justforrazors t1_ivemzhv wrote
Reply to comment by thetrevorkian in Springfield renters and landlords, what are your thoughts/opinions on how so many landlords/rental companies want potential tenants to have income that is equivalent to 3x monthly rent? by Snoo_84090
So a lot of people who haven’t owned have the same thought process, kind of disregarding the actual cost to maintain and upkeep a property. Here’s a breakdown on an actual rented property I own; what I pay monthly.
3 bed 2 full bath 2 car garage 1200 square feet $1500 monthly rent, republic mo
Mortgage: 965
Property taxes: 108
Insurance: 65
Money in reserve for repairs, maintenance, upkeep: 150
Total monthly cost: $1288
Total monthly profit $218
There are a lot of big companies who are absolutely raising rents to make more money. But inflation and supply chain means you have to pay more for maintenance; reappraisals mean taxes and insurance costs increase, etc. it isn’t entirely gouging, it’s more just a function of the world we live in right now unfortunately, and it probably isn’t as much price gouging as it is trying to not lose money.
Goge97 t1_ivforsm wrote
My parents owned rental property for years. My mom had to go in and clear out trash, scrub toilets, mop floors, etc. after people moved out. My stepdad was on call around the clock for clogged toilets, busted pipes, HVAC that needed repairing and so forth. Plus advertising and finding qualified tenants.
It was a lot of work! Plus tenants were late with payments or moved out owing money.
My parents had built up good credit to afford the mortgages on the properties they rented as well as all the skills needed to maintain them. And both of them put in a lot of work to maintain their hands-on business!
Television_Wise t1_iverwpb wrote
Your math is wrong. Because once your mortgage is paid, you can sell the house and get all the money you put into mortgage back, or probably even more. Same with repairs and improvements.
So saying "UwU I only make $200 a month off this place" is BS. You're getting a free house to dispose of later AND $200 a month.
So after all those years of "just $200 a month 😢" you're going to get $200,000 or $300,000 as well at the end (or whatever a house of that size/quality is going for in Republic).
Don't sit here and play pauper with your monthly profit BS. Add that $300,000 you'll get when you sell it to that monthly profit, what's it looking like now?
Landlords try the most BS sobstories and expect tenants to be stupid enough to believe them. But I guess it's natural for a parasite to try to keep their victim/host from getting rid of them.
justforrazors t1_ivesn35 wrote
Yeah, in a perfect world you’re absolutely correct. But just like you’re making a bunch of assumptions, what if we missed a terrible foundation issue? Or eminent domain? Or a tenant cooks meth in the property?
Mortgage paydown is the long term reasoning for owning real estate. But just like any investment, past performance doesn’t equal future returns.
I make $200 a month on a property, period. Until my crystal ball starts working properly again, that’s all I can go off of. I’d be happy to explain the tax costs of selling an investment property and show you the actual breakdown, but you’re assuming a perfect world where I don’t have to pay for a brand new hvac system, replace the roof out of pocket because insurance is a scam, or any of the thousands of other things that can go wrong in an instant.
Television_Wise t1_iveyi1w wrote
>you’re assuming a perfect world where I don’t have to pay for a brand new hvac system, replace the roof out of pocket
No, I'm absolutely not. Those are normal things to pay for over the course of owning and maintaining home. Everyone has a major repair expense at some point, bar extremely good luck. However, your property, if maintained, is likely to appreciate, which makes up for those costs. If you bought at 300k, sell at 350k, and spent a few thousand on an HVAC system? Then yeah, you're still coming out ahead. Especially since you didn't put the 300k in for the house--your tenants did, plus giving you $200 a month extra to spend.
"There's risks" yeah, that's how life works.
"Damaged foundation" something you reduce the likelihood of drastically by hiring a good inspector. You choose an inspector with a warranty in case they missed something. You know this, if you've actually bought a house before. You're pretending like it's a likely risk because you think renters are stupid and won't know about this and will think you have a real risk there.
"Eminent domain" <---- you still get paid for your property if eminent domain happens. It's also extremely unlikely to occur.
