Do you rent or own?

[Phillip V]

Everyone wants to do that these days though, there`s a bunch of TV shows about it. I don't think jumping on that train now is as easy as it was a decade or more ago.

It's never been easy, but it is one of the few ways I know that a middle class American can develop a sizable second income stream. The big problems with it are even buying seriously run down houses requires some capital outlay/financing (with its own potential disasters for personal finances), and it is extremely high in risk it's significantly riskier than playing the futures market or buying individual shares of companies (both of which are fairly high risk), and to have any chance at all to grow it successfully organically requires significant labor expenditure early on.

Do you use property management software for tracking, rent calculation, etc?

[Richard Hakluyt]

I own one outright and have a small mortgage on the other. We bought the second one shortly before the crash on a tracker mortgage, shortly afterwards the Bank of England reduced base rates to 0.5% so we only pay 1.39% interest on the outstanding loan 

[The Brain]

I live in a van down by the river.

A loner!

[The Brain]

Own, with mortgage.

[Duque de Bragança]

Buying a square meter of appartment in the city I live roughly costs the national monthly median household income. That's like spending about 9% of the monthly median household income per square feet. How does that compare to other places?

Cheaper than Paris or London. 

[Valdemar]

Own, with morgage.

Buying my first house was one of the smartest things I've ever done.

Same on both. Buying slightly before the bubble began expanding means house close to double value,even now.

V

[Brazen]

Own with mortgage. I got my first mortgage 24. The team I work with are 22-30 and they all rent, mostly in shared houses. Hell, they're all still paying off their student loans. I'm constantly glad I was young in the right era.

[CountDeMoney]

Own my house full and clear and have tenants in 12 rental properties. 

Incidentally if you're ever thinking about developing a second income stream renting a place out is something even middle class people can sort of work their way into over time...I had the good fortune of getting my house paid off at a young age and having a wife who makes more money than we can spend and I have the task of finding ways to put it to work, which put me in the position of being able to secure financing to pursue more capital intense property ventures...but I know people who are making in the high six figures to low seven figures per annum. off of truly run down shit hole houses they bought at bargain basement prices and brought marginally up to code and rented out to low income people. They slowly made more purchases with the income from the first and some of them have built up 50+ property businesses that way.

Everyone wants to do that these days though, there`s a bunch of TV shows about it. I don't think jumping on that train now is as easy as it was a decade or more ago.

Depends on where;  I doubt Otto would have the same level of success in east Baltimore as he does in Frednecksburg.

[DontSayBanana]

HHS option while I'm working on school this semester, then looking to rent.

[OttoVonBismarck]

Depends on where;  I doubt Otto would have the same level of success in east Baltimore as he does in Frednecksburg.

Depends...what are the gun laws in Baltimore? 

Although I've never done it, you can actually make pretty solid money off of poor people if you rent to Section 8 people; you receive your rent payments from HUD, are insulated from the vagaries of poor person finances, and because HUD actually helps place people into homes you essentially have free marketing/tenant searching.

And Fredericksburg is hardly red neck these days, it's been converted into endless strip mall city each one filled with Starbucks and "ironically named" establishments like Carlos O'Kelly's Mexican restaurant (kid you not.) Even our Wegman's has put on airs lately...

In a few more years I'd like to move to Gordonsville to get away from the cluster fuck that this place has become.

[OttoVonBismarck]

Do you use property management software for tracking, rent calculation, etc?

No, I spent 4 hours one evening setting up an Access Database w/a few simple forms. I think most custom-software for this business is basically targeted to the computer illiterate.

I should actually probably mention that I've never actually turned a profit off of the property. We bought it with a 5 year loan so the monthly payments are actually extremely high, so we've lost money every year. We basically knew this would be the case before hand, and saw it as a good investment because (hopefully) once the loan is paid off it will turn a nice monthly income and the money we're paying in now is basically just investing in a big asset in more manageable monthly payments since we obviously didn't have the upfront capital to buy it outright.

