UnThreaded | Threaded | Whole Thread (29) | Ignore Thread Prev | Next
Author: canuck104 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76101  
Subject: Re: Probably just a stupid question... Date: 12/18/2011 10:21 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Thanks to all who replied -I really appreciate it.

I get all of the risks presented in all of the posts, much of which can be mitigated by using a good property management company and doing your homework before you buy (just like when you buy a stock). Also, I failed to mention in my original post that I was only considering multi-unit properties not single-family homes. Multi-units are generally easier to buy/sell because there is less emotion involved -it's almost purely a business decision.

As for mitigating risks, for example, my rentals are managed by a very good property management company -I called almost every one in the area and was very rigorous when interviewing. These guys were the best hands down and only take about 9% of the rents/month, but in return, they screen the candidates very well (forced a tenant with a dog to move out after one month after a spot inspection found their dog had gone to the bathroom on the floor), I pay nothing if an eviction is needed, and their licensed/insured maintenance personnel charge about $28/hour for repairs....which I consider competitive.

I also only buy in "desirable" areas, and only do deals where I can net in the neighborhood of a 10%-ish Cap Rate. So there is quite a bit I can control.

Things I can mitigate but can't control are tenant damages to the property (mitigated by carefully screening the tenants), neighborhoods that start to decline (mitigated by frequent visits to the area), the onset of a "renter's market" (this presumably happens over time....time enough to get out(?), but with it being so difficult to get mortgages at the moment, how long before this actually happens?). Tenant vacancy can be mitigated by keeping the property in good repair and charging rent that is a little less than market conditions warrant.

The people I know who own rentals and who haven't been successful have been friends/acquaintances that have not used property management companies, but rather done it themselves. This trend is unmistakeable -although I know there are exceptions to every rule (as one reply stated, sometimes property management companies suck, too).

As for selling an investment property quickly, this too can be mitigated by buying at the right price such that even if you have to sell quickly, you get your money back (or most of it anyways). For whatever reason multi-unit investment properties always seem to sell no matter how badly the market does.

So, for those of you who invest in high-yield dividend stocks, what kind of dividends do you typically get, and how consistent have the payments been over the last few (tough) years. Do they consistently return a 10%-ish cash flow and if so, can you please point me to some I could look at?

As an FYI I have been a TMF premium subscriber for years and never shy away from paying for good advice, so if you can recommend a book, course, or subscription service to look into, I am more than open to it.

Thanks in advance!
canuck104
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (29) | Ignore Thread Prev | Next

Announcements

The Retire Early Home Page
Discussion on accelerating retirement day.
Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Post of the Day:
Apple

Wal-Mart Nixes Apple Pay
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement