Real estate investing / passive income source
#1
Safety Car
Thread Starter
Real estate investing / passive income source
Anyone buy up houses/condos and rent them out for the passive income?
I just saw a quote the other day, Buffett IIRC, that said something like you're not making real money until you can make money while you're sleeping.
While I personally have a great day time job, I'm now looking into the potential for investing in real estate for a passive income stream. I'm not into house flipping but I know ppl do that as well but that is probably not for me personally.
Stumbled upon a strategy of buying one property a year for 10 years and then as your passive income gets bigger with each new property, you can snowball it to pay off the loan on the earlier properties faster and faster and after 10+ years you're really set for great monthly income stream. (link to strat here: https://www.whitecoatinvestor.com/bu...-retire-early/)
Anyone here own several condos/houses/apartment units and rent them out for a steady month to month revenue? I've never actually owned a home/condo before, just been renting, and so any advice/tips/tricks are welcome!
I just saw a quote the other day, Buffett IIRC, that said something like you're not making real money until you can make money while you're sleeping.
While I personally have a great day time job, I'm now looking into the potential for investing in real estate for a passive income stream. I'm not into house flipping but I know ppl do that as well but that is probably not for me personally.
Stumbled upon a strategy of buying one property a year for 10 years and then as your passive income gets bigger with each new property, you can snowball it to pay off the loan on the earlier properties faster and faster and after 10+ years you're really set for great monthly income stream. (link to strat here: https://www.whitecoatinvestor.com/bu...-retire-early/)
Anyone here own several condos/houses/apartment units and rent them out for a steady month to month revenue? I've never actually owned a home/condo before, just been renting, and so any advice/tips/tricks are welcome!
#3
3.5 psi
iTrader: (1)
We're in the process of looking for a rental house. Our financing is all done and we're just waiting on the right house. My brother has had a rental for about 2 years and it's going great. One plumbing call but that's about it.
i think it really depends on the area you're in and what the housing market is like where you are. Where I live you can still nab houses for a reasonable price. My city is attracting more and more Toronto residents who are priced out or don't want to pay 1.5 million for a house. We're getting great year to year value increases. The rental market is also strong in my city. My plan is to keep it for ten years, do any necessary renos and sell it. I think I could pay my house off after that and be mortgage free at 45.
If you're renting now, the best way to get into the market is to find a house with a basement apartment you could rent out. Then once you get on your feet a bit more, you buy another house for yourself and rent the other part of the first house.
i think it really depends on the area you're in and what the housing market is like where you are. Where I live you can still nab houses for a reasonable price. My city is attracting more and more Toronto residents who are priced out or don't want to pay 1.5 million for a house. We're getting great year to year value increases. The rental market is also strong in my city. My plan is to keep it for ten years, do any necessary renos and sell it. I think I could pay my house off after that and be mortgage free at 45.
If you're renting now, the best way to get into the market is to find a house with a basement apartment you could rent out. Then once you get on your feet a bit more, you buy another house for yourself and rent the other part of the first house.
The following users liked this post:
nist7 (01-10-2018)
#4
Safety Car
Thread Starter
Though I met a guy on that blog that will be in my city soon and apparently he manages over half a dozen properties, himself, and claims doesn't spend more than 25 hours a YEAR doing it. He has multiple condos in Hawaii apparently.
He's invited me for an informal meetup/discussion so I'll see what his secret is. Apparently he doesn't do single family homes and just do condos.
We're in the process of looking for a rental house. Our financing is all done and we're just waiting on the right house. My brother has had a rental for about 2 years and it's going great. One plumbing call but that's about it.
i think it really depends on the area you're in and what the housing market is like where you are. Where I live you can still nab houses for a reasonable price. My city is attracting more and more Toronto residents who are priced out or don't want to pay 1.5 million for a house. We're getting great year to year value increases. The rental market is also strong in my city. My plan is to keep it for ten years, do any necessary renos and sell it. I think I could pay my house off after that and be mortgage free at 45.
