The lien problem - that can really be tricky. There are mechanics liens, tax liens (can be from IRS, county) and even not mowing your lawn liens. Some of those swift investment real estate seminars and books just gloss over this.
The property inherits any of the attached liens.
I would go to a professional title search company. I know those seminars try to tell people they can do that themselves but there may be a complicated property situation.
AND get the Tax Lien insurance.
The desertion factor as someone mentioned - make sure people are staying in the neighborhood and it will not become empty. People would not want to rent and be the only person on a street.
Get the property professionally inspected. You don't want to walk into something that has major problems.
Do you know home maintenance and repairs? Can you get a call at 6:00 a.m. being told of a broken heater and they need it fixed.
And be aware of renters that just pack up and leave at night and for some reason just sort of or really trash the house. Some almost to the point of vandalism. They leave you with expense of lost rent, and the fixing up.
It just goes without saying - try not to rent to a freind or even a relative - they might have the understanding they are going to get a big discount on rent and might be able to skip rent some months when things are tough for them, tough times turns to years and
Then you get to learn about eviction laws, with an attorney.
Although one friend of the family was worth it and paid on time, etc... she was the rare one and stayed a few years.
If you do rent to a friend/relative have a real contract.
Do a credit check background on your tenant, don't just rent to anyone without checking them out.
If the property should stay empty for a few months can you keep it mowed? Make sure squatters are not squatting - there are forums teaching people how to do this in empty property.
Can your personal budget cover a loss of rent income while you paying the taxes and insurance for empty months?
One person who I read of who really did well with renting had a big fund for all the expenses that can happen of people not renting or leaving) his having to fork over the taxes and ins. for the property - he had a big enough cushion for this.
Renting was profitable for this guy because he worked at it and kept up with it. He was an experienced handyman. He could keep the properties well maintained, could do preventative maintenance to stop future problems, was able to fix on call fairly quickly as he just had to get the tools and go there.
At any empty property he made sure to go there, check out the place, mow the grass (you can get a weed lien which can be quite high) and kept the place looking presentable. He also saved by doing this himself and not hiring lawn care company.
He would check out his would be renters - not just rent to anyone.
So a lot of things play into being a landlord. It can really take a lot of work but some people have done this and it has worked for them.
This guy had started with just one house at first - which is a good thing and then kept slowly adding homes as he learned more about it.
|