For those of you who have any doubt about the need to buy right, here’s a little story.
Bought a place last year for $88k that appraised for $117k. It had previously rented for $1300. Put in $15k fixup (because I was a novice and didn’t know how to better save). I did the work myself, so I took all summer to get it done (I have a day job). So, that was 3 months of holding costs gone and the summer renting demand cooled off. Got the place rented in October for $100 over the mortgage - meaning I was going to be negative for the first year. Ok, no biggie, I’m thinking long-term.
Tenants were late with payments several times, (issues with FEMA and wife not being good with budgeting) but paid and paid late fees (extra $ for me, so feel free to be late more…)
Fast forward to this summer… it’s rained just about every day for two months… a leak in the roof leads to an electrical problem in one room. no electricity at all. send out electrician to diagnose/fix and he does - electric back on, one light is out, but should be fine when leak is addressed (can’t be addressed if it rains every day - which it has for two months).
Tenant calls again today - heard a pop, saw smoke, no electricity. and of course, it’s still raining.
Buy right my friends.
I haven’t bought since last year, because I haven’t had time to make the effort to buy right for landlording. I can find places to flip, but not rent. Fortunately my day job makes enough money to keep me from being negative on the rental (although, there isn’t much equity left with the softness of the market.)
SOMEONE PLEASE MOVE THIS TO THE BEGINNERS SECTION!!!
This is great stuff.
I really admire you.
I lot of people don’t like to talk about their mistakes, but I’ve found that people like yourself turn these things into BIG opportunities for themselves by LEARNING how to do things differently next time.
Thanks for sharing your experience, and just think about how much better you’ll do on your next purchase. You went to school on this one, the next one you’ll go to the bank!!!
Sorry, been on the road quite a bit, so couldn’t reply…
phatman, the mortgage payment is about $850 at 7.25% or so… i’m not hurting, but i’m not making money.
buff, I live in Houston, TX. All of June and July = rain.
no worries, houses are going to get cheap - subprime lending runs DEEP into the global economy. it’s not just the mortgage companies that are going to get hurt on this one. there will be more houses for sale and more renters to rent to soon.