All Forum Posts by: Laniece Miller

I assume your HOA allows rentals, because I've heard some don't or only allow a certain percentage. When I bought my townhouse last fall, even though I live in it now, I wanted the option.

I listened to RDPD on a long drive. Definitely something to be taken with more than a grain of salt.  I think the big take away for me is the rich think about money differently and play be a different set of rules than those with "earned income". I did not really see the details of how the rules are different just that they are.

I'm not trying to sway you away from REI, but as someone still getting my feet wet too, be careful of shiny object syndrome. If you haven't already take the time to learn what's involved in being in real estate, because there is a lot of hype around how lucrative it is, but not as much about the blood, sweat, and tears. Just my two cents from another newbie.

@Scott Schultz @Randall Katesthank you much for feedback on how my estimates for costs may be off and how I might want to think about how to calculate how much it costs to hold property.  At this point I know it's really more of an exercise than anything, so I'm looking to learn all that I can.

one mistake I realized, when I subtracted my principle and interest from my total mortgage payment, taxes and insurance run closer to $400

I also had it pointed out, that having insurance for a rental is less than a primary residence

I think I'm more curious on my estimates for repairs and cap ex.

As someone who's seriously starting to look for their first rental property, is being a landlord worth putting up with some of the weirdos?

So I only own my own home and are starting to seriously look at buying a rental. I was doing some looking at what was for rent in my neighbourhood. and a few streets over is a property where the asking rent is $300-400 over market rent in the area. My initial thought was to contact the owner and asking if they wanted to sell, especially as it appears to have been listed for rent for about four months. However, my first stab at the numbers don't make it sound reasonable to even pursue contacting the owner, though there are several rentals in the community. Based off my house which is in the same HOA my rough estimates are:

ARV is about $130k

Rent would be in the $1300-1350 range

taxes and insurance run about $475

maintenance would be about $130 (10%)

cap ex $130 (10%, property is about 40 yrs old, most exterior work is covered under HOA)

management $130 (10%, planning on the possibility to hand it over to a manager)

vacancy $130

HOA is about $175

This totals costs to be about $1150-1200, which doesn't leave room for a mortgage.  

How far off base am I?

Craig,

You might check out CAREIA, which meets in Lisle, with other events, including a cashflow game in Lombard.  You can find information on meetup.com.

Overall, BP is a good site.

I've been lucky in that I've actually found a non-profit REIA in the Chicago area that isn't full of pitches, and it's been a good place to network. Several of the people I've met have even let me bounce ideas off them as I purchased my first primary residence (the only property I have so far). On the other hand, I know a lot of REIA's out there are designed to make money to the point I even listened to a podcast (not BP podcast) where the guest was indicating he 'owned' a REIA.

I guess my short answer is it depends on the specific group.

I would ask at you local REIA for more information, and possibly a local attorney who works in landlord law. I'm working towards buying my first property as well and I know the laws differ even within the state of Illinois, as Chicago appears to have stricter laws than some of the surrounding 'burbs, especially those not in Cook county.