I’m thinking about buying either a duplex or some other multi family home and the wife and I living in one part of it and renting out the other unit(s). I did some looking around and I can afford to buy one reasonably nice building and go from there. Just currious if anybody else here has done something similar. I’m interested i this idea, because if I buy a place then rent part of it my living costs will only be a few hundred a month. I know that I will need to setup some kind of corporation or limited liability partnership. So anybody?
The person I think you would want to talk to would be Jammer. From what Ive heard hes pretty savvy with regards to real estate.
Awesome idea if you are handy around the house. An average 2br is around $650? $650 gets eaten up real quick when you have to pay someone to fix shit in your tenants apartment though.
I almost bought a rental property and was glad I didn’t. Some others would disagree with this, but I’m not much into real estate investments yet.
I would personally never buy a duplex and live in one unit and rent the other. The main reason being it’ll still feel like you’re in an apartment, but when there’s any issues your tenant will be knocking at your door at any given hour of the night. Plus I do not want the responsibility.
I’d also hate waiting to find a good tenant. Soooo many scumbags out there that wanna rent for cheap (to me, $650 is pretty damn cheap depending on square footage of the place and amenities) and you’ll spend soooo damn long going through the eviction process if they don’t pay up.
You need to think of location as well. Do NOT forget that your location will often depict the tenants you will encounter. If you get a duplex on say, McClellan in Sch’dy, expect to have Bubb Ruub give you the w000t w00000t all the time.
Ehh i would think it would be more lucrative to buy a vacation house in a climate where it would be rentable year round. You make much more money per week, you can book your self in for your own vacations, and you don’t have to deal with an the every day tenant issues (ie. washing machine, dishwasher…etc). Say you buy a condo or something in florida for 250k. Your most likely going to take out a 30 year loan on this. And youll most likely end up paying around 20k back per year. At 1500 a week you would only need to rent for 20 weeks out of the year to break even on payments and bills for that condo (I left a worst case 10k for electricity/membership dues/repairs). You still would get a “free” vacation home. You should be able to rent around 30-35 weeks/ year fairly easily. Thats an additional 15,000-22,500 income. Obviously this is only good if you can 100% make the financial move, because you can’t bank on getting a certain number of rentals your first year.
Good idea in theory, but I would have to farm out and pay all the repair and upkeep and it isn’t financially feasible for me to do that and buy another house to live in year round up in the north country. I’m thinking about starting out buying 1 place and purchasing a few more down the line if I like it. I am fairly handy around the house and have plenty of friends in the trades.
Most of the points you made are some of the stuff I’ve been thinking about. As far as the still living in an apartment thing thats the main make or break for me and the wife, but it’s more of a means to an end cause we can’t afford to build what we want for atleast another few years. Doing this would atleast benefit us quite a bit more fiancially.
Thats why you should buy rental property in NYC 
I own a building with restaraunt on the bottom and a 1 BR on top. 1 br gets me 1600$ a month lol. And restaurant… lets not even get into that rent
You got any info on the need to setup some kind of corporation or limited liability partnership if you rent one unit out in a two family that is you primary residence?
Just make sure you have a good lease, do all the background checks, 2 months deposit, add clean up clause in the lease. It is always better to have no tenants than bad tenants.
Good luck.
…We all live in the Albany area now, im talking about up here. Im FROM the city… Well just outside the city, White plains, a studio apartment is no cheaper then $900 there… Your also eligable for welfare if you dont make $60k down there where up here $60k is like… awesome .
You get great tax breaks from owner occupied income properties. Lots of incentives.
I have many rentals now…for a reason… …because I started in my early twenties. People end up buying you houses is the bottom line. All the pain in the ass aside… thats the end result. Wouldnt it be nice for other people to have bought you, say, ten houses,and paid for them for you…in 20 years?
Paco will be still paying for his homestead, after possibly years of renting and buying a house for someone else. . Dont be a Paco.
Money in the stock market… could cut 75 percent…one dirty bomb on US soil.
Gold is profitable enough now theat they are opening mines like crazy…but a fair bet.
Inflation will happen, so the mattress isnt an option and 1 percent from a bank aint shit.
It doesnt matter if you overpay for real estate…eventually someone else pay for it in full for you.
I started in a two family.
People that have money and dont invest in real estate astound me.
Big +1 Here. My Uncle started the same way, Now he finances the houses he sells himself. Also never a dime comes out of his money to buy or do anything to these houses.
Also have a couple rentals and it is the way to go
Jammed hit the nail.
Sounds like I’m in a similar situation to what you were. 22 no debt good credit and decent job. I would like to get into this and see where it goes as a potential for additional income down the road. Do have an LLC or corpation setup to insulate you from any legal and financial issues associated with the rental units?
i have a house in NY, and rent a house in VA. Time, money and dedication.
Yes… LLC for the properties is smart… I have several at this point. My feelings are you should be buying a 2-3 family.
I want to do either 3 or 4 family for the return on investment. Figure makes more sense to do that, because I can make more money back faster and reinvest it in other rentals to make more money…repeat cycle…make more money.
My first house was a 2 family and it’s been a great return of investment for me. Cossey and Jammer both made very valid points.
As Cossey said, yes it is still an “apartment living” type of arrangement. With all the pro’s to doing this, comes some cons and that is one of them. At the end of the day you have to look past that and see the other side of the coin.
Jammer also made some really great points too. Actually his whole post was pretty spot on. There are ALOT of renters out there and not as many buyers so considering a rental property as your first purchase of a home is a great investment. The biggest hurdle to overcome is finding the right tenant. Make sure you have enough of your pennies saved to cover a few months of the mortage because it may take you a few months to find the right tenant. Once I had my unit ready to be rented it took me almost 4 months to find someone.
Like a few of the others said, get a rental agreement, deposit and get legit references, like their present employer. If you can too, stay away from people that have pets. This may be hard to do but pets such as dogs and cats destroy shit no matter how obedient they say their animal is and it’s just easier to do with in the event something does get damaged.
I myself don’t do a 1 year contract for tenants. My father has owned a lot of rental property over the years and he always did a month to month agreement and it seemed to work pretty well for him so I went with it as well. Again, it all comes down to preference at the end of the day in my opinion.
Jammer might be able to offer more insight on the LLC but I myself don’t have one. I only own one unit at this point. I would say because you are just starting out and are probably going to own your first one for at least a year or so it probably won’t be necessary to get one. Again, this is just my opinion.