What do your TENANTS really think?
Rental Property Investor · San Mateo, CA · Member since 2017 · 108 posts · 49 votes
What do your TENANTS really think?
Most Popular Reply
Member since 2022 · 1k+ posts · 1k+ votes
3yHere's what my tenants think. "I've got this great place, I'd better not do anything stupid".
Nomads? They're all yours my friend. Good luck.
37 Replies
- Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes3y
as long as you are investing your money in something that can payoff down the line, there is a lot to be said economically for not being tied to a place. I'm a huge believer in real estate, but it ain't the only path. And hey, the world is big and interesting.
Anyway, here's what they (digital nomads)need and some of what they want:
FAST WIFI above all,
after that a little "zoom room" kind of space separate from the general living area is ideal
clean, simple look.
lots of conveniently placed outlets
good places within walking/biking distance
bike storage/laundry in unit
dishwasher
appliances should be and look new and the kitchen should be visually appealing but singles will order out more than they cook
low VOC paint and other quasi-green touches are nice things to add and put in an ad as a signal.
- Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes3y
I personally rent and own 10 rental properties. 1. Owning my home will not make me any money 2. I can be flexible and can break the lease no matter how the market looks 3. I don't need to do any maintenance
- Real Estate Agent · Rancho Cucamonga, CA · Member since 2018 · 82 posts · 36 votes3y
I have a few friends my age that believe in renting only. For them, it's damage control.
If they were to ever run into financial trouble, they don't have to worry about recurring costs of having a mortgage, insurance, taxes, etc. They would break the lease and walk scotch-free.
- 3yJoe VilleneuvePro MemberPlymouth, MI · Member since 2013 · 13k+ posts · 19k+ votesI own, but Your first point on how Owning doesn't make you any money is a truth most people don't understand. We are told from conception, usually by REA and lenders (I wonder why them?), that your own home is the greatest investment you'll have make. Do the math. Compare the same home as your own home (owned) and as if you were renting it to someone else. Put in all expenses, who pays them, all income from all income sources, Equity at start and built up through appreciation, and separate them by who pays for each, as in the source pf the funds,...i.e. the rent money is the source of funds for the mortgage, so the tenant is actually paying for it. Now, project the cumulated totals for each year,...and tell me if your own home is your greatest investment or expense.
Quote from @Eliott Elias:
I personally rent and own 10 rental properties. 1. Owning my home will not make me any money 2. I can be flexible and can break the lease no matter how the market looks 3. I don't need to do any maintenance
- 3yShiloh LundahlPro MemberRental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
@Joe Villeneuve I posted a video on my channel going over the numbers of the past 3 houses I lived in to see if they were assets or liabilities. You might be surprised to see what I found out as I ran the numbers.
- 3yJoe VilleneuvePro MemberPlymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes...except your numbers, like everyone I've ever encountered who analyzed their own home as an investment, are incomplete. The short list of numbers that are expenses (monthly/yearly) that occur in both your own home and in a rental/income property, are:
Quote from @Shiloh Lundahl:
@Joe Villeneuve I posted a video on my channel going over the numbers of the past 3 houses I lived in to see if they were assets or liabilities. You might be surprised to see what I found out as I ran the numbers.
1 - Repairs/maintenance
2 - utilities
3 - Taxes
4 - Insurance
5 ...etc...These items, and more, are all part of the costs that must be paid...by someone. As I said in my original post here, make up that list including these negative numbers, separate them based on whose money (tenant or owner) is the source of the funds that is paying these items, accumulate the totals year by year, then sell the properties.
At sale, add up the incomes (profit and accumulated cash flow) for each of options..., as if one option was the homeowner's own home and the other option was if it was a rental property. Add up the accumulated costs/expenses, separated by who the source of funds used to pay them.
Now, subtract the total negative (accumulated cost) number, the one that is paid by the investor on the rental house, and the homeowner on the other, from the accumulated profits (accumulated CF and sale profit), and what do you have?
- 3yNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
"we might end up with 75% Renting and 25% owning in 10 years"
this will not happen. while the homeownership rate took a big hit after the financial crisis, but has steadily gone back up since then. if the US population continues to grow, as i hope it does, the absolute number of both renters and homeowners can both go up while the percentage of each fluctuates.