If you're renting now, the best way to get into the market is to find a house with a basement apartment you could rent out. Then once you get on your feet a bit more, you buy another house for yourself and rent the other part of the first house.
i think it really depends on the area you're in and what the housing market is like where you are. Where I live you can still nab houses for a reasonable price. My city is attracting more and more Toronto residents who are priced out or don't want to pay 1.5 million for a house. We're getting great year to year value increases. The rental market is also strong in my city. My plan is to keep it for ten years, do any necessary renos and sell it. I think I could pay my house off after that and be mortgage free at 45.
If you're renting now, the best way to get into the market is to find a house with a basement apartment you could rent out. Then once you get on your feet a bit more, you buy another house for yourself and rent the other part of the first house.
Or if you have enough resources to invest/build apartments/condos in Denver and other hot areas....could make a killing there
#5
Team Owner
Instead of a traditional rental, how about renting a vacation property? My family is large so when I go on vacation I rent a house. There is a huge market for this in area's where there are tourist destinations. Orlando, FL is great example. I rented a couple different villas 10 mins from Disney. The owners weren't even local, one lived in Canada. They have a management company take care of the property and the owner's only job is to find renters (airbnb, homeaway, etc) and collect the money. The houses in Orlando seem to rent year round because of closeness to Disney/Universal.
Being that Honolulu is a big tourist destination this could be a great option for you.
Being that Honolulu is a big tourist destination this could be a great option for you.
The following users liked this post:
nist7 (01-11-2018)
#6
^ https://www.cnbc.com/2017/09/01/airb...-listings.html
These homeowners faced an Airbnb nightmare as renters left them facing huge fines and angry neighbors
Drew Grewal faced fines of nearly half a million dollars because his Miami Beach home was being listed illegally on Airbnb.
In Miami Beach — as in New York, San Diego and many other U.S. cities — short-term rentals of the kind facilitated by Airbnb, VRBO, Tripadvisor and others are strictly limited. Laws, fees and taxes vary regionally, but fines for violations are typically high. In Miami Beach, the fines run at $20,000 for a first violation and rise from there.
When the first notice arrived on Jan. 19, Grewal thought the city of Miami Beach must be mistaken. He hadn't used Airbnb as a host in years. Then it dawned on him that his long-term tenants might be responsible, despite a clause in their lease barring them from using his place for transient occupancy.
An agent checked up on the property for him and confirmed his suspicions. The yard had been trashed, with some patio furniture shredded. Somebody had installed electronic locks — presumably so guests could check in and out.
Grewal expected it may take time to clear his name with the city or to evict his tenants if they didn't fix the situation. But he figured a tech start-up like Airbnb should be able to remove the listing pretty easily.
First, he had to figure out where the listing was, since Airbnb's site doesn't let users search by address to check whether properties they own might be listed illegally. He was looking for a place for four or six adults, since the house has three bedrooms.
He eventually found the unauthorized listing on March 17. It was promising a "Tropical, Eclectic Home...Sleeps 12!!"
That day, he emailed Airbnb's customer service team with a link to the listing in question. He said: "I am the homeowner of this property. This is being rented by tenants I have a year-long contract with without my authorization. It needs to be removed immediately."
Correspondence shared with CNBC shows that Airbnb sent Grewal down a customer service rabbit hole. First, the company sent him an automated response to which he could not reply. Then he placed a couple of urgent calls to Airbnb, spoke with different employees and was promised a response in five to 10 minutes. That didn't happen.
He emailed Airbnb's trust and safety team that night. Nothing.
Five more days passed, correspondence shows, without Airbnb assigning a dedicated person to his case. Then on March 23, Airbnb wrote Grewal with what amounted to a shrug.
A customer service representative wrote: "All users by agreeing to our Terms of Service and when listing a property, agree that they have all rights to the accommodations. I do understand your concern regarding confirming rights to a listing; however, we do not provide any type of legal advice to our users."
Meanwhile, fines from the city of Miami Beach were accruing to Grewal. And he was spending thousands on legal help and travel from Silicon Valley, where he lives today, back to Miami Beach for eviction-related hearings.
Grewal then tapped his personal connections who knew people at Airbnb, and finally on March 28 — 11 days after he first contacted Airbnb — the company informed Grewal that they would reach out to his tenants to inform them of their "obligations."
