All Forum Posts by: Jasraj Singh

You have to crunch the numbers.

In my town, the average price of a single-family home is $265,000 but that kind of home will only rent for $1,800 - $2,000 a month, at best. A four-plex costs $350,000 but will only bring in $2,800 in rent. Those are less than the 1% rule of thumb and unlikely to produce proper cash flow unless I can buy them off-market for low prices.

There are other markets where I can buy a house for $150,000 and rent it for $1,800 for a much better return.

It can be very profitable, and our current model depends on it. Harder to find deals that cash flow well and thus harder to scale. But the big benefits are on the exit and the tenant solvency. You will likely sell to an owner occupant rather than a cash flow investor, thus bringing appreciation more into play. And things tend to be better cared for, better quality etc. I wouldn't try for the most expensive area, but rentals that cash flow in heavily owner occupied areas, especially those with good schools and walkable downtowns are a great thing. Different approach.  3 bed 1 bath (or 2) houses are great rentals. When you are in a heavy rental area you are essentially pricing a commodity. In heavily owner occupied you are pricing a value choice.

It wasn't designed to be a big money maker. The 50/50 split works well in that we didn't have to buy the machines and when they break down the company comes out and fixes or replaces them for free. Our cut covers the water and electricity/gas and also makes a little money, but not a lot. We could probably raise rates a little and still be fine, but the building is extremely close to a laundromat. Therefore, we view it more as a convenience instead of a money maker. 

Try watching this webinar and ignore the "turnkey" sales pitch unless your are into turnkey investing: https://www.anymeeting.com/Web...

@Jasraj Singh I think like Alex mentioned real estate agents and property managers.  They may have different motives.  For example I would get calls from people in my area all excited about vacation rentals because their real estate agent said they could get x dollars per night.   Well it's not that easy, for example in my area people would stay on average shorter times than they would in other vacation spots, more turnover makes it that much harder to fill every night back to back.  So now maybe its 22 nights a month versus the 30 the agent told them they would get.  Then they didn't want to do the work but they wanted to hire me.  Then when they found out my rates(to do all the work for them) all of a sudden the number the agent was telling them weren't so good anymore.  I would even get some agents complaining to me why did I tell the clients that.  I no longer do vacation rentals but I did it because I wanted them to know the truth and set realistic expectations.  I wasn't trying to make the sale for the sake of making a sale.   Outside of asking agents there may be some consumer sites like mashvisor, rentrange, corelogic that you could get info from.  Maybe even zillow.  Not sure.  The one thing with any of these sites to consider is that they don't usually have 100% of the data so it doesn't give a true picture.  This would lead back to my original advice of inflating a little to factor in worst-case scenarios and smooth out the long term averages.  For our properties and ones we manage for others our vacancy rates have been below average for area and industry as a whole, so I also believe that when run properly you should be able to keep vacancy rates low.  (this probably applies more to a pool of properties versus a single property where you might experience some bad luck such as a random off month where renters aren't looking but you have a vacancy to fill.  One last thought might be to check in with an appraiser and see what info they have.  However, I know appraisers call me sometimes for there info which leads back to they are getting it from real estate salespeople and property managers.  Good luck with your investments and hope any you have stay 100% full :)

This is common. I think we split revenues around 50/50. The company even kicked in money to remodel the laundry room. The 50/50 split doesn't make a lot of money, but it can cover the cost of water and electricity. 

The units that I provide a w/d I have in the lease that it is for the use of the tenants that live there, not anyone else. Don't want them to invite their friends over for free laundry. I also put in the lease it may take several weeks to repair or replace if they break down since they are not a necessity. 

My guess on average is that you should probably inflate the number a little that someone in the real estate industry may give you.  Some of them may have access to info or they may want it to sound better than it is to get a sale.

There may be a company that does some kind of profit-sharing, much like snack vending machines. I don't think it would be worth it unless you did it to scale.

Buy a decent, used washer/dryer set that is just a few years old for under $500. You can usually increase the rent $50 a month with the machines included. They'll pay for themselves in ten months or less and then you're making profit.