o ya... with interest rates sooooo low, i think many multi-unit apartment complexes have higher than usual vacancies.

That is the beauty of Sec 8.... there will never be more houses than tenants.....

 

Scot,

If you don

 

Harrisburg, PA................. lots of boarded up slums..... yuck..... but lots of "ok" bank repo's at $15k-$20k... if you are handy.

My best place was $10k...$10k of fixing (which I got ripped off but...).... $20k invested... house is in a decent (not great, but decent) part of town.... $645 for rent (which is about $50 more than non-section 8). So I get $645/mo for a $20k investment....

Another one was $22k with no real work needed (minor painting..had nice hardwood floors, etc..).... nice part of town... $645 / month....

Worst place..... $8k....then ripped for about $20k to fix it (this is while we were still new at this shit).... and in addition to that....we have replaced the furnace, water heater, roof, etc...... so this one house has probably cost us $ instead of make $.

 

I second the concern that, with interest rates so low, the rental market is not great. Make sure you pick your location carefully. There will always be college students, but that young couple that is going to stay a few years and take care of the house, can probably afford to BUY a house right now.

However, interest rates may be on the rise which means that 1) the rental market will probably get better in the future, but 2) people are really trying hard to buy now before they go too high.

And yes, it is alot more work and hassle than collecting rent..

KS

 

Hey Scot have you ever considered having a property manager? Or allow another group do all the work for you? They will obviously require payment, maybe something like 10% of what you bring in a month with the place. But they handle everything and you don't have to worry about it.
Was this ever an option for you? I imagine if I start to have 4+ units it will be too much to handle on my own when I still have my full time job.

 

I spent about 5 minutes working out what a property management company would charge.... it is about 6-7%. On top of that, they usually don't make the best decisions for you.....they probably either act like slum lords too much, or spend all of your $.

I am very very friendly towards my tenants... i give the kids $10 gift cards for x-mas (30+ kids), i offer $25 gift cards for any student who gets all A's and B's on their report card...... I joke around with all of them, etc.........I treat them like humans.... Most of the time I get comments that I am the coolest landlord they have had....

You don't get anywhere being a hardnose dick to people, so I do the opposite. Once in a while I do get pissed and write a not so nice letter, but overall it works pretty well.......

It does seem like when it rains it pours though..... 1 house needs this and that, then another needs goofy things, etc..... then the HULK runs wild.

 

So do you have any problems with chronic late payments. I know with section 8 the government probably pays you on time. But what about those who are not on section 8? What do you do with those people? Have you had to evict anyone in the past?

p.s. Thanks for all of your help. I'm about 1/3rd into "property management for dummies" so far. I think I'm going to give this a try.

 

I do have one idiot who apparently lost her job and did not tell me..... she has been normally paying by about the 20th of the month...... she has not however paid for August yet.... so i put a little letter together that gives her some deadlines..... at the end, basically it says if you cannot live up to these deadlines (pay me for Aug by Friday Sept 5th and September by Sept 19th), then she will have to find somewhere else to live.....

Eviction - yes once...but the lady was Section 8 and got sent to jail... it worked out in my favor.. i used her security deposit to pay the eviction fees.... Section 8 paid her rent while she was in jail... i won the eviction 1 month before the end of her lease...... her sister moved everything out and I had enough time to get the house rented without losing a dime.

I am sure that does not happen that way very often. I did have a tenant leave Section 8, and owed me some back $ for water... so they left the house a dump.... all of their trash they just threw in the back yard and left.... I had to clean it myself.... and I would have had to put a "judgement" against them to even try to get the $ for the water and cleaning......blaaaa

 

Just for fun... I just took the average of my Section 8 properties (2 of them are very modern and are more like townhouses in a town called Steelton)...i paid $39k and $32k for them.

Anyway.....assuming they were paid off... and you had 20 "average" Section 8 properties....

Average income $600 mo x 12months x 20units = $144,000 annually

Average utilities 70 mo x 12 months x 20 units = 16,800 annually
Average maint 85 mo x 12 months x 20 units = 20,000 annually
Average prop taxes 100 mo x 12 months x 20 units = 24,000 annually (expensive for crap houses)
Average insurance 20 mo x 12 months x 20 units = 4,800 annually

So that is $144k gross and $78k net

Not a bad living......That includes $20k per year of maintenance....that number could be reduced with the landlord actually doing some of the work.

Not that every Section 8 tenant is a lifelong tenant, but if you provide a "better than average" house, the tenant is more than likely to stay for 2-3+ years than a typical tenant.

 

[QUOTE]Originally posted by Scot
[B]Just for fun... I just took the average of my Section 8 properties (2 of them are very modern and are more like townhouses in a town called Steelton)...i paid $39k and $32k for them.

Anyway.....assuming they were paid off... and you had 20 "average" Section 8 properties....

Average income