Entering Rental Properties
My wife and I have recently decided to purchase a property for long-term rental in our city. We have some cash but we also have around $200k in equity in our house. What are some good options for us to get started?
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#1 Starting Out Contributor
- Flipper/Rehabber
- Pittsburgh
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#1 Starting Out Contributor
- Flipper/Rehabber
- Pittsburgh
hello and welcome. reactions:
-yes, it's VERY easy to get into. go on Zillow - buy any house. rent it out. voila, you're an investor.
-what's hard is MAKING MONEY on that house. as an investor you're competing with people who want to live in houses. they can pay way more than an investor can because they don't need a return.
-i always get nervous when people say "i have $X of equity." equity is EXPENSIVE to tap - doing so is a great way for the BANK to make money, and not you. if you don't have a bunch of cash, actual cash, you're not ready.
-you got great advice from @Kevin Sobilo. note his example where you buy a property, "successfully" rent it out, and then sell and lose money. that's not why most of us are doing this.
-BRRRRs are tough and annoying and obnoxious. i just did a home run BRRRR last year and a not so great one this year. every step is difficult. it's not 2016 anymore - you can't just buy a property, refresh it and refinance. you will lose money doing that. there is fierce competition for BRRRR-able inventory - no one is out there surfacing properties that are just waiting for you to buy and paint.
hope this helps. happy to dialogue further