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while 10 properties are riskier loan wise they are actually safer. if you own one and you get a bad tenant you have a 100% default rate.
its not even a question of getting one, oh eventually you will. its a question of when and how long and expensive it is to get them out.
Its not that bad. Worst a tenant has ever cost me was $6k in damage, but I had $1250 deposit and my lawyer helped get all but $1k back later. Worst part was having to fix the damage and the month it kept it off the market.
Sure there are horror stories when it comes to tenants, but they are generally not common and once you get past being upset about it, you realize you really aren't losing that much if you have an amortizing loan. In the 2 years I had that tenant they paid off $9000 of my loan balance before they became problems at the end. I got them evicted in less than 2 weeks, most eviction issues come from bad landlords following bad plans.
I really love the myths though about how terrible it is to be a landlord. It keeps the competition down. I never get 3am phone calls, I wouldn't answer them anyways. I tell tenants I'll get someone out there in a day or two when there is a problem. I carry good insurance (duh, I'm an agent) that covers most "disasters" that could happen like flooding from a backup or busted pipe. Landlording quite frankly is far from work. I have buddies who have a property manager for portfolios of 40 properties and the guy is out playing golf half the time. Its just not anything as hard as some want to make you believe it is. The only way its hard is if you think equity gains are going to happen on some sort of schedule.
our worst was 4 months no rent with an eviction in nyc ,8k in damages ,legal fees and another months rent lost until the next tenant could move in.. the tenant had no money left and would have declared bankruptsey if i went after her.
this was a co-op apartment not even a house... on the other hand a forum member "ok dorothy" had real trouble with a ton of damage to her rental by tenants she evicted. she posted the photos and it was just awful.
she filed charges but im not sure if anything came out it.
for most amateurs who dabble in rentals they are undercapitalized and basically need the rent to cover the nut.
the stress to them is a killer and something they never planned on until it happens. a shrewed tenant can delay an eviction for months. we had an eviction once that had to be done in a tax lien sale we got in new jersey that took a year. for me the aggrevation alone when things go wrong is a reason ill never be a landlord through retirement. i dont consider being a landlord passive income.
Last edited by mathjak107; 08-18-2011 at 02:22 AM..
I'm waaaay past the aggravation factor. Especially these days when everyone has financial problems and not much respect for anything. 40 years ago, everyone was great. Honestly. No thanks. No more. Not now. Only for the very young.
I no longer work the real estate market, sold off all my properties 2002-2004.
The rental market has always been a tough market, lots of grief. The worst mess I had was in a property in Georgia, it was a nice little townhouse, it is a very long story which I will not bore you with, suffice to say, the sheriff came through the front door with a battering ram, big drug bust. It is amazing how a steel door can bend, the remains looked like a cup! The rest of the place was basically destroyed.
Today, I have two mobilehomes here in Florida (inherited), I only rent them to snowbirds, have no issues, repeat birdies every year. I still want to unload them, I am done with rentals. I am done with flipping, I am done with building...stick a fork in me, I am done! In the past building and flipping was very lucrative and some good money could be made. Today, I am not interested, the ROI is just not there and the problems just aren't worth my time and effort.
Its not that bad. Worst a tenant has ever cost me was $6k in damage, but I had $1250 deposit and my lawyer helped get all but $1k back later. Worst part was having to fix the damage and the month it kept it off the market.
Sure there are horror stories when it comes to tenants, but they are generally not common and once you get past being upset about it, you realize you really aren't losing that much if you have an amortizing loan. In the 2 years I had that tenant they paid off $9000 of my loan balance before they became problems at the end. I got them evicted in less than 2 weeks, most eviction issues come from bad landlords following bad plans.
I really love the myths though about how terrible it is to be a landlord. It keeps the competition down. I never get 3am phone calls, I wouldn't answer them anyways. I tell tenants I'll get someone out there in a day or two when there is a problem. I carry good insurance (duh, I'm an agent) that covers most "disasters" that could happen like flooding from a backup or busted pipe. Landlording quite frankly is far from work. I have buddies who have a property manager for portfolios of 40 properties and the guy is out playing golf half the time. Its just not anything as hard as some want to make you believe it is. The only way its hard is if you think equity gains are going to happen on some sort of schedule.
Probably real estate in the long run, to be honest - because it will hold up much better under the major inflation that is soon to come.
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