Out-Of-State Landlords
Hi Boys & Girls,
Finally, my first 'deal' is cooking, however it's in another state. (The numbers were too good to pass up)
As of this moment I believe I'll hang onto it for a while and collect rent. But, having never been a landlord what can I expect or is that an ambiguous question?
I know some of you have ton's of experience in 'other state' dealings, I need a little insight if possible.
Thanks,
Mike
i would not recommend handling out of st. rental prop. youself it can be a nightmare. i would only consider it if i could find a "excellent" rental management firm. one with "teeth" in dealing with renters.....kenmax
How will you handle vacancies?
Leaky faucets?
Tenants that don't pay on time...or at all?
plumbing emergencies?
Turning over a unit in between tenants?
You may use a management company, a good handyman to do all of these things, or train someone near by.
The numbers are only good if it's managed propertly.
Thanks for the quick responses guys...
Is there a 'rule-of-thumb' cost for this service or is it a negotiate your best deal sort of thing?
Fortunately, I have family in the area who's trustworthy, responsible and owns a rehab business. He's agreed to act as 'contact / fix-it' person for those emergency situations that arise.
However, the remaining responsibilities 'are on me'
All things considered, I suppose I shouldn't be too anxious about it.
Does anyone have experience owning vacation (short-term) rental properties in Orlando, FL?
Remote management can work. Look for agents who only do management as opposed to those who do it as a sideline to their main business.
Definitely check the rules as many states require the person managing property to be licensed.
Expect something over 8% and under 15% depending on the type, location, and amount of the monthly payment. As you go down on the monthly you might see charges for finding a tenant or advertising.
Your maintenance might be higher as the management company wants a happy tenant and might use a higher cost solution then you would like. That said they might be right and you just underestimating the cost of being in the property business. Having your own handyman can be a bonus.
Expect to visit about once a year just to get a read on the area and check in with the property manager. Maybe not really required but...There are some tax advantages possible as this is a business expense in most cases.
The lender will commonly only consider 75% of the rental income available to service the debt. Put another way they as using a gross assumption that you need 25% for maintenance and management. Taxes and insurance might be assumed in the 75% and it might not.
I think with vacancies and other things you can see as much as 40% of the gross income going back out in running costs other then the mortgage. If the deal is still good with that assumption then you are likely safe (unless you have an emergency problem that is large). The trick is to then manage down the 40% figure as it should not normally be that high.
John
[addsig]
Hi boys and girls?
Bad intro! I suspect that you are off to a bad start in REI just as your intro was a bad start to getting good advice. If you want to do well in REI, be humble(you certainly will be humbled as everyone is in this in this business) and start out in an area you know or can learn intimately. No matter how many books you read or questions you ask you will make mistakes. If you are really serious about REI though, you will probably do well after the first year.
Best of luck
Good Morning All...
I offer my sincere apologies to all who were offended by my lack of appropriate etiquet regarding the intro to my recent post.
davmille's discernment, admonition and rapid execution of judgement regarding my 'bad start' in the REI arena are clearly the example of the 'humble' attitude I'll be searching for from now on.
MDH[ Edited by MDHolderfield on Date 06/04/2004 ]