"we're becoming a nation of renters" is a fun slogan, but just has no basis in reality.
as owners we should: provide high quality rentals, provide responsive customer service, follow the lease, and expect the resident to follow the lease as well.
- 3yShiloh LundahlPro MemberRental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
@Joe Villeneuve thanks for taking a look at my video. The taxes and insurance were included in the mortgage in my videos.
I also didn’t include the cost for the utilities because they were a wash wether I rented or owned.
I tried to include anything I spent on fixing the home up in the rehab costs. I may have missed a few hundred to a few thousand dollars for repairs in my calculation over the entire time I lived in each house but a few thousand dollars wouldn’t have change the scenarios outcome sufficiently enough to have changed whether the home ended up being an asset or a liability.
- 3yJoe VilleneuvePro MemberPlymouth, MI · Member since 2013 · 13k+ posts · 19k+ votesThe utilities aren't a wash because you pay for them in your own home, but the tenant pays for them in a rental.
Quote from @Shiloh Lundahl:
@Joe Villeneuve thanks for taking a look at my video. The taxes and insurance were included in the mortgage in my videos.
I also didn’t include the cost for the utilities because they were a wash wether I rented or owned.
I tried to include anything I spent on fixing the home up in the rehab costs. I may have missed a few hundred to a few thousand dollars for repairs in my calculation over the entire time I lived in each house but a few thousand dollars wouldn’t have change the scenarios outcome sufficiently enough to have changed whether the home ended up being an asset or a liability.
Also, the fastest way to scratching your head and saying, "where did the money go" is to NOT include all the "...but a few thousand dollars wouldn’t have change the scenarios outcome sufficiently enough to have changed...".
PM me sometime and I'll show you an example of what I mean. - 3yShiloh LundahlPro MemberRental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
@Joe Villeneuve maybe you didn’t watch the video. The video I referred to was the video on determining if a primary home could be considered an asset or not according to Robert Kiyosaki’s definition of an asset putting money in your pocket when a liability takes money out of your pocket.
- 3yJoe VilleneuvePro MemberPlymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
Sorry, I just clicked on the link to that podcast, and read the transcript, but the reply I made to your comment above is still valid...based on that comment.
- 3yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
Personally, I don't want any 'nomad' type people living in any of my places anyway....that mindset is trouble (IMHO). And some people like me are born 'owners'. I think the feeling of freedom these nomads are seeking is much higher when you are in control of your own destiny....
- Member since 2019 · 7k+ posts · 4k+ votes3y
Quote from @Rob Chiang:
I am perplexed. I finished up an hour long deep conversation with someone and they tried to convince me why their decision to RENT and have the option of "being a nomad without owning anything" was the way to go. Being a renter gives them the freedom to travel and live anywhere they want. Working remotely means they can live in any city they please as well.
My question was "what income stream will pay your rent and all of your expenses when you get sick?" That question didn't really seem to bother them, so I wasn't creating a new investor today.
If this is how the younger "rent everything" generation thinks, we might end up with 75% Renting and 25% owning in 10 years.
Taking it 1 step further, as Landlords, what sort of accommodations/amenities are you putting in place to make these "nomad" tenants happy to rent your properties?
this is very common for milleneal/gen-z born after 1998, netflix generation.
basicaly it's much more beyond that: everything is on-demand , no commitment, free trial is ok lifestyle :) - Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes3y
Quote from @Rob Chiang:
I am perplexed. I finished up an hour long deep conversation with someone and they tried to convince me why their decision to RENT and have the option of "being a nomad without owning anything" was the way to go. Being a renter gives them the freedom to travel and live anywhere they want. Working remotely means they can live in any city they please as well.
My question was "what income stream will pay your rent and all of your expenses when you get sick?"
Being on the other side of owning too many for 20 years, I can see how a minimalist lifestyle could be attractive. A portfolio or your own home can be an anchor and a burden. Many times as I am working on places, shoveling snow, mowing, raking leaves etc have I wished I was just a renter of a condo.
I bet your deep dive convo person was also single? That can seem attractive at times as well to family people.
But if you have goals larger than yourself or want to be truly free and job optional, sacrifices and investments must be made.
