I know that a bunch of people have been burned on spec property in the recent past, but I'm wondering if anyone here has any direct experience with rental condos. There's a huge 55+ complex around here and I'm thinking about buying something.
Your thoughts?
How closely can you supervise tenants? I have a friend that owns three duplexes. He and his family live in one and rent the other side out. He has issues with the other four tennants bcause he travels for his main job and cant keep a close enough eye on the others. The others are only 5 miles away.
He was telling me that he was over at one the other month and the tennants were late on rent. One had a box from a $1000.00 TV sitting out for the trash man. Um, if you cant pay your rent, dont buy a &1000.00 tv. The other is cronically late. He was being a nice guy and wheeled the trash bin to tghe crb for pickup the next day. Picked up some tras from the road side and when he threw it in the bin, he saw a crap load of fast food wrappers. Again, if you cant pay your rent, eat at home . Its cheaper.
He doesnt rely on the rent to pay the mortgages. They are owned free and clear. 
DEBT FREE FOR THE MF WIN!
A vendor/friend of mine from India had a bunch of houses and apartment buildings and loved to rent to "Americans" (as he said it), as they tended to stay 5-10 years in his apartments and he hated to rent to "foreigners" (as he said it) as they only rented for 1 year and left to purchase their own property.
We thought about renting out a home we used to own when it wasn't selling quickly enough. When we did a background check on the first potential tenant, we found out she had been evicted from 14 properties within the last 3 years. (I'm not sure how that's even possible, but she had) We pulled the "For Rent" sign and waited for it so sell. Probably a isolated incident, but that was enough to convince us renting was a bad idea.
If you have a single property to rent and there's a mortgage on it, the chances of success are small. If it goes vacant, you are 100% vacant. There's nothing to help with the mortgage until it's rented again, so it has to come out of your pocket. That hurts. Also, rental properties are generally taxed at 3 times the rate of owner occupied, that can easily be $150 a month all by itself.
If you really want to get into rental on a small scale, look into a mobile home park, i.e. the tenant owns the MH and rents the lot. That can be a pretty good deal for an investor, the tenant has a vested interest in keeping things up since they own the MH. I know one guy who started out with a 15 lot dirt only park, over the years he bought some of the MHs as the tenants needed to move for whatever reason and now he's got a pretty good thing going. But it does take staying on top of it, if you need to keep a regular job then you need to hire a property management company.
I know nothing about rental properties other than listening to a lawyer on the radio. From what it sounds like if you get a bad tenant who refuses to pay or violates the lease, the eviction process can turn into a very expensive and protracted argument involving courts and lawyers. You have to do a credit check and really understand the implication of renting out a property involving and keeping the place "habitable." All the heating, plumbing, roof, pest free etc must be in good working condition or YOU the owner are violating the lease agreement. If you do get a bad tenant you will be consulting lawyers to get them to leave. It sounds like your best bet in a protracted eviction is go to the tenants and reach a settlement for them to leave without thrashing the place, meaning you gotta pay them to not be a thorn in your side. Do research into tenant/owner rights before even considering owning a rental, you have to know what you are getting into and the rights differ by jurisdiction. Maybe I only hear stories from people trying to evict someone but just look into the rules in you state/county before diving it.
I did it for 10 years, and these were my experiences.
Most tenants stayed a year +/-. That left 1-2 months per year empty, and there was ALWAYS work to do when they left. Even the good ones were pigs.
I had a mortgage, but could cary it if need be. I needed to carry it on the empty months, and when the tenants were late. Some were always late, all were late at some point. Several times I had people move in, and back out in a few months as they got a different job/separated/bought a house, etc.. Count on that.
If I were to do it again, I would be a lot tougher on the tenants. We have VERY tenant pro laws here, but if you follow them strictly, it's easy to win as a landlord. KNOW YOUR LOCAL LANDLORD/TENANT LAWS and exploit them . I cannot stress this enough.
At the end of the day, it wasn't a lot of work, and some of the hassle was my fault because I wasn't a big enough prick. In 10 years, I made $50k just on the mortgage side, and used it off my own home. Mission accomplished. I then sold it.
Rental condos have the same issue as condos in general, you can't get financing. Especially if you are renting them.
