resources about a rental property business

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leeks
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Joined: Thu Apr 07, 2011 4:33 pm
Location: new york

resources about a rental property business

Post by leeks » Thu Jan 10, 2019 3:41 pm

I would like recommendations for resources about starting a side-gig business that buys rental property and manages short term (airbnb/vrbo) and long term rentals. I feel like a website is the better place to start as a book is likely to be outdated quickly (for example, recent years have seen changes in the short term rental market and in tax laws).

I know we need to learn more first, both about financing/liability options and about rental/lodging laws. I understand it requires significant time investment. I have hospitality experience (was an innkeeper earlier in life) but none yet in home maintenance/construction (although I am reasonably handy). Ideally, something like this is where we would want to start (it may not be practical now or ever, but it is what we would like to consider and research further):
  • Buy a 2-3 family house in Virginia or New York (outside NYC). The location would either be one of the cities in Virginia where we have close family (and visit regularly staying in AirBnB rentals) or it would be within a few hours of NYC (near hiking areas we like to visit). From looking at listings for the kind of properties we have in mind, I estimate the purchase price (and immediate renovations if needed) would be in the range of 350-550K.
  • One unit would be rented to a close reliable relative at below-market rent in exchange for property management duties. One unit would double as a vacation home for my family (me, husband and 2 kids) and a short-term rental. If there were a 3rd unit, it could be either short or long-term rental.
  • If the relative moved or became unable to fulfill duties, we would hire a local property manager. The plan would be to set everything up to be flexible and easy to convert units back/forth between short and long-term rentals as needed (and possibly to convert between 2 and 3 units easily, depending on layout and zoning laws).
  • Ideally the property could generate enough rental income to cover the mortgage and all expenses. But we might even be satisfied if rental income simply covered mortgage interest, property tax, and maintenance. I think we could live with the down payment and principal payments serving as (1) the cost of us having a vacation home (with a relative who can babysit - quite valuable to us!), (2) the cost of providing affordable housing to a relative whom we are likely to start subsidizing soon anyway but aren't ready to live with full time, and (3) as an investment, with obvious risk.
If we had something like that set up and it managed to turn a profit, then over the years we might like to buy more properties and expand the rental business.

So Bogleheads who have rental properties, what websites/message boards/analysis tools/etc would you recommend?

fabdog
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Location: Williamsburg VA

Re: resources about a rental property business

Post by fabdog » Thu Jan 10, 2019 4:11 pm

biggerpockets.com is focused on real estate investing

Mike

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leeks
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Joined: Thu Apr 07, 2011 4:33 pm
Location: new york

Re: resources about a rental property business

Post by leeks » Thu Jan 10, 2019 4:42 pm

Thanks for your reply Fabdog, but I think I'm looking for guidance that is a bit more conservative/simple/straightforward (more like bogleheads!). I have looked at biggerpockets but the tone makes me extremely wary:

https://www.biggerpockets.com/renewsblo ... er-stocks/
"Unlike other investments, real estate can return money over the lifespan of the asset. It’s kind of a no-brainer."
I'm not in favor of picking individual stocks either, but this article is written as a sales pitch, not objective advice.

https://www.biggerpockets.com/webinars
"Self-Directed IRAs: How to Tap into an Unlimited Source of Private Capital for Investing! "
I am kind of horrified at the suggestion to ask other people to lend me money for real estate investment from their *retirement* accounts!

euroswiss
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Re: resources about a rental property business

Post by euroswiss » Thu Jan 10, 2019 4:53 pm

If you are seriously interested in starting to invest in rentals, you are making a huge mistake by not exploring biggerpockets. It is an enormous forum with vast amounts of information. Of course, as it is a real estate site, it is a bit (in some cases a lot) biased, but there is no other place where you will find that much information in one place - for free. You'll have to invest some time to learn how to use the site to your advantage, but it is worth the time. Once you are familiar with the site, you will learn who the most active, most conservative, most aggressive, etc voices are and you can pick and choose who you pay attention to. I assume that is how you use bogleheads.com too - you don;t just believe anything you read on this site, just because it is on this site..... right?

PS: you can always buy a REIT or a REIT index fund - that will give you real estate exposure with much less risk and no hands-on involvement. Dealing with tenants can be rewarding, but certainly is not for everyone.

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Sandtrap
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Re: resources about a rental property business

Post by Sandtrap » Thu Jan 10, 2019 4:55 pm

You are right to be "wary".
Be careful at the "Bigger Pockets" site. There's some solid info based on long experience, and not so solid based on nothing.
Reading the fundamentals on various books are great as long as you avoid the "schemes", Kiyosaki, Rich Dad Poor Dad, How to make money or get rich in R/E doing it the way (someone) I did it, and so forth.
There's a lot of good info, but learn to separate the wheat from the chaff there. High leverage and rapid growth = risk, vs step by step slow and steady.

You are wise to get a "Bogle" perspective as, in general, the approach is more comprehensive and integrated with personal financial stability and growth, often through diversification in R/E as a principal or side endeavor.

Thus: google/search the forum archives for rental business, tenants, and so forth. You will, after awhile, see a pattern in various members as far as approach and attitude toward R/E income property. From high leverage to more conservative. Etc. Etc.

Here's a recent ongoing thread:
viewtopic.php?f=2&t=268780&p=4312004#p4312004

There are a number of very experienced forum members that post regularly to help others like yourself.
IE: "Denovo", etc, etc.
Just read some of the threads and find the one that best resonates with you and your approach to finances in general.

The best info that you can gather is to learn from others that you know that own(ed) and have operated a successful R/E income property business over a long term with a proven track record of success. Both in short and long term rentals. And, the more the better vs one single family home rented out, or one condo unit rented. . vs. . . multi unit housing, multi unit AirBnB/VRBO, etc. There will be a difference between someone running a R/E income property business and others doing so in a small more passive manner.

Good luck.
jim :happy
Wiki Bogleheads Wiki: Everything You Need to Know

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