Buying and renting

7 Replies

I'm looking for any advice on buying and renting. Looking to purchase my first property and rent it out. Is there anything I should look into and watch out for when getting into this business? I heard all the stories of bad tenants and that I'm not worried about. I'm more in this to give back and help others who can't get a house because of credit and other factors. Just want a little more info from other investors experiences and anything will be greatly appreciated, thanks. 

If you're not in it for the money you can't go to wrong I guess, don't get me wrong I love the idea of helping others afford a place to call home, but if you do want some cashflow from the property and you want to create a business it's all about buying right. Runs the number real well and maybe for your first one don't buy the worst/cheapest house on the block. 

If you are in this to give back you should still be worried about bad tenants and those bad stories. You will want to help the good tenants who are on the right track but can't qualify anywhere else. You can help them get into their first place and establish a good rental history. If you get a classic bad tenant you won't be helping them, and you won't be able to help very many. 

Screening is still VERY important. You will want to set up your screening criteria to target those people who need a little help getting established.

BUT since you asked for my opinion, I would do your charity work in other areas or with housing organizations that are already established. I do a lot in other organizations but I run our rentals like a business. Doing this allows me to help even more people in areas I am more passionate about. In the rare case that I help a tenant out, it is one that has been with us for a while and I know their hardship is real. If possible I do it anonymously because I don't want to change their relationship with their firm but fair property manager.

I would say make sure you can take the emotion out of screening. You said you want to help people with bad credit get a place to live but just remember don't sell yourself short or fall into an emotional pitfall. If you stick to your guns and make sure you have a strict screening criteria you will be fine.

Hi, Tyler.  You may want to check out my profile, BP member blog, and podcast, since we are investing with a purpose.  Agree with what others are saying, it is difficult.  And good objective screening is important.  You might want to read Buy and Hold Forever, use that strategy instead, and use your profits to fuel a charity.  The books I've reviewed on understanding poverty may be worthwhile reading for you as well, those are on my blog.  Thanks for having the heart to tackle affordable housing issues, just make sure you go into it eyes wide open and with realistic expectations.

Originally posted by @Tyler Letinski :

I'm looking for any advice on buying and renting. Looking to purchase my first property and rent it out. Is there anything I should look into and watch out for when getting into this business? I heard all the stories of bad tenants and that I'm not worried about. I'm more in this to give back and help others who can't get a house because of credit and other factors. Just want a little more info from other investors experiences and anything will be greatly appreciated, thanks. 

 By all means, give back, use your intuition about a tenant, and the first time the property is wrecked and you have a $3-5k bill to put the house back together again, you'll realize that giving back is not a good way to go.

Been there, done that.

It all comes back to screening. Screening screening screening. Felony record, keep on walking, eviction on your credit record already, keep on walking, having a proper job with verifiable pay slips, these things all matter.

And yes you can rent to lower income people, we do it all the time, and for the most part they are good people, despite what some people say on BP, but no matter how much I like you, I will still screen you, I will look at your credit record, and I am interested in felony records.

People will be on their best behavior when you first meet them. However, none of them dodge that screening bullet.

Hi Tyler,

I recommend hiring a real estate agent to represent you in the purchase of the property and to find you a suitable, responsible and qualified tenant. Leave it to the experts to explain the pluses and minuses of each property, as well as with each prospective tenant. Ask the agent to explain the nuances of everything, as this is the best way to learn. Watch the professional and soon enough you will know the ins and outs, too. Best of luck!

Best,

Barry

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