If you were a man, in the early 2000's, with some money to burn and a pre- approval for a home loan, you may have jumped on to the bandwagon of owning Rental Property's. The idea is simple: Have Someone Else Pay Your Mortgage, and make some Additional Money on it. You may have noticed my over-usage of capitol letters on that last bit. Emphasis on Some Else Pays and Make money. Because I'm here to tell you: If you own a rental property and charge $500/ month, and your not making At Least $200 additional after the mortgage is paid,, well then it's not worth it. See the leaky sinks, the spongy roofs, and the property taxes are now all Your "business"
There are 2 classifications of renters: People who Pay and people who Don't. There's also a strange sub-culture of renters that move every 8-12 months. And they have no qualms about leaving ALL their stuff behind. I have an estranged sister and an "artist" uncle in this bracket. After my last move, I vowed to Never move myself again. Much like in a new job, everyone's nice and polite and quiet for the first 8-9 months. Even after you do a credit check, call for references, and do a criminal background check, something may get missed,,err, left Out. Then inevitably, there's a Family Emergency, or some type of "Hardship". The rent becomes late, and there may be an attempt made to"negotiate" a lower rate. Since you cannot evict after 1 month, and you don't Really want to lose your tenant, an agreement is made. After 3- 4 months of this, it can be quite taxing, and an eviction can be made. Yes, you are relying on these potential degenerates to pay your mortgage, and keep your credit clean. Not a smart gamble.
P owns 2 rental properties in a rather un-desirable neighborhood. He has been assaulted, abandoned, and severely annoyed. Fortunately the place is a bit more stable now. There is a woman living there and renting both units. Who knows how many people are living there. Apparently her cleaning business is quite fruitful, because the money orders have been coming on time, and her SUV that resembles something an NBA basketball player wife may drive, was paid for in Cash.
I have a rental property of my own, that I was extremely luckily to inherit. Although I put my fair share of blood, sweat and tears into renovating it. I spent a year un-doing someone else's "improvements". Because why wouldn't a hot tub in the bedroom be a good idea?? My tenants are pet-allergic, payment -timely, and a perfect fit for the property. I make 100% on what they pay me. This property was one of the bargaining chips going into my marriage with P. I came into the relationship with the property and profits and wanted to keep it 100% mine. I even considered having him sign a prenuptial agreement. But in the end we Both own it now, and I cringe a bit less when I type those words.
So I have a new set of criteria about owning a rental property now. It's not just enough to have the mortgage(s) covered. I want my salary covered also. If I have to take the furnace phone calls, be kept up all night, or put the For Rent sign in the yard every 9 months, this gal wants to be Paid! Or if I'm cleaning places and screening Craigslist Creepers,
I'm going to have to take some time off.