Rentals - Posted by michael

import · September 19, 2003, 9:02am

Posted by Felix on September 23, 2003 at 10:09:29:

I find sec 8 rent is about 90% of what the open market is (though HUD says it’s at 110%), they can limit the security deposit, and good luck if you need to evict. My experience has been that sec 8 tenants tend to cause more property damage as well.

import · September 19, 2003, 9:02am

Posted by michael on September 19, 2003 at 09:02:51:

I need to know if anyone has had any experience buying and holding property in low income areas. I have found that I can get property cheap and have a good positive cash flow from these properties.

Do you think this is a good idea or not.

Thanks

import · September 21, 2003, 7:36pm

Re: Rentals - Posted by ken

Posted by ken on September 21, 2003 at 19:36:47:

Taka a look into a rooming house. Hugh cash flow but management intense

import · September 19, 2003, 4:23pm

Re: Rentals - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on September 19, 2003 at 16:23:07:

Michael------------------

I encourage you to buy in as low-priced a neighborhood as you can stomach. You’re right, the lower the price, the higher the rents as a ratio of the price.

But some people seem to be uncomfortable in lowend properties.

I screen rental applicants carefully. About 85 % are lieing about where they live, where they have lived, from whom they rent, or from whom they haver rented. Those people I do not rent to.

Good InvestingRon Starr**

import · September 19, 2003, 11:26am

Re: Rentals - Posted by RichV(FL)

Posted by RichV(FL) on September 19, 2003 at 11:26:28:

Michael,

Lower income rental units can be money making machines for those with the stomach for it.

Keep in mind property managment on these rentals can be task within itself, but if you are up to it you can pull in a significant cash flow for yourself.

Great Success,

RichV(FL)

import · September 19, 2003, 10:11am

Re: Rentals - Posted by Shawn J. Dostie

Posted by Shawn J. Dostie on September 19, 2003 at 10:11:26:

I like em’. I live in a rural town of about 12,000.00 and buy duplexes up for approx 15k-20k per unit depending on condition. I prefer SFR’s at 25k-30k. I don’t use metro (section 8) with the exception of on tenant who’s been there since before I bought the prop. They cashflow well and the cost of emptiness is less than the fancy areas. it does take a special personality type to do this however. I "visit most of my tenants around the 1st of every month and chat with them. I make more money than they do, but they feel they can talk to me. I don’t get up tight if they don’t have it on the first, and most of them pay by the following friday. I’ll work with them and let them know that even when it comes to the point of eviction time, they will be treated with respect. I’ve found that life is much too short and valuable to be spent in anger or worry.

Good Luck,
Shawn(OH)

import · September 19, 2003, 9:46am

Re: Rentals - Posted by Marcos

Posted by Marcos on September 19, 2003 at 09:46:28:

Low income rentals are a cash cow for those who can handle it. Honestly most people can’t handle it. I have had both. To me the extra cash wasn’t really worth it.

There are numerous problems with low income rentals. They have been discussed ad naseum here. Hal Roark from New Orleans who no longer frequents here was a specialist in Section 8 rentals. Most everyone else will tell you not to bother.

Realize that on paper, low income rentals look like they will cash flow like crazy. However, the costs associated with collecting these rents can easily be double to triple a more affluent area rental.

If you are a very rigid and disciplined landlord, you can be successful in low-income rentals. That seems to be the secret to success. Sometimes however the low-income rentals can be a godsend. I had a quad in a pretty bad area, where one of the tenants had been there for 22 years, and another 14 years. Another quad, had two tenants who had been there for six years each. So, if you find the right tenants, and that’s the biggest problem, and you provide them with quality housing at a decent price, you can make cash hand over fist. However that’s easier said than done.

I recommend you go to www.mrlandlord.com and ask the question there, or check the archives.

HTH,

Marcos

import · September 20, 2003, 8:49am

Re: Rentals - Posted by Felix

Posted by Felix on September 20, 2003 at 08:49:52:

I have to admit that cash flow is nice, but dealing with the tenants is a nightmare. On average 99.9% will lie on their applications, and you can bet that 98% will try and stiff you on last months rent. Oh yeah, about 97.5% will leave your property with serious damage. My advice!!! First and Last months rent, + deposit, don’t accept payments. Try and avoid sec 8 if possible.

import · September 22, 2003, 7:23am

Re: Rentals - Posted by Erin (detroit)

Posted by Erin (detroit) on September 22, 2003 at 07:23:29:

why would you say to avoid section 8? I have heard that it pays better and the funds come directly from the state. If they get evicted, they lose their state funding. Sounds like a good plan, so why would you disagree?

Erin