I am curious if you would lend me some advice. I currently own a rental home in the Houston, Tx area, but I now live in Fargo, ND. I have very good tenants who’s year lease is about up. They want to move to month to month, but promise to give a couple months notice.
I am thinking of offering the house for sale in the investors community, as a investment with zero downtime, since there are good tenants in the home. It is in a very nice area “Greatwood” community in Sugar Land. The only reason I am considering selling is because from Fargo I would have a harder time managing the home and prepping it for the next rental.
After reading some of the lit, I have thought about the possibility of offering is as a rent to buy home when these tenants leave. My only issue is that I have worked very hard in the last 7 years to bring my credit up to the high 700’s and I am a little worried about keeping the home on my credit report, and having to make payments while the home is between tenants.
Do you have any advice?
Also - Does anyone have any information or connections in Fargo? I would like to start researching the market here.
Is it a good idea to get a good list of buyers (rent to owners) before even looking for homes?
They have internet access in Fargo? Just kidding. On a serious note selling and moving your investment money to your new home town is definitely the best way to go in my opinion. I don’t see for the life of me why people insist on owning assets that they can’t personally manage…maybe I am too hands on, maybe I’m the crazy one.
Ditto Rich & Mike . . . if I can’t touch and smell my properties whenever I like without having to hop a plane or drive for hours, I don’t want it.
My experience with ‘rent to own’ has not been good. I’ve generally gotten the dregs of tenants who skip out and leave you high and dry. Granted, you have the excess funds over what the general rental market will bear, but oftentimes that is insufficient compensation.
I would sell in Texas and buy local . . . if you can sit on the cash for short period, we’ll be seeing more distressed seller inventory coming online which should offer some good opportunities to buy.
I am also a big proponent of tangible assets. However I don’t think personally managing or “smelling” the property is always necessary. It’s does wonders for one’s ego thinking they are the most capable and competent in every facet of their business. But semi-trusting people to do the dirty work can suffice just as well. I currently own several properties that I’ve never seen in person, only pictures and descriptions via email or phone. They have been found, evaluated, bought, rehabbed, and now are awaiting their sale and I’ve never seen them. No point in creating a team if you don’t let people do their job.
Your mental dexterity suffers when you try to do 10 different jobs at once. REI is about orchestrating every real estate profession and accomplishing the investors goals along with the team members sub-goals. There is no 1 person who is the best lawyer, accountant, general contractor, real estate agent, home inspector, appraiser, property manager, surveyor, and sub-contractor at the same time. Your efficiency will be lost trying to do everything and be everywhere. The cost of communication is so cheap that I think not utilizing specialists and trusting their opinion is a hinderance to a company’s performance.
I’m with Danny. I try not to breath when I’m in some of my low income “luxury” units, let alone intentionally smelling them!!! However, I do agree with you in that I also would not operate more than a few miles from home.
Danny is on a different level than I am. I HATE having employees. I would like to be able to manage people, but I can’t. A decade ago, I owned a business with 50 employees. It was a nightmare! I am simply not suited to paying people who are generally incompetent (and many of these were professionals). I don’t deal well with lazy, complainers, drunks, etc - especially if I am paying them! I like to hustle and most employees are simply incapable of that.
Don’t get me wrong. I believe that it is a gift to be able to manage people. The problem is that I simply don’t have that gift.