The illegal listing came down on April 4. Grewal breathed a sigh of relief.
But four days later, travelers showed up at the house ready for a dream vacation to find locked doors and an eviction notice. They called Grewal, whose number was on that notice, to complain.
Grewal sought an explanation from Airbnb but says he got no response.
After he evicted his tenants, Grewal says, he noticed some of his furniture missing, including a distinct purple futon and a white couch. He says he saw both items later appear in two other Miami Beach listings on Airbnb.
The listing that had been pulled down from Airbnb appeared with the same photos and copy on a site called Vacayo.com. It turns out that Grewal's tenants, Isabel Berney and Temitope "Truth" Oladapo, were behind that site — Oladapo registered the domain, and Berney lists herself as the company's co-founder on her LinkedIn page.
Vacayo was recently accepted into start-up accelerator 500 Startups. Today Vacayo touts itself as a start-up that "transforms long-term rentals into beautiful, short-term group vacation homes available online." 500 Startups did not respond to requests for comment. After we published this story, Vacayo was no longer listed on 500 Startups' web site.
When contacted by CNBC, Berney and Oladapo declined to comment on the specific incidents reported here, but both said in emails that Vacayo was not involved. However, Grewal provided screenshots, which file data shows were created on April 14, showing his property listed on Vacayo. In fact, the property was listed on Vacayo.com as of Aug. 30, as seen in a screenshot below taken by CNBC.
Oladapo said that he did not install the locks. He also said Grewal asked him to take the furniture, which Grewal disputes.
Grewal's misery has plenty of company. Other homeowners and real estate professionals are facing similar troubles in Miami Beach and beyond.
A long-time real estate investor in Miami Beach, Rula Giosmas, told CNBC she had Airbnb-related problems at two of her four properties there. In the most extreme case, she thought she had rented out her place to a nice couple with a kid moving from New York.
Her tenants in this house? Oladapo and Berney, according to correspondence viewed by CNBC.
Within a couple of months, the plumbing at her property had been clogged. Giosmas sent a plumber out, who suggested she may want to drop by for an inspection.
When she did, she says she found the place had been outfitted with smart locks and security cameras, presumably so the tenants could remotely let guests and a maid service in and out of the property — or keep inspectors and landlords locked out.
The place was also crammed with cheap furniture, double beds in every room, and had signs taped up throughout the house admonishing guests not to throw parties or make loud noises, she says.
Knowing that short-term rentals were not allowed in this zone of the city, she checked Miami Beach records for any notices on the property. She found that the city was fining her $20,000 for short-term rental violations there.
Giosmas says she lost more than four months' rent to the tenants who were running what she said was "like a flop house" out of her property. And she lost the faith of her neighbors who complained about raucous guests who left trash strewn around the neighborhood. "They had dozens of bags of trash on the side of the house that hadn't been picked up."
When Giosmas reached out to Airbnb with the listing, the company told her she needed to talk to the hosts (her tenants) to resolve the issue, she says. But within five days, she estimates, the company took the listing down.
Still, she's not pleased. "It's a huge scam," she told CNBC of her experiences with renters illegally subletting their places to travelers. "And the city sticks the owners with the fees. Airbnb, VRBO and the rest of them are like real estate cancer."
She is still working on getting tens of thousands of dollars in fines resolved with Miami Beach. And as with Grewal, payments to lawyers have also cost her thousands.
The problem isn't limited to Miami Beach, however.
In San Diego, two real estate professionals who asked to remain unnamed said homeowners' associations have been plagued by long-term tenants turning houses into "youth hostels" in the area, typically using Airbnb to book guests.
One, in the San Diego suburb of Coronado, told CNBC, "It's a no-margin bed-and-breakfast for them. Homeowners are getting fined by their HOA, and sometimes the city, having to hire property managers and lawyers to deal with it all. They're losing their livelihoods. They rely on rent to pay mortgages. And they didn't count on all these expenses."
. . . .
