BEWARE!
When I read the Milin’s book over a decade ago, it left me with a vaguely uncomfortable feeling. Some of their tactics just didn’t seem quite wholesome. And didnt they get indicted on some REI scam last year?
See my post below titled “Mr Landlord” for a couple book reccommendations. You might also consider “The New No-Nonsense Landlord” by Richard Jorgensen
Another caveat. Landlording isn’t as easy as it might at first seem. (I’ve been doing it for 20 years). If you buy a house and rent it for a little over the monthly payments, you’re going to lose your shirt. You also have to consider taxes and insurance, maintenance, repairs, advertizing, etc. You should set aside at least 10% of rents for a “replacememtn reserve” to handle big things like the roof or furnace or the hole the tenant’s car left in the side of the house. And don’t forget to allow for a maintenance fee. Even if you do it all yourself, your time is worth something and you deserve to get paid. After all that is figured in, you want to build in cash flow. On my rentals, I shoot for 20% positive cash flow after all expenses.
Howdy:
Try not to laugh too hard at this question, but I am just
looking into the rental property game. I live outside of Austin, TX, which is going through a big growth spurt right now. Property values and rents are raised regularly.
So, I have been reading a book entitled “How to Buy and Manage Rental Properties” by Irene and Mike Milin. Supposedly they have a lot of knowledge in this area.
One thing they said got me to thinking. They made the point that you should try to buy properties that you yourself would rent, where there are good schools, shopping, etc. So, where I live, in Cedar Park, I have found that to be the case.
One street over from me is a house for sale. It is about the same size house as the one we are living in. I went by and picked up a flyer. Of course, they are wanting $140k for it, but it is only 4 years old, and presumably in good condition.
So, say I wanted to buy this house to rent it. I know right now I don’t have the 20% downpayment ($28K) just sitting around in a checking account. So, what are my options? Is this house just out of my league? I believe, though I do not have hard research, that I could rent it out for more than the monthly note.