If anyone has any questions, feel free to email me at okiedokiedoo@hotmail.com. I can’t promise speedy responses. But would love to hear from you.

Signing off,

Scott

Thank you for your insightful comments on landlording.

I think your posting raises several important points:

1) Tenant quality matters:

As you clearly point out, renting to students means that your place will get trashed. Also, its been my experience that renting to poorer people is more of a hassle. Tenants who are on public assistance tend not to be the ideal clients for your real estate business.

2) Controlling expenses is important:

Paying $400.00 to maintain your house in a manner which makes it an attractive rentable place to get the right kinds of tenants sounds like its really expensive. I have heard that a good way to save money is to be a do-it-your-selfer.

I’ve had mixed success with this. For some things, its great, but for some others, its been a near disaster!

3) Management Proximity:

One thing I think you rightly point out is that you need to be close to your investment property. The place my fiancee and I have is about 15 minutes on foot from our apartment. Its quick so we can pop over there to do whats needed. Driving three hours sounds like a total pain.

Lastly I wanted to point out a couple of other interesting things about your posting. I really like the fact that you mention the importance of a low loan to value ratio when making your purchase. It sounds like you’re able to make some money because the mortage is relatively low. Second, I wonder if you’re taking the depreciation of your property and your capital gains into account. Both of these matter.

Okay, to shameless plug my own blog, you might be interested in having a look at my profit/loss calculations for our investment property:

http://dinksfinance.blogspot.com/2006/06/is-our-real-estate-profitable.html

Given capitol gains and rental income, we’ve made about $75,000 on our place.

Finally, you might consider checking out John T Reeds site. He’s got some really no nonsense books on managing rental real estate. I reccomend his stuff.

http://www.johntreed.com/realestate.html

Best,

James

I agree with your comments comments regarding much of the literature about investing in (usually) residential real estate either for either quick renovation and sale or renting. Many books and articles make it sound a lot more rewarding than it is and understate the costs, the risks and time committment needed.

My own experience over a period of ten years has been largely positive. I have only regretted purchasing two properties (the first two that I purchased which could be viewed as a learning experience) which were difficult to let and were disposed of after a few years (one at a loss and the other at a much smaller capital gain than I had hoped for at the time of purchase). Subsequent purchases have all worked out resonably well for me. It has not been a “get rich quick” experience, but the rents generally get paid on time and capital values have appreciated. Certainly, there have been occasional short term vacancies and regular outgoings and maintenance – but these are all things to be expected when owning a rental property.

Guest-blogger Julie Ali writes a riveting expose about the issues of being a rental property owner. But what I love is the cyclical attitude of people towards renting. It’s “why pay the mortgage for the landlord” vs. “it’s more economical to rent”