[ SNIP ]
- Homeowners in Miami Beach tell CNBC that they've faced huge fines from the city when tenants in their properties listed them illegally on Airbnb.
- Airbnb told property owners it was not responsible for vetting whether properties are allowed to be listed for short-term rentals.
- Airbnb was slow to take the listings down, and has not instituted the most obvious long-term fix: banning property listings in ZIP codes where cities don't allow them.
Drew Grewal faced fines of nearly half a million dollars because his Miami Beach home was being listed illegally on Airbnb.
In Miami Beach — as in New York, San Diego and many other U.S. cities — short-term rentals of the kind facilitated by Airbnb, VRBO, Tripadvisor and others are strictly limited. Laws, fees and taxes vary regionally, but fines for violations are typically high. In Miami Beach, the fines run at $20,000 for a first violation and rise from there.
When the first notice arrived on Jan. 19, Grewal thought the city of Miami Beach must be mistaken. He hadn't used Airbnb as a host in years. Then it dawned on him that his long-term tenants might be responsible, despite a clause in their lease barring them from using his place for transient occupancy.
An agent checked up on the property for him and confirmed his suspicions. The yard had been trashed, with some patio furniture shredded. Somebody had installed electronic locks — presumably so guests could check in and out.
Grewal expected it may take time to clear his name with the city or to evict his tenants if they didn't fix the situation. But he figured a tech start-up like Airbnb should be able to remove the listing pretty easily.
First, he had to figure out where the listing was, since Airbnb's site doesn't let users search by address to check whether properties they own might be listed illegally. He was looking for a place for four or six adults, since the house has three bedrooms.
He eventually found the unauthorized listing on March 17. It was promising a "Tropical, Eclectic Home...Sleeps 12!!"
That day, he emailed Airbnb's customer service team with a link to the listing in question. He said: "I am the homeowner of this property. This is being rented by tenants I have a year-long contract with without my authorization. It needs to be removed immediately."
Correspondence shared with CNBC shows that Airbnb sent Grewal down a customer service rabbit hole. First, the company sent him an automated response to which he could not reply. Then he placed a couple of urgent calls to Airbnb, spoke with different employees and was promised a response in five to 10 minutes. That didn't happen.
He emailed Airbnb's trust and safety team that night. Nothing.
Five more days passed, correspondence shows, without Airbnb assigning a dedicated person to his case. Then on March 23, Airbnb wrote Grewal with what amounted to a shrug.
A customer service representative wrote: "All users by agreeing to our Terms of Service and when listing a property, agree that they have all rights to the accommodations. I do understand your concern regarding confirming rights to a listing; however, we do not provide any type of legal advice to our users."
Meanwhile, fines from the city of Miami Beach were accruing to Grewal. And he was spending thousands on legal help and travel from Silicon Valley, where he lives today, back to Miami Beach for eviction-related hearings.
Grewal then tapped his personal connections who knew people at Airbnb, and finally on March 28 — 11 days after he first contacted Airbnb — the company informed Grewal that they would reach out to his tenants to inform them of their "obligations."
The illegal listing came down on April 4. Grewal breathed a sigh of relief.
But four days later, travelers showed up at the house ready for a dream vacation to find locked doors and an eviction notice. They called Grewal, whose number was on that notice, to complain.
Grewal sought an explanation from Airbnb but says he got no response.
After he evicted his tenants, Grewal says, he noticed some of his furniture missing, including a distinct purple futon and a white couch. He says he saw both items later appear in two other Miami Beach listings on Airbnb.
The listing that had been pulled down from Airbnb appeared with the same photos and copy on a site called Vacayo.com. It turns out that Grewal's tenants, Isabel Berney and Temitope "Truth" Oladapo, were behind that site — Oladapo registered the domain, and Berney lists herself as the company's co-founder on her LinkedIn page.
Vacayo was recently accepted into start-up accelerator 500 Startups. Today Vacayo touts itself as a start-up that "transforms long-term rentals into beautiful, short-term group vacation homes available online." 500 Startups did not respond to requests for comment. After we published this story, Vacayo was no longer listed on 500 Startups' web site.
