There is a guy I know who recently bought 5 houses in minority neighborhoods to convert into section 8 housing and rent out. With the rental rates being what they are for section 8 housing and the cratered home values in minority neighborhoods, you can get a good return doing that.
So I decided to look into doing the same thing, and visited some home for sales in less tony areas, and came back a bit depressed. These neighborhoods are rife with empty houses, and checking the tax records, some of them have been owned by the bank for 6 months. It seems the bank hasn't done anything other than put up a sign on them to keep out. In some cases the doors weren't even locked. The asking price for the homes was typically a third of what the assessed value for tax was last year. There were streets where half the homes were either for sale or for rent.
These were always working class neighborhoods. I'm sure that almost everyone in them is upside down at this point. I would guess that many have a negative net worth. It is too bad. I probably wouldn't be helping them by moving in section 8 housing.
At first I was thinking of buying condos, but after seeing what I saw, I can only imagine that most associations are in rather difficult situations at this point.
Where do you live?
Quote from: alfred russel on April 10, 2009, 02:38:16 PM
There is a guy I know who recently bought 5 houses in minority neighborhoods to convert into section 8 housing and rent out. With the rental rates being what they are for section 8 housing and the cratered home values in minority neighborhoods, you can get a good return doing that.
Way too much drama and bullshit involved in renting out property to low income tenants in my opinion. And that's in the best of times, not in a severe recession like we have now.
Timmy hates poor people.
Quote from: Caliga on April 10, 2009, 02:40:28 PM
Where do you live?
I'm trying to stay anonymous. :p But Illinois.
Quote from: jimmy olsen on April 10, 2009, 02:40:54 PM
Quote from: alfred russel on April 10, 2009, 02:38:16 PM
There is a guy I know who recently bought 5 houses in minority neighborhoods to convert into section 8 housing and rent out. With the rental rates being what they are for section 8 housing and the cratered home values in minority neighborhoods, you can get a good return doing that.
Way too much drama and bullshit involved in renting out property to low income tenants in my opinion. And that's in the best of times, not in a severe recession like we have now.
Hence the concept of section 8--you don't have the same concerns about getting paid, and there are brokers/social service workers to find you renters.
But after visiting a few places, I don't think it is something I want to be involved in.
Section 8 is what we have done with our two rental properties in San Antonio.
Nothing too bad about it, but can understand al's non enthusiasm :P
In Rochester it's a very rough time renting to poor people. They tend to totally trash a place while staying the six months or so it takes the landlords to realize what is happening. The repair/clean-up bill outweighs most of the gain.
And have I mentioned how much I hate DHS for subsidizing heat/energy bills?!? The poor people run their heaters flat-out all winter (90+) and keep windows open so it doesn't get too hot. The government would save millions if they put some sort of governor on the heat controls (say keep it at 65-68).
My dad's mother runs about 8 rental units in PA, and she swears her Section 8 people are the least problem, since the state ensures she gets paid regardless. However, she also does pretty damn extensive background checks before signing a lease.
A good friend of mine has gotten into Section 8 rentals, and has done pretty well (and hopes to do better once the market comes back) but notes that his six units (for which he paid cash) are pretty much a full-time job for him. He wouldn't do it if he had to pay to have maintenance and repairs done. There are a lot of maintenance and repair calls, especially for blocked toilets/drains. :pinchL
Quote from: grumbler on April 10, 2009, 03:53:46 PM
There are a lot of maintenance and repair calls, especially for blocked toilets/drains. :pinchL
Yeah, that'd be the deal-killer for me. Espec. when you're called out to fix a problem that was caused by tenants' stupidity or carelessness.
Quote from: derspiess on April 10, 2009, 04:16:27 PM
Yeah, that'd be the deal-killer for me. Espec. when you're called out to fix a problem that was caused by tenants' stupidity or carelessness.
There you have it. My friend is almost always called out for blocked toilets, along the lines of "I don't know why Latrisha decided to flush her doll's head down the toilet, and we couldn't
not use it while we waited for you to unblock the pipes. Sorry about the mess. How long will it take you to fix the drywall downstairs?"
Quote from: grumbler on April 10, 2009, 03:53:46 PM
A good friend of mine has gotten into Section 8 rentals, and has done pretty well (and hopes to do better once the market comes back) but notes that his six units (for which he paid cash) are pretty much a full-time job for him. He wouldn't do it if he had to pay to have maintenance and repairs done. There are a lot of maintenance and repair calls, especially for blocked toilets/drains. :pinchL
I don't have the time for housecalls, and my wife or daughter sure won't fix any blocked toilets or drains. We would be paying people to fix things for us.
