Anyone here do well in rental property? It's something I might want to get into in the next 5 years or so. I'm curious how one would get started besides having unrestricted cash. Also, any good books to start reading? PM me if you wish.
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Once you've got your info, pls PM me with info on 'having unrestricted cash'. Thank you.
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Chippewastud does some of that kind of investment. If you can pull him away from the thread where he bashes the Cincy Reds incessantly :-), he can offer up some advice I would think.
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+1
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I had 5 rental properties. Aside from being a royal pain in the ass and a crazy amount of work, they were great for my taxes and paid for themselves and my home.
I never paid a dime for any of them. We used the equity in our home to buy the first rental and bought well. We used the equity in that one to buy the second, and so on.
The only drawback is that all the stacked second mortgages tie up properties when you want to sell, so it's very important to use the same bank.
You also won't have the equity in your home available for a loan, but I've never taken a home equity loan in my life, so it's a non-issue for me.
If you want to really learn a lot about being a landlord and hear about things you'd just never think about, get on ebay and buy the Carlton Sheets course. It's full of very valuable info and will head off a lot of problems you'll run into in the future.
You'll also want to learn how to search title at the courthouse so you can make sure properties you're interested in have clear title before you act. Otherwise you'll spend a lot of lawyer money for nothing and waste a lot of valuable time.
Good Luck, man!!! :-)
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If you don't want the hassle of actual property ownership, explore real estate investment trusts geared toward rental property: rREIT
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I own a few rentals, depends on what you want to accomplish with them and how much work you want to do.

Do you want cash flow or equity?
Easy money and more headaches? Less money and potential easier tenants?
Long-term tenants? College kids?

We own college rentals, the money is greater because I can charge by the room instead of the entire unit. We also rent a residential condo that was our former residence, the income is slim to none and we have problems with our HOA allowing rentals.

Expect to put down a minimum of 20-30% and the best rate you will be able to get is prime +1%. A lot of banks are shying away from income properties, so qualifying for conventional loans has become more difficult, expect to get better rates on 5-10 year balloon, ARM or <15 year loans.

It is a headache, its a lot of work, but you get your own hours. With rentals expect to break even a lot, there are always expenses and lots of unforseen issues. Our rental 'income' last year was enough to reduce our tax liability into the lowest possible bracket. Thank you very much, $5000 in our rental vehichle repairs, 2 new wells in 9 months, evictions and vacancy. :-)

If you have specific questions about anything, shoot me a PM or post them in here. Its not like I am a some super slumlord with all the answers, doing something other people haven't. :-)

Reading:
Your local Circuit Court documents on:
Small Claims
General Civil
Evictions
Landlord/Tenant Rights

Look at lots of leases, seriously, start throwing parts of leases together to make one that works for you. Our lease changes every time we change tenants because of one issue or another. I have seen leases as short as 3/4 of a page and as long as 12 pages, ours being in the middle of those extremes. :-)

I apologize for this being a jumbled mess of crap. :-)
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Often thought about this as my neighbors has rentals. Problem is I already have huge pains in the ass with normal living. I'm going to keep on buying lottery tickets.
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As a teenager, my father owned 15 or so rental homes. It kept me and my best buddy (builder's son) in very good cash flow doing the constant repairs where needed, plus putting every one of the houses back in livable condition when the renters moved out. It was pretty much a given that every vacated home would need plenty of renovations to get them back into lease-able condition.

If you can do some of the renovations yourself, you will be able to keep those cost to at least a manageable level. Just be prepared that most renters will leave a property in worse condition than they found it. I wish it was otherwise!

On the positive side, there's hardly a better time than now to be to be buying property!
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I am a landlord by necessity not choice. I moved for work and could not sell my house without taking a huge hit ( thank you economy) so now i rent it. Im not in it for investing but i can tell you finding good renters is key. I have yet to do that. No matter how hard i screen people i seem to get the dregs of society. You should have seen my house after the last people moved out. They smashed windows, ripped the banister off the wall, ripped the control panel for the sprinkler system out, and broke all of the shelves in a brand new fridge. Just to name a few things.This was a family mind you, a mother and two 10 year old kids. If you dont mind dealing with people im sure theres plenty of money be made. As far as im concerned once i can break even im selling the house and i will never rent out property again. :-)
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What kind of rental property are you looking to buy? Who is the the renter most likely to be? Students, family, or Section 8? Each group has its advantage. Do you plan to manage it yourself or have a property management company take care of it?

