Owning a Rental to Supplement Income

[34saving]

Re: Owning a Rental to Supplement Income

In most cases having a rental makes your income tax bill lower. (Of course that's because you're not making much money . . . .) Usually the depreciation on the unit/property taxes/maintenance expenses/"down time" from when the unit isn't rented/etc. will counteract any income claimed and you'll be ahead tax-wise.

I agree that you need to be a "hands on" landlord. Even good tenants need some help and accountability. ("What do you mean you have to turn off the outside water before winter comes?" -- okay, that probably doesn't apply to your area, but there must be some earthquake equilvalent )

Nationwide the condo market is really tricky right now (lots of overbuilding). I'm not an expert in your area, so maybe it's okay where you are, but make sure you know your stuff!

[Aleta]

Re: Owning a Rental to Supplement Income

The only thing that you can do is to save some money to the side. I have a rental and I put away 5% of the monthly rent income. Anyway, you need to have some kind of cushion in case your house would be vacant for a month. Something else that I do is to take a video of the house before I rent. You can use a newspaper with the date and headlines on it. That way you can prove what condition your rental was in before the new tenants moved in. Always check the AC Filters and make sure that they are changing them regularly. It will save you on your repair bills.

[vsjhoc]

Re: Owning a Rental to Supplement Income

Has anyone had experience renting out commercial property (office space, warehouse), as opposed to residential (condo, house, etc.)?

[TBH]

Re: Owning a Rental to Supplement Income

I've thought about this too but I've realized I really don't know enough about it, and I'm not handy enough to fix stuff myself, so I think it's not the right time. Also, I could probably scrape together the money for a down payment but only at the expense of other, more important savings goals.

The most likely scenario where we'd become landlords is if we moved out of our house for some reason (to move to another city, to trade up, whatever). Our house would make a great rental because we could cover the mortgage easily with the going rent rates, and still have a cushion to pay for repairs, taxes, vacancies, etc. I don't think I'd care too much about having positive cash flow from the rent. I'd be satisfied if it paid for itself and if it was slowly appreciating in value and slowly paying down my mortgage.