"Meth cook tenants" probably the only valid risk you've listed. Bad renters can wreak hell on a property.
justforrazors t1_ivf0h6f wrote
You clearly just disagree with landlording/property management on a fundamental level and I'm not going to convince you otherwise, so I'm not going to try to. I posted here to try and offer some insight to a question is all.
I'm a healthcare worker that has worked covid all over the United States for the last two years, seen some of the worst things imaginable, watched hundreds of people die senseless deaths, and saved money to buy properties so I don't have to microdose trauma for the rest of my life, but I guess getting called a parasite on a bright and sunny morning is all worth the struggle, right?
The tenants I have in my homes are like family; I care about them and want them to be comfortable. A tenant had a bad situation where a family member was having health issues, I installed grab bars and hand rails, discounted their rent for 3 months (1/2 normal, operating at a loss) and helped them get set up with covid relief, OCAC, and healthcare resources for their family member. We maintain our properties just like we would maintain our personal residence, address issues quickly, have 24/7 coverage for emergency maintenence, and try and treat the people in our properties like humans.
Ultimately, you are right. I wouldn't buy real estate if it wasn't about making money. The property should appreciate. I should make more than $200 if I take care of it. It should help generate generational wealth for my children, and their children. But it could also collapse into a sinkhole tomorrow and I'd be fucked. With that said, I take pride in the properties we own and we try and offer service that reflects the care and pride we have in our properties. I don't appreciate being called a parasite for trying to offer an affordable and fair service. We are all humans, and ultimately I hope that you don't lump everyone in real estate investing together. I could much more easily have invested money into index funds and renters would just have more corporate landlords to deal with.
Hope you have a good day,
Sincerely,
A healthcare hero/parasite
thetrevorkian t1_ivf586p wrote
Well just going by what you say you are one of the few landlord who are not pieces of shit. My landlords are nice as well but are still charging me more than the house is worth and there is a special needs guy that basically lives in the shed(it’s an add on to the house but based on what my house looks like his might as well be the shed..) so who knows how much they charge him as well.
Parasitic landlords like 417 rentals(not who I use just an example) used to be far and few between now they are par for the course.
Again as I said I’m all for making a profit but this is ridiculous.
justforrazors t1_ivf7f7w wrote
Yep, I totally understand the sentiment and I'm used to it at this point; it just still hurts when you try to do something positive and are immediately lumped in with assholes. When I explain my business model to people I use Chris Gatley/417 rentals as the antithesis to my goals.
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I rented for 8 plus years prior to being able to afford a home and it wasn't always great. I remember renting a SFR that leaked from the roof every time it rained, and every time we complained the "maintenence guy" would come out with a bucket of tar and "patch" it. Never helped. We lived for three years with an in-ground pool that had a ripped liner and it became a literal cess-pool/mosquito breeding ground; we had to call the city to declare it a hazard before the owners agreed to have it filled in. I'd like to think I learned something from my experience renting, and we just try to be fair folks that don't take advantage of other humans. There are others out there; its just unfortunate that so many people with ill intent and no morals take advantage of folks for their own gain. We aren't trying to get rich, just be comfortably middle class in the midwest.
thatHungarian t1_ivf1xft wrote
How many rental properties do you own? Seems like you hating on a person who made a decision to buy a house and be a land lord. You know with risk comes reward at the end if you lucky enough..
I'm sure you heard the term long term investment. Same principle as the stock market works...are you hating on everyone who has a 401K because by time they retire they hopefully have at least a million in their account?
Matter of fact anybody you give your money for a service or product, you are actively helping their financial goals. So are you hating on everyone who is a business owner? Or only on land lords?
thetrevorkian t1_ivf68vp wrote
On anyone who over charges for services or goods. I live in the shittiest pet of town, my neighbors house got Molotov cocktailed two months ago and they are charging almost double what this house was going for 2 years ago. Plus whatever they are charging the mentally handicapped person who lives behind me. It’s dumb.
The house isn’t worth the money, they know it and we know it but there’s nothing we can do because it was the cheapest in the size we need.
I don’t mind paying money if what I am paying for is worth it.
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