question for experienced landlords

[mordecai]

My girlfriend and I will be renting out the bottom unit of our duplex and moving upstairs beginning October. We're fixing the upstairs unit at the moment, and would ultimately like to rent that out as well and move elsewhere.

My question is how much more than the cost of maintenance on the home (mortgage, taxes, insurance, some utilities, etc...) makes it worth it to rent out our property? Given the rental market in our area, we could probably make at least $500 above these costs to rent out and maintain both units (minus any unexpected plumbing, electrical, or other problems). is this worth it to move out and find our own place? thanks

 

[MetroStyles]

That's impressive...you must have put more than 20% down. I made some quick financial projections in Excel and figured I could never recover the costs of owning by renting out, at least not in NYC without a lot of money down.

 

[mordecai]

We put down 20%, but also got a pretty good deal. The neighborhood is very desirable to a certain niche and duplex's are hard to find here (Franklin Hills). The house is on a steep hill and is over 80 years old however, so we do expect that if we rent it out, we may end up paying for repairs on some things that we would've just lived with. We'll also probably have to deal with some strife between the two tenants and with our somewhat crazy neighbors. Just trying to figure out if it's worthwhile. This first tenant downstairs is going to be the canary for gauging our abilities as landlords.

 

[Don Carlos]

When and if you move out of the building altogether, take into account how much time you're really going to have to be the landlord. Because trust me, buildings need a full-time landlord or manager. They are like two month old babies. They can and will keep you up all day and all night, demanding all of your attention. A popular solution is to contract out to a management company or hire a manager. Then, of course, you'll need to factor that stuff into your costs.

 

[Blackhood]

Well if you can find somewhere else to live then you'll be making $500 a month spending money.

The usual equation is: can I afford the Bills (mortgage/utilities) for 6 months when both my tenants run away without paying? If so, you're in a good place to keep a second property and income feeding you money.

If on the other hand that $500 per month will go towards paying for the mortgage on another house ... well then you're back at square 1.

 

[texas_jack]

buying property with a girlfriend is your first mistake.

 

[Suave]

Originally Posted by texas_jack

buying property with a girlfriend is your first mistake.

women are so spiteful

 

[mordecai]

Originally Posted by Blackhood

Well if you can find somewhere else to live then you'll be making $500 a month spending money.

The usual equation is: can I afford the Bills (mortgage/utilities) for 6 months when both my tenants run away without paying? If so, you're in a good place to keep a second property and income feeding you money.

If on the other hand that $500 per month will go towards paying for the mortgage on another house ... well then you're back at square 1.

that sounds like good advice, thank you.

 

[Rambo]

Originally Posted by texas_jack

buying property with a girlfriend is your first mistake.
+absolutely

 

[SpallaCamiccia]

Originally Posted by texas_jack

buying property with a girlfriend is your first mistake.

Sure, I bought an impressive penthouse with mine and she left me alone with the 1650 euros monthly mortage .

 

[MetroStyles]

Originally Posted by SpallaCamiccia

Sure, I bought an impressive penthouse with mine and she left me alone with the 1650 euros monthly mortage .

Impressive for 1650? Where? Kosovo?

 

[crazyquik]

Be very selective with your tenants. It will save you money, time, and headaches in the future. Very selective.

 

[dragon8]

Originally Posted by crazyquik

Be very selective with your tenants. It will save you money, time, and headaches in the future. Very selective.

I agree.

 

[bigbris1]

Make sure at least one of your tenants is handy with a hammer/wrench. You can offer incentives for minor repair work done in your absence.

 

[ter1413]

Originally Posted by Rambo

+abso-fukkin-lutely

(Fixed!)