LOL at the, "when we bought a bigger house, we just rented out the one we don't need anymore. NBD." Most people need to use their current home equity to buy a bigger house and wouldn't be able to afford two mortgages if a property was vacant for any period of time. But sure.
(I will inherit our family lake house someday, along with my brother, but do not plan to rent it out.)
It isn't LOL when you bought a house at the worst possible time and still haven't broke even 15 years later. Our choices were to stay in the home which I hated and was too small to add our surprise twins, bring 90 k to the table which we don't have to sell, foreclose or rent it out.
A lot of good people got fucked when the market tanked so it isn't as simple as a "rich person problem" at all. We are lucky we qualfied for a second mortgage and was able to find great long-term tenants but know we are always on the brink of foreclosing if something happens and it is not fun living with that anxiety everyday :/ I also have no properties to inherit.
Since you had no equity to pull out, I’m not talking about you.
Post by dcrunnergirl52 on Nov 23, 2018 22:14:02 GMT -5
Yes, we did until about 3 months ago. DH bought a condo in DC near GW when he moved there in 1996 before prices skyrocketed. When we bought our first house in the suburbs 10 years ago, we rented it out but his parents did most of the relatively small amount of work (maybe once a year there was an issue where it made more sense for them to handle instead of us driving into the city for it) on it because they moved to the same neighborhood several years after DH bought the condo.
We just recently sold the condo to his parents to use as part of our down payment on our new house. They also own two rowhouses in the same neighborhood that they rent out along with their own house, which we'll inherit someday (hopefully decades from now) so we'd likely just continue keeping all four properties as rentals.
We only owned two homes for a few months while we were renovating the house that we bought. My husband seems to think we could make money owning rental properties, but the idea of all the work involved exhausts me. So far I've been able to hold him off this idea.
Post by Velar Fricative on Nov 23, 2018 22:31:54 GMT -5
No, we just own the home we live in, which we are lucky enough to have. This is a VHCOL area so there’s no way we could afford it. Plus, I hate dealing with maintenance shit in my own house anyway, so I don’t want to deal with more properties and having tenants.
It isn't LOL when you bought a house at the worst possible time and still haven't broke even 15 years later. Our choices were to stay in the home which I hated and was too small to add our surprise twins, bring 90 k to the table which we don't have to sell, foreclose or rent it out.
A lot of good people got fucked when the market tanked so it isn't as simple as a "rich person problem" at all. We are lucky we qualfied for a second mortgage and was able to find great long-term tenants but know we are always on the brink of foreclosing if something happens and it is not fun living with that anxiety everyday :/ I also have no properties to inherit.
Since you had no equity to pull out, I’m not talking about you.
Really? I am pretty sure you were talking exactly about my post since I was one of the only ones who mentioned needing a bigger home, renting our old one and writing it 3 posts under mine.
Not sure who else you were talking about and surely no one was LOLing about all their equality.
What a complete flippant fucking answer and response to my post.
Yes, but not by choice. Like a few others, I purchased my condo at the height of the market. By 2011 it was $200k underwater. There were a lot of foreclosures on the complex, intentional and otherwise, which really drove comps down. We bought a SFH in 2013 because we wanted more space, so I started renting it out. Due to my financing, however, I was never able to rent it out at a profit and actually lost a substantial amount of money each month. Just this year it reached a point where I could break even on a sale ..... but the HOA board got into a payment dispute with a contractor and now every unit has a lien on it, which makes a sale practically impossible. And my tenants are moving out soon. I'm really at the end of my rope financially with it and am not sure what's going to happen. It's a stressful situation.
My brother and I recently inherited our childhood home, but we have no interest in renting it out. We both live at a distance and it will require to much work and money to bring it up to date. Plus I don't want to be financially entangled with SIL. We'll likely sell it in a few years.
H owns several rental properties with his mom, which is a separate business they started long before we married. I'm not involved with it at all.
LOL at the, "when we bought a bigger house, we just rented out the one we don't need anymore. NBD." Most people need to use their current home equity to buy a bigger house and wouldn't be able to afford two mortgages if a property was vacant for any period of time. But sure.
