All Forum Posts by: Thomas S.

Don't work with tenants make them work with you. Set dead lines and force tenants to comply. If you do not they will have you chasing your tail.

Drop off the new leases, give notice of when you are changing the locks. Tell them if they want the key they will be there when you change the lock. You will be signing the new lease at that time. If they need to pick up the key tell them to bring the signed lease with them. (I hope they are M2M leases).

Never give options if it can be avoided.

Management of your business needs to be done to simplify your life.

Dreams and rainbows are chased by idiots.

My advice would be to put your enphasis on building your career. Is it better to start and then move in 5 years or start where you intend to stay working. Are jobs today even consider long term.

Make your decision based on your career not your plans to invest.

My preference is to invest in purpose built rental properties. A multi plex wins hands down every time over a SFH.

As a professional you should have the ability to find employment else where, preferably some where less expensive, and relocate. You won't regret getting out of the rat race. You can then benefit from a higher wage in a less expensive investing market. You could invest long distance but would be much farther ahead relocating yourself.

Investing in real estate is a second part time job. To fit it into your family life you sleep less and make time with your wife as time working on investing.

If you can not balance work with family you will need to wait to invest until you have more time. The deeper you get into investing the more time it will take. You will not have the luxury of putting your business on the back burner. Ask anyone that has started their own business, 18 hour days, missed kids sports and school plays. Family suffers to build a successful business. Having a young family makes starting a business much more difficult. You will need a very understanding spouse.

One SFH should not be too much of a burden.

"I found out the house is Haunted"

Nope, you found out your tenant is crazy.

You are in a difficult situation. You do not have the skill sets to be a landlord which means you can not manage the business. If I purchased a property with a tenant like this I would inform them that rent was going to full market and allow them time to choose to stay or go. Because I operate a business my goals would be to maximise rents immediately. If they stay great if they leave I eat the cost of a turn over and get a good tenant that can afford the rent. This has my business producing at 100% efficiency asap.

In your situation I see no reason to rush anything. It is operating fine as is so you need to speak to your mother in law an see what she wants to do. Keep in mind it is not a business for her. She will likely not want to raise their rents or force them out so there is nothing for you to do. I do not see the income as being particularly important to her since they did set the rents.  Ask if she will agree to annual/reasonable rent increases and let it hum along. 

If she were to pass the game would be different.

I believe one of the biggest expenses for many landlords is actually long term tenants. Landlords will tend to keep there rent below market, due too being poor business managers, and as a result silently lose thousands, if not tens of thousands of dollars as well as devalue their properties at time of sale. Rents below market are the silent expenses that many complacent landlords continually eat.

It can obviously be done and is done by highly conservative investors. The most important thing to understand is that when paying down a mortgage on a rental property instead of the property generating the income it is actually your own money that generates the cash flow. You must determine how much actual value you place on your own money. If you desire a 10% or better on your money paying down a 4,5,6% mortgage will never produce a 10% return. It will produce a 4,5,6% return at best. To maximise your returns you must use leverage.

The down side to tying up your cash in a income property is it limits your rate or growth and your ultimate return on your cash. If return does not matter than parking cash in real estate has only one other negative. It could attract those unscrupulous indivulaes that will target your assets with a law suite. Properties with high equity, in a LLC or not, will be a target.

There are many financial advantages to owning multiple leveraged properties over owning fewer paid off properties. If however you are a ultra conservative investor those advantages are irrelevant.