Renting Out My Current Home And Buying A New Home
We want to begin purchasing investment property. We've been in our (small) first home for a few years which has some equity. I'd like to upgrade to a bigger home and rent out my current home. Any drawbacks?
yes-vacancies, broken toilets, tenants who dont pay, tenents who trash the home, evictions, legal issues, etc...
These are reasons I dont landlord, but someone has to do it. A lease option might be better, because the tenants might have more incentive to take better care of the home, and then you could make a profit on the eventual sale.
Great advice----what about Section 8? Any advice...
i'm kind of in the same boat as you angel face. we've just completed our refi today and we have some equity in our current place right now so we are looking at renting this place out (setion 8 ) and then purchasing another home for ourselves. but also looking into wholesaling and rehabbing some properties also. to get the investment thing in motion.
all the best on your end...
Frank
In our opinion Section 8 is a wonderful product for the investor. As with all ideas there are risks but if you carefully follow the flow you can have a significant portion your investment property paid by the government. Here is the catch! You must find the right property and financing to fit the Section 8 program.
For example: In Illinois the home is inspected and if FUNCTIONAL defects exist repairs are necessary. As a savvy investor you do not have to replace decorative items (non mechanicals) therefore if you find a property which is dated (green counters, pink toilets, etc.) yet the majors (roof, HWH, furnace, windows) are functional the wise investor should obtain the unit at a significant discount, then leverage the Section 8 selection tenant process. We like the Section 8 program because those who violate the "rules" easily jeopardize their Section 8 voucher.
Sit back and do the math, your investment is practically paid for (X years) by the government, while you select the tenant, continue core maintenance, and create a track record for referrals within the Section 8 community.
Good Luck,
Eric & Rosa
[addsig]
My husband & I purchased a legal converted 2 family HUD home in NJ - the sign on the door said 'condemned' and believe me it was. We got a 203K and refurbished the entire inside & lived in it for 4 mos until we had to relocate due to jobs. We rented out our apt to a mother & son who became the RENTERS FROM HELL. - bounced rent cks, no rent cks. We tried to get them evicted but were told that their lease would be up b/4 the eviction court date so just wait it out. The son even proceeded to call my 80 yr old mother in law and threaten her if we did not stop calling him and trying to get the rent. The police - even with taped phone conversations would do nothing to get them out or lock them up. The only thing that kept us from bankruptcy was the second tenant paid their rent on time and we had some $ to cover the mortgage.
The second time we rented it out it was to section 8 - which was great. Met the woman & her 3 children, I had one contact person @ the office who could not say enough nice things about this young mother. She was a great tenant & section 8 pd the majority of the rent which was over $1400 @ that time - she just had to come up with $145.00 ea. month. I would go section 8 again & plan on it. Just make sure you are comfortable with the section 8 personnel you are dealing with,and they understand fully the type of person or family you are looking to rent to. Meet with the family or person and if you don't feel comfortable renting to them, you don't have to.