chainsaw and tractors, and enjoy the view and peace and quiet and security. We have 12 rural rental properties, and still able to take a year off to travel around the world. The sky didn't fall.

As expected, you will find significant negative "thoughts" on RE Investments on Bogleheads. That is to be expected, as all E-posters want to know and feel they are correct. (Facebook -'like me' syndrome).

There are as many Right ways to do RE as there are boglehead methods to secure and build Non-RE investments. That's fine.

Go hang out at Bigger-Pockets for a RE perspective. +/-.

I, and many others use 'Balanced' opportunities for investments. Private Business, wages, stocks, bonds, treasuries, Real Estate, farms, inventions / designs,collectables, (some get inheritances, I inherited family debt when I turned age 18), Lots of paths to wealth, use whatever fits you / or your skillset or knowledge.

I use a lot of mentors, some are very successful in some or all of the above.

To do my wealth building again, I would have invested my time in a very viable business, and my funds into NNN or land lease commercial property. One farmer friend has land at a busy interstate highway exit. He has Burger King, McDonald's, Subway, truck stop, tire service, all paying a land lease (tenant does all the 'build-out' and pays Maint, taxes, insurance..).. And if they leave, you get to keep their improvements. Really no hassle RE option (with a degree of LT risk).

The LAST thing I would do for wealth building is wage income. Tho many here would dispute that, as it worked fine for them. My pappy would not agree. He started his first business at age 14, when he had to leave home because his parents could not afford to support him during the Great Depression. Wage income was never an option or desire for him. Time is money. If you are being paid for soils or services, you must be making MORE money / benefit for your employer. If not, poof, you are gone. If you are making lots of money for an employer.... That benefit could be growing your own company. (+/-).
azianbob
Posts: 356
Joined: Tue Jan 15, 2019 6:53 pm

Re: Why doesn't everyone own a home as a business and rent elsewhere?

Post by azianbob »

Remote landlord is tough from what I hear, especially if your property management company is bad. They will just "fix" everything at super high rates since they just pass on the expense to you, while pocketing 10% of the rental income to do nothing most of the time (if renters are long term, they don't have to spend time finding new renters, most rent is now paid electronically, they just get calls from the renters and then turn around and text their handyman to fix things).

I've thought about this too since I live in a HCOL area, and I can afford to buy a home in cash in certain parts of the country. However the logistics make it too much of a hassle for me, the only thing I can think of is to keep saving money and then retire to one of those LCOL areas and buy my retirement home then.
Gropes & Ray
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Re: Why doesn't everyone own a home as a business and rent elsewhere?

Post by Gropes & Ray »

$500k of sheltered capital gains on the sale of your primary residence?
manuvns
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Joined: Wed Jan 02, 2008 2:30 pm

Re: Why doesn't everyone own a home as a business and rent elsewhere?

Post by manuvns »

watchnerd wrote: Wed Feb 19, 2020 1:09 am
manuvns wrote: Tue Feb 18, 2020 11:42 pm it probably works in places where rent to property prices ratio are 1:100 and it's only possible in certain areas , most people on those cities hold job that barely pays for rent / mortgage , most don't know how to become landlord or have moeny to buy investment property .
1:100.... where are such places?

Even when I lived in the Bay Area, the ratios weren't that high.
sorry i was referring to monthly rent . ie 100k property that rent for 1k .
Cleveland ,OH or Birmingham,AL....
michaeljc70
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Joined: Thu Oct 15, 2015 3:53 pm

Re: Why doesn't everyone own a home as a business and rent elsewhere?

Post by michaeljc70 »

I didn't read all the responses, but agree with most of the reasons given. I'll add two I didn't see: you don't get a homeowner's break on property taxes. This may or may not be big depending on your state/county. Also, financing a rental is more difficult than a live in SFH.

This was partially mentioned: when you sell there is no homeowner's exemption on gains plus you will pay gains off the depreciated value. Over many years, this can lead to huge taxable gains.
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