You must not be a landlord to ask that question.
How about the simple and common practice of bouncing
footballs/baseballs/basketballs against the house walls?
"Hey, that's what my security deposit is for, right"?
I have couple of units where the tenant put 3" nails on the facial all
around the exterior of the house for Christmas lights - pull nails out,
patch and repaint. One put holes around all the windows into the stucco -
patch and repaint. One lost his keys (tenant's kid) and decided he had to
pee on my exterior wall. Another one show off with his cars, cash, guns and
jewelry so he was robbed (home intrusion) and I ended up repairing the
broken front door and frame - painted one side of the exterior wall to
match. The same tenant with the fancy cars hide his money and guns in
interior walls and when he left, open walls and damaged structure had to be
replaced and painted ... sorry, that's interior.
The positive side is seeing property values double every seven years with
the tenants paying a good part of the mortgage and the huge run up we had
couple years ago before the market down turn. Income, shelter, leverage and
of course you could deduct all your construction toys, I mean tools. When
you get sick of the tenants and trash, occupy it 2 out of 5 years, and claim
a huge $250k (or $500k if married) tax exemption on your gain ... sweet.
Not in today's market if purchased high and flip now, but the above is my
long term investment average since 1975 including markets like today's.
Doubling every seven years translates to about 10% average appreciation
which is no big deal until you factor leverage into it. I think the national
average is around 8% long term.
If you want to do this well in today's market right now, look into
commercial properties which is not in lockstep with the residential
downturn. It also has a better positive cash flow than single family units.
True on real rental properties. We rented two houses to four different
Police Officers, two to a house. Rented them for two years. They wouldn't
change a light bulb or pick up a beer bottle, and there were thousands.
But, they did pay their rent on time.
Then we decided on vacation rentals. House payments were about $700 a week.
We now get $300 a night, $1700 a week, $3900 a month. Plus $100 cleaning
fee for each group, which we just pass along to the two lady team that
cleans the house.
When you get those rates, the maintenance takes on another dimension. And
the people who stay are a totally different class of people. In three years
on two houses, we only had one bad group, a bunch of frat rats that came for
the poker tournament.
The bulk of our investments is in first deeds of trust through a gentleman
my wife went to high school with. Very high rates for short term deals.
Loans secured by real property. Still, it's hard to ignore a cash cow like
a vacation rental when lots of people who come to Vegas pay cash. The vig
on hard money lending is good, but cash is always handy, too. For SOOOOO
many things. ;-)
We have local taverns in Las Vegas (PT's Pub), so a guy mentioned one
day (not in the pub) - if they build PT's near you BUY!
Twelve years; I've been here in Vegas, and commercial continues to
expand. I'm expecting a new red light at my nearest (main)
I think/know you might be right :)
"I don't mind coming to work, but that eight hour wait to go home is a bitch!"
Many things affect the market, Oren, and region is one of them. Last year,
Las Vegas was projected to run out of buildable land in the valley. If you
can hold out, things should start to pick up again here next year, ratchet
up for five more, then zoom when land fizzles out in Vegas.
We had our houses for sale, but now plan to continue using them as vacation
rentals, and enjoy the cash flow until the market either picks up enough to
get our price, or really starts jumping more than 8% per year in valuations.
Now we're going to hire a resident manager, and just sit on them. Houses
near Harmon and Sandhill.
90 percent of Nevada is still held by Bureau of Land Management (BLM).
the last 10 percent is owned privately.
I don't want them to auction off the land for more houses to compete
with mine. Buy my existing one :-) Prices stay up when they don't
release the land to developers.
A guy in the Anthem/Seven Hills (local Las Vegas) was getting 5K a
month from a Casino Executive for a comfortable rental. The vacation
rental paid for a brand new pool - for the rental home...
"Well, it doesn't happen all the time, but when it happens, it happens
If the numbers work; why not?
I had two occupied rentals; double in price (recent bubble), so when
the lease was up they were sold. Oh, no more tenants :) All in 18 - 24
I moved across town and got us a single floor home :)
"If things get any worse, I'll have to ask you to stop helping me."
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