Memes

I looked after a house that my brother owned while he was out of the country for a few years. The first tenants were a group home that destroyed the place so much we had to gut the drywall and they never paid the rent until I hounded them endlessly every month. Every month.

The other tenants were just regular families and pretty good for the most part.

I would say I was dealing with something related to that house all the time. Every three weeks for stuff. Leaky faucet, roof shingle gone, branch fell on the lawn, sewer backed up. Big and small, all the time.

And they always called late at night or very early in the morning. This was before texting and email was common, etc.

My brother was paying me to do this, I would have done it for free but he insisted, but I was so glad when he sold that place.

I dealt with everything promptly. A family friend ran a property mgmt business and his crews did all the work promptly and billed us direct. People still always seemed annoyed and dissatisfied. Never again.

I'm somewhat "glad" I'm not renting a place owned by some rich chucklefuck, but one owned by a company. I know, sounds weird, but at least my rent money is going to something useful, since they employ their electricians, plumbers etc., hire a cleaning firm to clean the stairwell, and have a website where I can report problems, look at my energy consumption, stuff like that.

I think the main money maker isn't rent. It's owning (or at least having a mortgage on) property that doubles in value every ten years.

The rent often just pays for the mortgage and upkeep. The main payday comes when they sell it all off to the next parasite.

It really depends on the nature of the rental and your area. If instead of building a house you build 4 closely stacked duplexes and charged each one double what the mortgage would be you'd definitely make money, but you'd also be an extortionate leech. In my area someone built 4 nice duplexes on a double lot (probably around 1.5 acres) and is now renting them at $1800 each. The land was probably less than $55k and the cost of construction was likely less than $1 mil. At 5% interest on a 30 year loan their monthly payment would be $5,600, but they're bringing in $14,400 per month.

$1800 for rent is an extortionate price in my area (it's big city apartment rental prices, with a pool and gym), even after interest rates went up.

On the other hand, I knew a couple who were landlords for nearly 20 years. They rarely raised the rents and even in 2022 they were still charging <$1000 per month for a full house because that paid the costs and for them it was an investment, not a source of income.

They finally sold their rental homes and made about $70k over what they originally paid on each house. Doing the math that comes out to be a roughly 8.5% annual percentage return without counting the rent gained each month. That's a fairly solid investment without being a sucky person.

"Landlords are rich leeches" is still true because the vast majority of property in the US is not owned by hard working people who are investing their earnings owning a handful of properties at most, but by property companies and hedge funds.

It's hard to get a good return on your investment in residential real estate without using leverage.

For instance: You don't buy one place outright. You buy 5 with 20% down. You may not have positive cash flow, but at long as it isn't negative not only do you get all the increase in value, you also get more equity every month as the tenants pay your mortgages.

If you bought it outright and over some period of time the tenants have paid your entire investment and the price of the property doubles, you doubled your money. If you buy 5 and over some period of time the tenants pay your mortgage and initial investment and the properties have doubled in value you have increased your initial investment 10X. And before the big expensive renovations come in, you can sell and buy something else if you're not equipped to deal with that.

Also if you are just breaking even to get free property but you want to start getting passive income, after a few years you can refi to a longer term and lower your mortgage payments to get in the black every month.

This isn't advice, fuck anybody buying up single family homes to rent, just showing one way they can generate both wealth and passive income for nothing. Literally nothing if they're using a property management company.

Fuck anybody buying up single family homes to rent. I know I already said that, but it bears repeating.

Thats the american dream isnt it? To be exploited until you do the exploiting? God I love America

Step 1: Use the equity you've built up in your primary dwelling to put a down payment on a second house, which you can rent out. Congratulations, you now have a second job to fill your evenings and weekends.

Step 2: Hope like hell you get a decent tenant who pays the rent on time and doesn't destroy your property.

Step 3: Pay all of the taxes, mortgage payments, maintenance costs, repairs, legal fees, etc., which the rent will just barely cover. Of course, most of the mortgage payment goes to the bank as interest.

Step 4: Keep crossing your fingers that you don't rent to someone who will destroy your property, fail to pay rent, sue you, or cause any other major headaches.

Step 5: After 20 years of doing this, you have now paid off that second house. Yay!

sadly if you try to be a good landlord and make a slim margin, you'll get dumped a huge repair bill/tax increase/other expense and now you're running the appartment at a loss. At that point you either sell it to a company willing to exploit it or you have to be less nice to your tenants and ignore repairs or charge more. Most people choose the first which is why we end up with terrible landlords.

aside: heard someone in that exact situation running low income housing, on a phone call with an expert talking to the government. The expert said "any prudent management would raise the rents the maximum allowed amount"

They have once a year paperwork to do and still bitch and moan and they still call it work.

It's disgusting.

The one "person" I know also drags tenants to court over stupid shit (he always loses 🤣)

I don't understand, is lemmy flooded by reddit kids now?

Comments here make it sound owning a house is free and doesn't cost money to not make it fall apart (houses tend to do so if left unmaintained).

I've rented for 20 years since I left my parents' house and finally bought my house last year, with great expenses and time waste. I'm still wondering today if renting was a better choice financially.

But they’re entitled to the results of my labour!

Why?

Because!!!

They're supposed to do all those things but most don't. I'm a condo super and the owners who own and rent multiple units are the worst. Their tenants are always calling me about every issue, and I have to remind them that I deal with the common areas, not the interior of their unit unless there's a flood. Those landlords tend to own multiple units and just assume I will deal with their issues, but I won't. When you own, you're the super, manager, admin, etc. But most landlords I've encountered just wanna collect the check

The places I've stayed so far pay a company to deal with these issues in place of the owner.

I can't speak on what that costs, however.

They also assume all the risk of the property too. Tenants can leave as they please but landlords are stuck with the property if the market turns.