Condo financing is the first to go and the last to come back.
One of the big issues is the percentage of RENTALS. By renting them you are pretty much signing your own death warrant.
All mortgage financing looks at the usage of the properties in the neighborhood and if the neighborhood starts going down too far or gets too many rentals financing gets tough. The more rentals the more likely the investors have of controlling the HOA and driving down maintenance fees which means deferred maintenance, low escrows for future maintenance and then special assessments to fix the problem. All of those affect IF financing is available and WHAT TERMS financing you can get.
Friends don't let friends buy condos!
For those who were wondering if this rental property was a good thing; I feel bad this family lost their loved one. This guy owned 600+ apartment units in Chicago and hundreds more in Arizona and Tennessee.
Mr. Moran, 67, died of cancer Sunday, Jan. 22, at his oceanfront vacation condo in Panama, his wife said.
Yes, I do believe some people do well with rental property.
http://www.chicagotribune.com/news/local/ct-met-moran-obit-20120229,0,2160358.story
Mobile home parks avoid some of the burden of Tenant Laws because you (the property owner) don't actually own the dwelling. Keep in mind however, that you still have to pay for a community septic system, you have to pay for improvements to the driveway or private road/public-right-of-way, and many mobile home parks struggle with attracting or retaining "good neighbors".
What I'm curious about is the laws regarding property (non-dwelling) background checks and selectivity. If you could be selective with who rents your land it may allow for the development of a nice little neighborhood.
In oil and gas country you could probably do alright, but the land is so expensive that its not cheap to buy in.
I've heard efficiencies (or flats) in big cities can be real money makers and pretty low maintenance. With only outside walls, no carpet, usually single professional types with no kids, and all your tenants in a single building allows for decent control of the property.
I've dreamt of buying an old warehouse in a residential district and turning it into flats. Zoning changes have probably made the building very limited in terms industrial/commercial use, local government would be in favor of zoning it residential due to the neighboring districts, and most developers see it as unattractive, but I know lots of wealthly young professionals would love to live in a flat.
My limited experience, it can work, if you pay cash for the units, and be as selective as possible in your tenants.
The only thing I want to add is that bedbugs have exploded across the USA, and things like apartments and condos are having huge problems. My dad owns a pest control company and has seen several apartment complexes close up because they couldn't get the bed bugs under control, lost the tenants, etc.
Building maintenance issues can be a remarkably ugly problem with condo units.
I'm not talking about the refrigerator in an individual unit of yours, I'm talking about main water supply to the building and such. Things that can give a tenant the legal right to refuse to pay you rent because the units is technically uninhabitable, yet you are unable to fix.
Rental property is nice when it is rented right now We are lucky getting a sunburn from the bedroom ceiling light mattress is so big .
I've been a landlord for about 9 years. I bought the house next door to me after the owner died. I rented to a friend, which people say never to do. The only hiccup is now I want to raise the rent. Oh well, we'll see.
It was kind of an experiment really, and I wanted some control of my neighborhood as its sort of "transitional". The wisest words I have ever heard about renting is you need to match the tenant to the property. Many people today are less affluent then their parents were. When their parents were their age, they had good jobs and kids and a house in the suburbs. Everythng magically worked and never broke. Now they live on their own and expect the landlord to step in the shoes of their parents and can't even change a lightbulb.
Avoid these types of people.
Karl La Follette wrote:Rental property is nice when it is rented right now We are lucky getting a sunburn from the bedroom ceiling light mattress is so big .
Does anybody have any idea what this means?
When you stuff your mattress with cash it gets so full that your belly gets burned by the light in the ceiling above your bed Paulie Gualtieri
Zomby woof wrote:I wasn't a big enough prick.
Man. You gotta quit leaving straight lines hanging out there. 
Hanging is right...
Karl, take some of that money, and buy yourself a period.
Thanks ! We just got a rollover last night so i will take some of that and buy one . 
Zomby woof wrote:Hanging is right...
Karl, take some of that money, and buy yourself a period.
You'd loan him yours, but you're on it, right?
Whenever I'm in the mood for a good brain teaser, I look at one of Karl's posts. He never disappoints.
Please call somebody in your family and pick on them