When contacted by CNBC, Berney and Oladapo declined to comment on the specific incidents reported here, but both said in emails that Vacayo was not involved. However, Grewal provided screenshots, which file data shows were created on April 14, showing his property listed on Vacayo. In fact, the property was listed on Vacayo.com as of Aug. 30, as seen in a screenshot below taken by CNBC.
Oladapo said that he did not install the locks. He also said Grewal asked him to take the furniture, which Grewal disputes.
Grewal's misery has plenty of company. Other homeowners and real estate professionals are facing similar troubles in Miami Beach and beyond.
A long-time real estate investor in Miami Beach, Rula Giosmas, told CNBC she had Airbnb-related problems at two of her four properties there. In the most extreme case, she thought she had rented out her place to a nice couple with a kid moving from New York.
Her tenants in this house? Oladapo and Berney, according to correspondence viewed by CNBC.
Within a couple of months, the plumbing at her property had been clogged. Giosmas sent a plumber out, who suggested she may want to drop by for an inspection.
When she did, she says she found the place had been outfitted with smart locks and security cameras, presumably so the tenants could remotely let guests and a maid service in and out of the property — or keep inspectors and landlords locked out.
The place was also crammed with cheap furniture, double beds in every room, and had signs taped up throughout the house admonishing guests not to throw parties or make loud noises, she says.
Knowing that short-term rentals were not allowed in this zone of the city, she checked Miami Beach records for any notices on the property. She found that the city was fining her $20,000 for short-term rental violations there.
Giosmas says she lost more than four months' rent to the tenants who were running what she said was "like a flop house" out of her property. And she lost the faith of her neighbors who complained about raucous guests who left trash strewn around the neighborhood. "They had dozens of bags of trash on the side of the house that hadn't been picked up."
When Giosmas reached out to Airbnb with the listing, the company told her she needed to talk to the hosts (her tenants) to resolve the issue, she says. But within five days, she estimates, the company took the listing down.
Still, she's not pleased. "It's a huge scam," she told CNBC of her experiences with renters illegally subletting their places to travelers. "And the city sticks the owners with the fees. Airbnb, VRBO and the rest of them are like real estate cancer."
She is still working on getting tens of thousands of dollars in fines resolved with Miami Beach. And as with Grewal, payments to lawyers have also cost her thousands.
The problem isn't limited to Miami Beach, however.
In San Diego, two real estate professionals who asked to remain unnamed said homeowners' associations have been plagued by long-term tenants turning houses into "youth hostels" in the area, typically using Airbnb to book guests.
One, in the San Diego suburb of Coronado, told CNBC, "It's a no-margin bed-and-breakfast for them. Homeowners are getting fined by their HOA, and sometimes the city, having to hire property managers and lawyers to deal with it all. They're losing their livelihoods. They rely on rent to pay mortgages. And they didn't count on all these expenses."
. . . .
[ SNIP ]
#7
Suzuka Master
iTrader: (4)
In a lot of cities the residents are signing petitions and a lot of fines imposed on people that rent out/"AirBnB" their homes (or the homes they do not reside in). They claim it diminishes their community. The above is a good article on the situation.
As a Realtor in the DC Metro area, rental income streams are what a lot of my clients use to supplement the income from fulltime jobs. They started with a typical 9-5 (sometimes keeping them), but most times once they see how much their income increases with each rental they eventually put all of their time and effort into real estate. I would suggest if you do not have the time or patience to deal with tenants, hiring a property manager is a great way avoid many of the stresses that come with being a landlord.
As others have mentioned investing in a hyper-market like Denver or Colorado is a great way to go. Acquiring a multi unit dwelling is also beneficial if you would like to live in a place and have your most of all of your mortgage costs paid by your tenants.
As a Realtor in the DC Metro area, rental income streams are what a lot of my clients use to supplement the income from fulltime jobs. They started with a typical 9-5 (sometimes keeping them), but most times once they see how much their income increases with each rental they eventually put all of their time and effort into real estate. I would suggest if you do not have the time or patience to deal with tenants, hiring a property manager is a great way avoid many of the stresses that come with being a landlord.