Most of my friends are in a real estate business in Boston, as was I a long time ago.

Section 8 - Guaranteed money, but hard to kick out and may have to do more work on unit to qualify. Easiest money route

Students - Higher rent, but more damage to unit and may need to pay rental commissions more often due to higher turnover.

Family - Can be good or bad. Can be a hassle to kick out, but may be gentler on property than Section 8 or Students.
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Good points by Cliff and Scott. I can't begin to convey all the $3,000 bills (and worse) from bad renters. It's very frustrating when they're destroying your property and it takes almost a year to get them out when you go through the "legal channels" to have them evicted. Bad renters know the system and rely on it.
Most all landlords try the "take the doors off" trick or "shut the power and water off" trick, and that just gets them in trouble. It's illegal.
I used subtle persuasion. I waited till they left and moved all their things to storage. It was a simple process. They always called the police and they'd come talk to me. I'd explain that they hadn't paid rent in months (which was ALWAYS the case) and that I'd tried to contact them dozens of times (also true) and assumed they'd abandoned the property based on the condition of the living quarters. All I had to do is show them and they immediately took my side and asked me to return their items. I'd explain that all they had to do was go to the storage facility and pay the bill and they could retrieve their personal effects.
It never failed. It wasn't my idea, either. A good friend of mine who had a number of rentals gave me the idea. It saved me a fortune. :-)

When keeping security deposits in these instances, it's law to send a letter to the renter outlining the conditions why you've kept it. It's a good idea to add in all the other costs incurred and to send it certified. If you don't, they can take you to court, sue for their deposit, and you'll have to pay them double plus court costs. If you arrive at court with the returned certified letter (that you sent to their address at your property because they never leave a forwarding address with the PO) the case is over before it starts.

Those are just a couple horror stories I thought of. There's lots more.
If rental properties are personal, it's not something to get into. Things like renting your current home, or the home you've lived in for years, or the family homestead, things like that.
If there's emotional attachment, it'll drive a person mental. If it's just a business, not so much. It's still tough, though. It's not for the faint-hearted.
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I think 2-3 years ago, I saw one of the condos for sale that I lived in on campus about 15 years ago. It was a decent location when I was there and was pretty good sized place to live for a 3 BR apt. My thinking it would be something nice to have for my daughters to live in while they were going to college.

I looked into the current housing situation because the area is night and day difference compared to when I attended because they've changed so much. The end result was that they're currently renting it today isn't much more than what I paid 15 years ago. I figured after management expenses and to clean carpets, I'd manage to break even at best, with anything else over that being a losing proposition.
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I rarely contract out any work, except electrical and plumbing. Having to drill a brand new well pretty much kicked our ass (I don't drill wells either). Also went through a huge debachle of deadbeat renters who lived for 5 months, paid for 2 and cost me another month cleaning up the mess. :-)
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The two best tips I have learned.
>Don't rent to family or friends! It just invites awkward and unnecessary problems. Also they seem to feel like on time and full payments are optional.
>Charge a premium and or invest in "better" property's and skip the slum lord route. There are plenty of people looking to rent a house and more all the time with the current foreclosure rates.

I have been involved in the rental business since I was eight or nine years old, My folks have had many rentals and they still continue to be my problem. I have seen some of the grossest nasty things you could imagine (including a suicide) in a rental.....It can be tough.

With decent planning it can be a very lucrative proposition though.

As a side note....with all I have seen I still am trying to purchase another property.....:-)
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I would like to buy decent homes to rent out to families or young couples. Part of making money on this is buying nice homes for bargains and then charging a premium. I know a guy that has made tons of money with his rental property business, however he rents to really bad people. He has TONS of issues with his people, and I know its because he rents out crap property for cheap. He has told me many times he carries his Glock with him whenever he makes stops at his property. I DON'T want that type of property or those people renting from me. I know now is the time to buy property, but I don't have enough cash. 5 years down the road I'd like to have enough.. I want to plan right now to have enough cash when the time comes..
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I want to buy homes and rent to families or young couples. A family friend I know rents tons of apartments.. But he is renting to low lifes.. Thus, he fights them all the time, carries a handgun, and is in court often..
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I should also add I want to actively manage my houses, therefore I won't be needing many rentals..
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I'll take a look into this tonight.. Sounds interesting..
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Section 8 is the easiest rental as long as the numbers work
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