(I will inherit our family lake house someday, along with my brother, but do not plan to rent it out.)
It isn't LOL when you bought a house at the worst possible time and still haven't broke even 15 years later. Our choices were to stay in the home which I hated and was too small to add our surprise twins, bring 90 k to the table which we don't have to sell, foreclose or rent it out.
A lot of good people got fucked when the market tanked so it isn't as simple as a "rich person problem" at all. We are lucky we qualfied for a second mortgage and was able to find great long-term tenants but know we are always on the brink of foreclosing if something happens and it is not fun living with that anxiety everyday :/ I also have no properties to inherit.
Add me to the list of reluctant landlords not by choice.
I moved for work nine years ago and was deeply underwater on my condo. I got s lot of advice on MM and considered walking away but we rented it. I lived for YEARS in sheer terror that I would be fucked at any moment as a) it did not break even with rent and mortgage payments and b) I needed the rent to pay the mortgage.
I am exceedingly fortunate to have had good tenants and a strong rental market. This is the first year (9 years later!!) that the rent covers my PITI plus condo fees on the property. I guess at this point I consider it forced retirement savings. We will have paid it off in another ten years so at this point I might as well keep it.
It still takes a great deal of mental energy - I had to call a plumber for them this week - and I would have rather sold it all those years ago.
Please understand that for those of us who can't even afford to think about or dream about being able to buy property where we live, we get the anxiety of becoming an unintentional landlord because of finances is hell. But it's hard to not have an "oh must be nice" moment when people talk about buying a second house. At least in my world, because I can't even afford to think about buying one. I'm guessing there are lots of feels going on in this thread.
I own an apartment in my city. I lived there for close to 10 years, first as a single person, then with my eventual husband, dog, and finally daughter. About 2 years ago, we moved into my childhood home in the same city (dad moved in with his gf) We kept our apartment and rented it out because it’s nearly paid off and we care about the building. That, and the increase in value far, far outmatches what we could make on other investment. HCOL here.
LOL at the, "when we bought a bigger house, we just rented out the one we don't need anymore. NBD." Most people need to use their current home equity to buy a bigger house and wouldn't be able to afford two mortgages if a property was vacant for any period of time. But sure.
(I will inherit our family lake house someday, along with my brother, but do not plan to rent it out.)
It’s pretty location and circumstance dependent. The total combined purchase price for our two houses is under $375k. Because the first was a duplex, it made sense to save for a down payment on the second house because our tenant’s rent covered most of that mortgage. And it made sense to keep it rather than sell and cash out our “equity” because the rental income would continue to pay for expenses on the rental and we bought a new house that was way below our means. I put “equity” in quotes because if we would have sold at the time, while we would have sold for more than the purchase price, we probably wouldn’t have recouped the money we’d put into fixing up the place while we owned it. We would probably get it back now, but that’s after owning the house for 14 years.
LOL at the, "when we bought a bigger house, we just rented out the one we don't need anymore. NBD." Most people need to use their current home equity to buy a bigger house and wouldn't be able to afford two mortgages if a property was vacant for any period of time. But sure.
(I will inherit our family lake house someday, along with my brother, but do not plan to rent it out.)
Yes, of course. I was just answering the OP’s question of if we had rental property and how we got it. I wasn’t offering advice on the best way to get rental property. This route was expensive as hell and we thought long and hard if it was the best decision.
We were landlords for a bit. Even in the "best" of situations it was still a PITA.
H and I both got jobs about an hour from where we lived, and back in the town where we grew up. H was having to work late a lot, and the drive home was wearing on him. At the same time a friend's sister was moving to our current town and needed a place to rent. We rented our home to the acquaintance for a bit over PITI (but still under market value) and got a rental ourselves in the town where we worked. Our new town was a lower COL, so we were able to save for repairs.
It went relatively well until we moved again for jobs to another state 3hrs away from the rental. At the same time the tenants got super needy with really simple things, and started paying rent late. Once we were ready to buy again (after 3 yrs of being a landlord), we sold our original house. Waiting those 3 yrs allowed us to go from barely breaking even to making a $30k profit. Which was great, as our newest town had a higher COL.