As others have mentioned investing in a hyper-market like Denver or Colorado is a great way to go. Acquiring a multi unit dwelling is also beneficial if you would like to live in a place and have your most of all of your mortgage costs paid by your tenants.
The following users liked this post:
nist7 (01-11-2018)
Trending Topics
#8
Moderator
iTrader: (1)
I want an 11-15 unit apartment complex SOOO bad and is my goal in the next 10 years.
ultimately, I want at least 4 of these multi-family units. which would replace my 9-5
I see a benefit with multi-family units BECAUSE there will always be tenants.
with a single family home, if you dont have a tenant, you have to come out of pocket for that mortgage payment
if you havent already, check out Biggerpockets.com
ultimately, I want at least 4 of these multi-family units. which would replace my 9-5
I see a benefit with multi-family units BECAUSE there will always be tenants.
with a single family home, if you dont have a tenant, you have to come out of pocket for that mortgage payment
if you havent already, check out Biggerpockets.com
Last edited by justnspace; 01-11-2018 at 07:24 AM.
The following users liked this post:
nist7 (01-11-2018)
#10
Moderator
iTrader: (1)
right now, some of the apartment complexes were flooded and not a good time to buy in Houston, for me at least.
the reason why I was considering multifamily units/commercial units were for the tax benefits. a 4 unit would still be considered a residential property.
but that might have changed with this new tax bill
#11
Safety Car
Thread Starter
I want an 11-15 unit apartment complex SOOO bad and is my goal in the next 10 years.
ultimately, I want at least 4 of these multi-family units. which would replace my 9-5
I see a benefit with multi-family units BECAUSE there will always be tenants.
with a single family home, if you dont have a tenant, you have to come out of pocket for that mortgage payment
if you havent already, check out Biggerpockets.com
ultimately, I want at least 4 of these multi-family units. which would replace my 9-5
I see a benefit with multi-family units BECAUSE there will always be tenants.
with a single family home, if you dont have a tenant, you have to come out of pocket for that mortgage payment
if you havent already, check out Biggerpockets.com
Yeah I've seen biggerpockets.com linked and will definitely start diving into that as well.
Instead of a traditional rental, how about renting a vacation property? My family is large so when I go on vacation I rent a house. There is a huge market for this in area's where there are tourist destinations. Orlando, FL is great example. I rented a couple different villas 10 mins from Disney. The owners weren't even local, one lived in Canada. They have a management company take care of the property and the owner's only job is to find renters (airbnb, homeaway, etc) and collect the money. The houses in Orlando seem to rent year round because of closeness to Disney/Universal.
Being that Honolulu is a big tourist destination this could be a great option for you.
Being that Honolulu is a big tourist destination this could be a great option for you.
Honolulu is a very nice market actually, the issue is the price of entry. Condos in a desirable location is fairly pricey (in my area, Ala Moana, with great views...a 1000sf condo 2bedroom is anywhere from 700k-1.5M+). But I did meet someone on a blog who is a real estate investor in Hawaii and coming here shortly so I'll definitely need to see what his secrets are!
#12
tehLEGOman
Join Date: Dec 2004
Location: Charlotte, NC
Age: 41
Posts: 9,135
Received 1,982 Likes
on
1,335 Posts
Definitely would be nice to have someone pay your mortgage! The houses in Hawaii rent for quite a bit. I was checking them out online the other week.
#13
Moderator
Join Date: Oct 2004
Location: Not Las Vegas (SF Bay Area)
Age: 39
Posts: 63,178
Received 2,774 Likes
on
1,977 Posts
i'd love to live in Honolulu
#14
Honolulu is a very nice market actually, the issue is the price of entry. Condos in a desirable location is fairly pricey (in my area, Ala Moana, with great views...a 1000sf condo 2bedroom is anywhere from 700k-1.5M+). But I did meet someone on a blog who is a real estate investor in Hawaii and coming here shortly so I'll definitely need to see what his secrets are!
The following users liked this post:
Mizouse (02-07-2018)
Thread
Thread Starter
Forum
Replies
Last Post
elezam
Money & Investing
24
07-09-2009 12:36 AM