Renting a home

[CSmith]

Let's hear what the brain trust has to say on this topic. Wife and I are wanting to up our sq footage a little bit and move into something better suited for our growing family. I have never rented or rent out a home before so I don't even know the first place to start. Instead of selling our home we are thinking of renting it out for long term renters not a VRBO. if it makes a difference it's located in Lake Havasu. Thanks for any input!

 

[TimeBandit]

Is your current home paid off?

Will you be paying cash for the new house?

If no, Can you afford two mortgages, taxes, insurance and upkeep if no rent is paid?

I did what you are proposing and it paid off, but know there can and will be bumps in the road.

 

[C-Ya]

One of the best ways to acquire long term wealth is to get someone else to pay for your homes.

If you can swing it, rent your house, buy another.

Rinse and repeat.

 

[CSmith]

Is your current home paid off?

Will you be paying cash for the new house?

If no, Can you afford two mortgages, taxes, insurance and upkeep if no rent is paid?

I did what you are proposing and it paid off, but know there can and will be bumps in the road.

Current home is not paid off and no I would not be paying cash for the next home. Ultimately we are debating whether or not to stay in havasu so we may delay the purchase of something else till we explore our options. I dont want to get rid of this home for what our current interest rate is and what it would cost to get back into the same thing in today's market. I have taken into account having to pay 2 mortgages if need be.

 

[THE WIDGE]

Long term rents are not good in havasu. I recently upgraded and bought a new pad in havasu, I wanted to keep old, listed old one up for rent at $2300 a month w property management, 3 bed2bath, detached 36x25 garage, .30 acre lot, clean house, and nada. Listed it last week for sale w 3 full price offers in 24 hours. I’ll make more $ in a cd right now than the rent I wanted until I figure what’s next

 

[badgas]

Let's hear what the brain trust has to say on this topic. Wife and I are wanting to up our sq footage a little bit and move into something better suited for our growing family. I have never rented or rent out a home before so I don't even know the first place to start. Instead of selling our home we are thinking of renting it out for long term renters not a VRBO. if it makes a difference it's located in Lake Havasu. Thanks for any input!

I have had both a long tern rental and now a short term rental. In both cased they were managed by someone else. That is the only way to make it really " Passive " The short term rental in Havasu is nice because we can use it.

If you are the manger, the short term rental will be a lot more work.

 

[Ultra...Good]

I could give a bunch of real world experience on this one. right or wrong but it did happen......

where to start?
- what are you willing to lose? down payment? credit? sanity-reputation?

-take into account the ability to pay for 2 mortgages, 2 water bills, 2 xxxxxxxxx and possibility of cap expense like a/c or sewer lateral. maybe a change in income-decreased.

-will you have someone on call 24-7 for what comes up? somebody has to be there when water starts coming from the light fixture. vacations take some planning if traveling.

-speaking of repairs and such, who will be handling routine? if not you, do you have somebody? are you sure you have someone for repairs? do they know about this?

just off the top of me hat holder

 

[boatpi]

If you have a market for it,
Good managed short
Term can be big $$.

 

[petie6464]

Long term rents are not good in havasu. I recently upgraded and bought a new pad in havasu, I wanted to keep old, listed old one up for rent at $2300 a month w property management, 3 bed2bath, detached 36x25 garage, .30 acre lot, clean house, and nada. Listed it last week for sale w 3 full price offers in 24 hours. I’ll make more $ in a cd right now than the rent I wanted until I figure what’s next

I have a Havasu house that I recently remodeld with the intention of renting it out again. (Was a rental for eighteen years) I've had it sitting empty for two years debating on renting it and having it get beat up again or just selling it. I didn't want the tax hit as it's long paid for and where to move the money too..?

 

[JL95]

I have a Havasu house that I recently remodeld with the intention of renting it out again. (Was a rental for eighteen years) I've had it sitting empty for two years debating on renting it and having it get beat up again or just selling it. I didn't want the tax hit as it's long paid for and where to move the money too..?

Have you looked into dual motor Pontoons?

 

[Ultra...Good]

I have a Havasu house that I recently remodeld with the intention of renting it out again. (Was a rental for eighteen years) I've had it sitting empty for two years debating on renting it and having it get beat up again or just selling it. I didn't want the tax hit as it's long paid for and where to move the money too..?

no way to claim residency to avoid the hit? at least loss of income?

 

[petie6464]

no way to claim residency to avoid the hit? at least loss of income?

Going to go over the loss of income with my accountant. As far as residency I haven't lived there since 2000.

 

[NicPaus]

Going to go over the loss of income with my accountant. As far as residency I haven't lived there since 2000.

Move in and then sell it in 2 years.

 

[CSmith]

Move in and then sell it in 2 years.

"Move in"

 

[SOCALCRICKETT]

I have a Havasu house that I recently remodeld with the intention of renting it out again. (Was a rental for eighteen years) I've had it sitting empty for two years debating on renting it and having it get beat up again or just selling it. I didn't want the tax hit as it's long paid for and where to move the money too..?

Wonder if you could do a 1031 exchange since it was a rental

 

[COCA COLA COWBOY]

Just so you know...the rule is you never sell real estate. It is guys like me and the buyers that win every time when you do. You should hold forever and try to add a unit at least every couple years or at least when times are good.

With that said....the current affordability index is .11...meaning that only 11% of people can afford to buy a home right now. In 2007/2008, when the market received a correction the affordability index was .17. A well know economist stated multiple times that usually the market will shift when it hits that .17 mark. This cycle has thrown absolutely everyone off. I have seen investors with a lot of units sell their portfolios in 2020 and I thought they had the market pegged. We were all wrong. Even the 10-2 Treasury shows that a steep recession is about to hit at any time, but most are not feeling it and I'm even reluctant in following that measure right now. Many billionaires including the Waltons, Elon, Jamie Diamond, etc just sold off huge stakes so it may be happening pretty soon.

 

[petie6464]

Wonder if you could do a 1031 exchange since it was a rental

Yes you can but wouldn't do me anymore than what I have already.. I have multi tenant units already and not in a hurry for more of that as the CAP rates aren't realistic any longer imo.

 

[petie6464]

Just so you know...the rule is you never sell real estate. It is guys like me and the buyers that win every time when you do. You should hold forever and try to add a unit at least every couple years or at least when times are good.

With that said....the current affordability index is .11...meaning that only 11% of people can afford to buy a home right now. In 2007/2008, when the market received a correction the affordability index was .17. A well know economist stated multiple times that usually the market will shift when it hits that .17 mark. This cycle has thrown absolutely everyone off. I have seen investors with a lot of units sell their portfolios in 2020 and I thought they had the market pegged. We were all wrong. Even the 10-2 Treasury shows that a steep recession is about to hit at any time, but most are not feeling it and I'm even reluctant in following that measure right now. Many billionaires including the Waltons, Elon, Jamie Diamond, etc just sold off huge stakes so it may be happening pretty soon.

Good input. I didn't know it was .11 I've rode out several recessions, they don't scare me they usually shake you and make you think again and get you off the straight and easy, Sometimes the new road is a better one.

I don't see a -.39 10-2 as a abandon ship warning. . Although with everything going on it won't be till after the election that's for sure.

 

[petie6464]

Move in and then sell it in 2 years.

I have two places I live now, a third might be a stretch..