I don't think I'd voluntarily do it again without using a property manager though.
Post by downtoearth on Nov 24, 2018 11:16:21 GMT -5
Yup - own a house in our state and the first house we bought in another state. It was a market thing at the time and when we moved that I thought we’d just keep for about year while we rented to a friend, but mortgages were easier to get than I thought in the new state since we had to move for work, so we could get another first time homeowner mortgage with 5% down only. So now we own two houses purchased for about $400k total for the two... but luckily both worth much more now - especially in CO. We might sell that one soon since we are finally without the tenant and really house poor starting this next month, plus it needs about $3k of painting and tuck pointing work right now. We too haven’t really made more than $5k per year ever bc we didn’t rent for enough in the past since it was our friend (bad landlord) and we lost $ for the first 4 yrs.
LOL at the, "when we bought a bigger house, we just rented out the one we don't need anymore. NBD." Most people need to use their current home equity to buy a bigger house and wouldn't be able to afford two mortgages if a property was vacant for any period of time. But sure.
(I will inherit our family lake house someday, along with my brother, but do not plan to rent it out.)
When you apply for your 2nd loan, the rent from the first is considered income. In some cases the increase in income is better than what you may take away from the sale of the first. Q
Yes we own two rentals on the east coast. We lived in both of them for about 3 years before turning them into investments. My husband is military so we were ordered to move but we chose to keep them to diversify our investments.
We are currently trying to sell one of them so we can take that cash and buy a different kind of rental in Colorado (a condo in ski town). We are going to try the vacation rental thing. We like the idea of getting to use it 1-2 months per year ourselves and rent it out the other 10 months.
Post by imojoebunny on Nov 24, 2018 23:04:14 GMT -5
We have two duplex houses. They are in good areas now, and we have been lucky to have good tenants, some as long as 10 years. DH won the money for the down payment on the first one,had a roommate, and saved to buy the second, lived in them, and then both of us lived in them, until we had kids, fixing them up along the way. I, also, had a house, since I lived in my parents house for a couple of years after grad school, to save the down payment. My house was a fixer, and I spent 6 years fixing it, before DH and I married, which paid for the down payment on our single family home, when we sold it. Being a landlord isn’t for everyone, but I managed rentals in college, as a job, so I knew the drill. DH is good with tenants, and I handle the maintenance. Our rents are high enough to make it worth the hassle, while still being cheaper than the new apartments and single family homes in the area. We plan to sell one soon because the equity income we could get from investing is greater than the income, but it is a unique property in a unique area. My only advice is to buy in an area where they can’t really build more. They can and do build high rises, where our places are, but there is no more room for single or small multi family.
It isn't LOL when you bought a house at the worst possible time and still haven't broke even 15 years later. Our choices were to stay in the home which I hated and was too small to add our surprise twins, bring 90 k to the table which we don't have to sell, foreclose or rent it out.
A lot of good people got fucked when the market tanked so it isn't as simple as a "rich person problem" at all. We are lucky we qualfied for a second mortgage and was able to find great long-term tenants but know we are always on the brink of foreclosing if something happens and it is not fun living with that anxiety everyday :/ I also have no properties to inherit.
I liked this in solidarity. I totally get it.
Me too. I am sorry about your situation, that is just awful I hope the lien situation gets handled soon because that is some bullshit.
We had a second property but were able to get rid of it this year. We had to move because H's job was ending and his new one was nearly two hours each way. But we were $60K under water, so we rented that one out and rented a house for us to live in, and then bought one two years later and owned two homes for two years
We got 30 applications to rent it. Only ONE was qualified financially. They were amazing, but he lost his job and called to tell me they were going to have to break the lease.
@ warning:
I was in labor when they called, and that quadrupled my stress. We decide to take a small 401k loan we could pay off within a year in order to sell it (needed to bring $18k to the table and we only had $10k we could bring in cash). I will never again own two properties unless it's a small condo we can one day pay cash for (feels like a pipe dream right now). Between the $$$ property taxes in IL and maintenance costs, it is hard to make any money when you have a mortgage.