The rent is basically nice because it helps pay for a portion of the investment but until the loan is paid off it's essentially mathematically/economically impossible to turn a profit at the property. I will say given our historical vacancy rate we'd be making a very nice annual yield vs. the value of the property if we weren't making the mortgage payment. (People tend to charge 0.8% to 1.2% of the property's value in monthly rent, with the rule of thumb in most places being 1% gives you a profit and covers the incidental expenses such as repairs, tenant abandonment and etc, while 0.8% you can make a profit as long as nothing bad happens...)

[Warspite]

I used to work for a very old man (a good friend's step father) who was not very mobile, virtually deaf, had glasses as powerful as interstellar telescopes, and was a diagnosed aspergic who could not chew his own food. Oh, and he was a German Jew who had escaped in 1939 with nothing more than two guineas in his pocket, moved to London, and then served in British military intelligence during the war.

He was a professional land lord for about forty houses in south London and while I was studying my MA for some extra cash, I helped with his accounts . And his letters to tenants. And generally putting into order and electronic form a bizarre system of hand-written scribbles (one eviction notice was virtually drafted on some kitchen roll). From the letters I typed up for him, he seemed to be permanently at war with his tenants, most of whom were poor and DSS (people on housing benefit).

In one memorable incident, the phone rang during a meeting by his desk. The phone was terribly loud because he was deaf (and thanks to the volume of that ringer, I am now too in the right ear). His response can only be described that he slammed the phone up; he listened for a brief moment, before shouting - extremely loudly - FUCK OFF! and then slamming the phone back down.

My eyebrow had barely managed to raise before he very loudly pronounced, "FUCKING SENEGALESE".

This may not have much to do with renting or owning, but it's an anecdote I thought I would share none the less.

[OttoVonBismarck]

Renting to someone in a big city is honestly a different world. You have tons of immigrants legitimate and illegitimate, tons of regulations, extremely powerful tenant boards and tenant rights and things of that nature. I'm sure probably the richest land lords who rent residential properties operate in big cities like New York and London, but I also know that the environment in those big cities is probably conducive to driving you insane. NYC especially has almost excessive tenant rights and it's my understanding it can be very difficult to legally evict a tenant.

Luckily Virginia isn't like that, as long as you play 100% by the rules the longest possible time it could take to get someone out of a property is 50 days. That's in the worst case scenario where you have to have the sheriff formally serve the eviction papers on "removal day" and have the tenant's property remove from the premises. (Obviously the popo just watches this to make sure trouble doesn't break out, they don't help move furniture.)

Communities like Fredericksburg are totally different. You can get a decent townhouse for around $1500/mo in rent here, whereas very close to DC at all it gets crazy. In say, Fairfax you'll pay $1500/mo for a 1-Bedroom apartment on the 4th floor of a big complex. So a lot of the people moving to Fredericksburg are basically younger professionals who have graduated college and gotten a job working in DC or the metro area and are wanting to live in a decent residence without having to fork over 50% of their monthly take home pay in rent. The people I rent to are almost all government employees or in government related industries, mostly professionals like engineers and accountants, and mostly age 25-32 or so. These people aren't your average tenants in a hell hole like Baltimore or even a lot of the shittier cities in Virginia. Fredericksburg is also not a bad place to locate because it gives you a little flexibility. If you're willing to commute to DC already, then if you live in Fredericksburg it isn't unreasonable to also look at job opportunities in Richmond which isn't much farther than DC, as well as smaller cities in Virginia which also have jobs for certain people.

[Zanza]

As far as I can tell, the best tenant demographic are foreign students. They are often willing to pay above-market rates as they don't know better, leave again by themselves after 6 to 12 months, and you can rent out places that are badly maintained and would need renovation for a proper local tenant.

[AnchorClanker]

Own w/mortgage since Nov 2004.  It made financial sense in the Augusta area - renting here is dumb when property is so cheap.