Freedom to (move) is different than freedom from. Your friend has freedom to.
Freedom from (the man, a job, etc) is true freedom.
- 3yTheresa HarrisPro MemberMember since 2019 · 15k+ posts · 11k+ votes
To each their own. If they are going to be moving a lot, buying doesn't make sense. I also know a few people (in their 40s) who don't want the responsibility of owning a home and would rather rent their entire life. Not something I'd do because having a home that is paid for when you retire is huge especially for people who have a very limited pension.
- Member since 2020 · 671 posts · 937 votes3y
Sorry. I didn't watch the video, but I'm curious to know if you looked at opportunity costs? If @Eliott Elias is renting, but using his surplus savings to buy other investment properties, he's very likely to come out ahead versus simply owning his own home. Obviously, it would then be a comparison of the fictional house he'd buy as an owner occ vs. the investment property that he did buy. As mentioned, he'd have increased flexibility as a tenant and as long as his investment rents increased proportionally with the property he's renting, it'd be a wash.
Having said that, I own. Well, the government owns it (taxes that never end), but allows the bank and myself to claim ownership for the moment...
- 3yShiloh LundahlPro MemberRental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
@Chris John you are posing a different argument which is what is the highest and best financial use of my capital. Renting and deploying capital in lucrative real estate deals rather than putting into a primary for a down payment will likely get you a better return if you do it right. However, the question the video answers isn’t what would be the best use of the capital. The video answers whether or not a primary home is an asset according to Robert Kiyosaki’s definition of an asset putting money in your pocket while a liability takes money out of your pocket.
- Real Estate Broker · New York, NY · Member since 2020 · 2k+ posts · 1k+ votes3y
Hey @Rob Chiang - it depends on what phase of life most people are in. Once they reach the point of wanting to settle down and own a piece of their own land, they're usually more open to purchasing vs. renting. Renting gives people the flexibility to move around and transplant every year or so - something very attractive to young people.
I don't personally think people in the future are going to keep renting forever, most people want to buy a house when they've hit that point in their life where they're also mature enough to understand the benefits of ownership.
- Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes3y
Give the customer what they want--reap the profit.
3 little pigs, one built a house out of straw, one out of wood, and one out of bricks--now they all go for market rent and landlords own them.
Th Hippies started out like this too...carefree living on the "Streets of San Francisco" selling incense and peppermints.
Then supposedly (as the story goes) they morphed into hard working yuppies who most went broke when the economy changed to the dot com in the early 90's.
Then in the 90's (when Harley Davidson Motorcycles was struggling for sales, to the public the Yuppies all become "Successful" New York stock brokers who rode Harley Davidson Motorcycles--until sales picked up--then silence (now they call them Boomers --having been hippies or not).
And battle hardened Gen X of the middle eastern wars does not exist...so it seems....(yet they do).
It doesn't matter what the current generation does, (or Pop Culture claims it's doing), just make money, turn a profit, stay in business through the downturns and the upturns will fill your bank accounts.
Give people what they want and make a profit doing it.
Just my 2 cents.
- 3yJay ThomasPro MemberReal Estate Agent · Houston, TX · Member since 2021 · 1k+ posts · 715 votes
It's really interesting how life stages can factor into a person's decision making. Young people are enticed by the freedom that renting provides, but when you hit a certain point in life that changes and owning property is seen as an attractive option. It'll be interesting to see how this trend continues over time!
Having the ability to move around freely is invaluable, but so is having something that you can call your own. It's a balance of weighing the pros and cons of each decision to find what works best for every individual. No matter what happens in the future, it looks like renting and owning will still be a viable option for many!
Hope this helps! :)
Good luck!
