Real Estate Ty-cats

[chum1]

• A mutual fund investment averaging 10% returns after fees ends up at a 7% net annualized return = Almost $138,000 after 15 years.

• A turnkey rental property investment leveraging your $50,000 to buy $200,000 in real estate, averaging 6% in net annualized return after expenses and 3% annual appreciation of the asset = Over $431,000 after 15 years.

https://www.forbes.com/sites/forbesrealestatecouncil/2018/04/11/stock-market-vs-real-estate-the-right-approach-for-passive-income-investors/#4d898497d857

[catastrophe]

What is a normal repair budget for a year?  $3,000 to fix just the necessary stuff? 

 

Like literally every other question you asked, it is highly dependent upon what property you are the landlord of and is so broad that no one could possibly answer it, further indicating that this is something you probably aren't close to prepared to take on.

Buy mutual funds or ETFs.

That was in response to clams acting like I assumed nothing would need fixing.

[catastrophe]

chum just made it on the "PM secrets after rolling in money" list.

[wetwillie]

• A mutual fund investment averaging 10% returns after fees ends up at a 7% net annualized return = Almost $138,000 after 15 years.

• A turnkey rental property investment leveraging your $50,000 to buy $200,000 in real estate, averaging 6% in net annualized return after expenses and 3% annual appreciation of the asset = Over $431,000 after 15 years.

https://www.forbes.com/sites/forbesrealestatecouncil/2018/04/11/stock-market-vs-real-estate-the-right-approach-for-passive-income-investors/#4d898497d857

Full disclosure: I am co-partner of a turnkey investment company.)

[puniraptor]

property management company pro tip:

they are all horrible and idiots, but worth it to deal with the month to month admin and finding renters.

i got on with a brand new company and negotiated a good rate, then they were horrible and got bought out by another company, which is somewhat less horrible but has honored my original rate, which is really nice.

[puniraptor]

What is a normal repair budget for a year?  $3,000 to fix just the necessary stuff? 

 

Like literally every other question you asked, it is highly dependent upon what property you are the landlord of and is so broad that no one could possibly answer it, further indicating that this is something you probably aren't close to prepared to take on.

Buy mutual funds or ETFs.

That was in response to clams acting like I assumed nothing would need fixing.

financially plan on having to totally repaint and re-carpet between each renter (if they have kids or pets). the cost will obviously depend on your sq ft.

the other costs depends on how crappy your place is and how much of your crappy stuff breaks down.

[sys]

you can also magnify your gains and losses in stocks with leverage.

[puniraptor]

and you can convert your house to blockchain

[ChiComCat]

If you are using a company to manage your VRBO, I would guess you are looking at 40% off the top of any rent you would receive.  Any maintenance would be on top of that.  Any decent PM company will have comps and give you a good idea of what to expect.  The best way to make money is to not be the one using it on prime dates. 

[Kat Kid]

If you are looking for real VRBO advice, I can call up my buddy who is the King of Council Grove to break down lake properties.

[catastrophe]

Let’s hear it. Interested in this as well.

[EMAWican]

Build a small hidden room in the house and stash BTC miners. Make sure renter pays electric bill tho

[ChiComCat]

If you're doing VRBO, I would also recommend some smart devices particularly thermostat.  Fuckers are going to come in the middle of summer and crank it down to 60 degrees.  You need to at least be able to adjust that when they check out.

[puniraptor]

I am also entangled in vacation rental.  Airbnb/VRBO

Tiny cabin in North Georgia mountains.

[puniraptor]

Airbnb/VRBO advice: make it a nice place where you would want to stay. Put Andes mints on the pillows.

[catastrophe]

What kind of biz does your cabin generate? You got a property manager for it? If so, do they take care of the listing and everything or do you just AirB&B?

[DaBigTrain]

Build a small hidden sound proof room in the house and stash BTC miners. Make sure renter pays electric bill tho

[chum1]

you can also magnify your gains and losses in stocks with leverage.

With a fraudulent loan? I like the idea, I just don't know how it would work.

[sys]

i don't advocate bank fraud.

[wetwillie]

SMDH @ chum1

[chum1]

Well, that sounds boring.

[catastrophe]

I think most real estate moguls would tell you not to purchase a property solely in the hopes that it appreciates, which is essentially what you would be doing if you leveraged stocks (minus some dividends that are typically at the complete discretion of individual companies).

[sys]

I don't think the difference in asset type is that significant.  but there are very significant differences in loan conditions and tax treatment that favor real estate.

[EuroCat]

I have a few units. Couple of thoughts about 'nalysis

Assume the worst in your analysis. You don't want to get foreclosed on.

I assume 8% gross rents are vacancy costs (lost revenue, turnover costs)
15% gross rents go to repairs
Always assume 8-10% for property management. Even if you self manage, you don't want to take that option off the table.
Property tax, insurance, debt service also needs to accounted for

I look for deals that offer at the very least 7% cash on cash return. Appreciation is just icing on the cake. I don't plan on it

[catastrophe]

Do you own properties through an LLC? How do you finance?