It seems to be that we can make some money on the rentals (at least that is what excel says), but the real profits would be if the market comes back in a couple of years. I'm torn between thinking it just isn't worth the effort, and thinking it would be great experience to put my daughter in nominal charge of operating the properties (obviously she would be supervised) rather than having her get a job making smoothies.
That boat came and went some time back
Quote from: Tyr on April 10, 2009, 08:13:43 PM
That boat came and went some time back
What boat?
Quote from: alfred russel on April 10, 2009, 08:16:29 PM
Quote from: Tyr on April 10, 2009, 08:13:43 PM
That boat came and went some time back
What boat?
Rentals.
It was all the rage some years ago as it was a good way to make money but then any idiot with a bit of money decided it was a way to quick riches and...it sort of stopped being so profitable. For some reason.
Thats probally just the UK though of course. Different abroad.
Quote from: Tyr on April 10, 2009, 08:19:57 PM
Quote from: alfred russel on April 10, 2009, 08:16:29 PM
Quote from: Tyr on April 10, 2009, 08:13:43 PM
That boat came and went some time back
What boat?
Rentals.
It was all the rage some years ago as it was a good way to make money but then any idiot with a bit of money decided it was a way to quick riches and...it sort of stopped being so profitable. For some reason.
Thats probally just the UK though of course. Different abroad.
I don't know if it was ever the rage here, but as home prices go up, renting becomes a lot less attractive.
Where about in Illinois? Not to expose you are anything, from Rockford here. :bowler:
Quote from: Alcibiades on April 10, 2009, 08:30:23 PM
Where about in Illinois? Not to expose you are anything, from Rockford here. :bowler:
I'm in Chicago.
Al, i'll be forever in your debt if you kick queepeeg or what ever name Spellus is going by now in the cajones. :hug:
Quote from: katmai on April 10, 2009, 08:37:36 PM
Al, i'll be forever in your debt if you kick queepeeg or what ever name Spellus is going by now in the cajones. :hug:
I didn't know who queepeeg was. What a terrible name.
So what are your thoughts on renting the homes in San Antonio? I guess it isn't too much trouble if you don't live there. Are these single family homes you are renting?
Quote from: alfred russel on April 10, 2009, 08:46:20 PM
Quote from: katmai on April 10, 2009, 08:37:36 PM
Al, i'll be forever in your debt if you kick queepeeg or what ever name Spellus is going by now in the cajones. :hug:
I didn't know who queepeeg was. What a terrible name.
So what are your thoughts on renting the homes in San Antonio? I guess it isn't too much trouble if you don't live there. Are these single family homes you are renting?
One is a 4plex, the other is a single family 4 brd home.
If my dad's girlfriend wasn't living in the 4plex so she can keep and eye on it for us, i'd be pushing to use a rental company and pay their 10% of rent fee as it's worth it to deal with those plumbing issues and other things of such a case.
We had such a company taking care of old property in Washington St, dismissed them for brief bit when a cousin of mine wanted to try and take care of the place, all i can say is :bleeding:
Went back to rental company till we sold the place.
Soooo....I'd get a Languish Discount™ on a rental house in SA, right? And someone here will take care of all my needs, maintenance wise, yes? :shifty:
I rent a house to Air force people, and they don't cause much problems. Military folk are good people. That and I can tattle on them if they act up.
Quote from: alfred russel on April 10, 2009, 08:46:20 PM
Quote from: katmai on April 10, 2009, 08:37:36 PM
Al, i'll be forever in your debt if you kick queepeeg or what ever name Spellus is going by now in the cajones. :hug:
I didn't know who queepeeg was. What a terrible name.
Quee
que
g. As in the cannibal harpooner. I was Psellus.
Did you go to Kellogg or Booth? Always figured you for a New Yorker, like Joan-Minsky.
Deep Dish pizza sucks.
There.
Quote from: Ed Anger on April 11, 2009, 01:57:40 PM
Deep Dish pizza sucks.
There.
Depends on who makes it.
Quote from: Ed Anger on April 11, 2009, 02:01:34 PM
Stop interfering in my trolls.
That boat came and went some time back
Quote from: Ed Anger on April 11, 2009, 02:25:37 PM
Timmay should be keelhauled.
That would be a better list than an enemies list.
Quote from: Queequeg on April 11, 2009, 01:33:20 PM
Quote from: alfred russel on April 10, 2009, 08:46:20 PM
Quote from: katmai on April 10, 2009, 08:37:36 PM
Al, i'll be forever in your debt if you kick queepeeg or what ever name Spellus is going by now in the cajones. :hug:
I didn't know who queepeeg was. What a terrible name.
Queequeg. As in the cannibal harpooner. I was Psellus.
Did you go to Kellogg or Booth? Always figured you for a New Yorker, like Joan-Minsky.
I did live in NY, but did not go to Kellogg or Booth.