- Rental Property Investor · Beavercreek OH · Member since 2018 · 422 posts · 970 votes3y
Quote from @Joe Villeneuve:
I own, but Your first point on how Owning doesn't make you any money is a truth most people don't understand. We are told from conception, usually by REA and lenders (I wonder why them?), that your own home is the greatest investment you'll have make. Do the math. Compare the same home as your own home (owned) and as if you were renting it to someone else. Put in all expenses, who pays them, all income from all income sources, Equity at start and built up through appreciation, and separate them by who pays for each, as in the source pf the funds,...i.e. the rent money is the source of funds for the mortgage, so the tenant is actually paying for it. Now, project the cumulated totals for each year,...and tell me if your own home is your greatest investment or expense.Quote from @Eliott Elias:
I personally rent and own 10 rental properties. 1. Owning my home will not make me any money 2. I can be flexible and can break the lease no matter how the market looks 3. I don't need to do any maintenance
Joe,
You are absolutely correct that owning a home is a liability and can eat income like crazy. While I agree 100% that taxes, insurance and other upkeep are expensive, if I rented I'd be paying a landlord a sufficient rent to more then cover these amounts in nearly every instance, plus his mortgage principal amortization.
Since, personally, I prefer a home that is nicer then most rentals and like the idea that the home is mine to do as I please, I choose to own.
As a RE investor, with over a 150 paid off doors, (antithetical to you Joe, I'm aware) I know how to purchase RE at a discount. As a consequence, my current home bought in 2011 and paid off 2 years ago, has appreciated by 150,000 minimum. This is pretty substantial in the Midwest. This amount of appreciation (tax free if I sell) has covered 90% of my taxes and insurance for the past 10 years.
Further, I now have a paid off asset worth nearly 800k. I, fortunately, don't currently need additional funds or income. If I did however, It is nice to know it's available to me through a sale, reverse mortgage or refinance.
Respectfully,
Gary
- Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes3y
from the perspective of a primarily urban dweller with friend in tech/biotech etc--the average high paid young professional with virtual work capabilities thinks of themselves as basically an independent contractor even when they have a job. They have to. They will have 5-8 jobs before age 40 and moving on is the way to get ahead.
Being flexible, able to relocate is a benefit. The "nomads" tend to be high income, low maintenence tenants
A lot of real estate's appeal is that it can be a huge benefit over time. People who grew up with the 1-3 job average in the same area could count on real estate compounding for them. Different cost benefit analysis now for many
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes3y
@Rob Chiang
I know people who have rented their entire life because they didn’t feel the need to own. They also have made considerable money, done well investing in businesses and stock market and now pretty much do what they want. There are other ways to do very well without owning real estate.
7e investments53 Reviews - 3yJoe VilleneuvePro MemberPlymouth, MI · Member since 2013 · 13k+ posts · 19k+ votesI think you're missing what I'm saying with regards to everything I'm saying. LOL. The explanation may be a bit involved here so PM me for a better one.
Quote from @Gary L Wallman:
Quote from @Joe Villeneuve:
I own, but Your first point on how Owning doesn't make you any money is a truth most people don't understand. We are told from conception, usually by REA and lenders (I wonder why them?), that your own home is the greatest investment you'll have make. Do the math. Compare the same home as your own home (owned) and as if you were renting it to someone else. Put in all expenses, who pays them, all income from all income sources, Equity at start and built up through appreciation, and separate them by who pays for each, as in the source pf the funds,...i.e. the rent money is the source of funds for the mortgage, so the tenant is actually paying for it. Now, project the cumulated totals for each year,...and tell me if your own home is your greatest investment or expense.Quote from @Eliott Elias:
I personally rent and own 10 rental properties. 1. Owning my home will not make me any money 2. I can be flexible and can break the lease no matter how the market looks 3. I don't need to do any maintenance
Joe,
You are absolutely correct that owning a home is a liability and can eat income like crazy. While I agree 100% that taxes, insurance and other upkeep are expensive, if I rented I'd be paying a landlord a sufficient rent to more then cover these amounts in nearly every instance, plus his mortgage principal amortization.
Since, personally, I prefer a home that is nicer then most rentals and like the idea that the home is mine to do as I please, I choose to own.
As a RE investor, with over a 150 paid off doors, (antithetical to you Joe, I'm aware) I know how to purchase RE at a discount. As a consequence, my current home bought in 2011 and paid off 2 years ago, has appreciated by 150,000 minimum. This is pretty substantial in the Midwest. This amount of appreciation (tax free if I sell) has covered 90% of my taxes and insurance for the past 10 years.
Further, I now have a paid off asset worth nearly 800k. I, fortunately, don't currently need additional funds or income. If I did however, It is nice to know it's available to me through a sale, reverse mortgage or refinance.
Respectfully,
Gary
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