Some People...

[R.K.]

It has paid for my daughters college, with a little left over. You can make money on them but I'd have to have 100 units to make a living at it. At that point it would be a full time job.

Sad part is, capital gains taxes could easily wipe out any money you make on the sale of the property.

Capital gains only hits a percentage (20% or less) of the price increase. Yeah, it sucks. But it shouldn’t wipe out any profit. Unless you played risky games with the depreciation…

 

[Gut Shot]

Capital gains only hits a percentage (20% or less) of the price increase. Yeah, it sucks. But it shouldn’t wipe out any profit. Unless you played risky games with the depreciation…

Depreciation is what wipes you out. Commercial property is depreciated out over 22 years IIRC. You could end up paying capital gains on the entire sale price.

 

[SAJ-99]

While renting does suck at times. You have to figure this kind of thing in. Good renters and bad ones. Just like any other business. I had two other houses when the wofe and I got married and bought our new house. Things like these renters here is why I opted not to do it. It sucks but sooner or later you know it's coming especially apartments etc. Its never all profit.

More just a comment on my Nothing Passive About Passive Income theory.

Sad part is, capital gains taxes could easily wipe out any money you make on the sale of the property.

If this is case, I’m not sure you’re doing this right.

 

[R.K.]

Depreciation is what wipes you out. Commercial property is depreciated out over 22 years IIRC. You could end up paying capital gains on the entire sale price.

But that means you got the advantage of the depreciation being deducted from your income over the period you deducted it. Typically that wipes out the highest marginal income tax bracket (22-24% for most people). Even then- depreciation that is recouped during the sale is only hit at 25% tax from what I can tell.

But I'm not a CPA, definitely not a lawyer. I could be completely wrong on all of this. But it seems that selling for higher than you bought would be a benefit.

 

[Steiny77]

Have heard this story many times. Good friend of mine is in the business and deals with it frequently.
Makes you appreciate the good renters who take care of things. When it's time for rent increases, give the good folks a break, they're worth keeping.

 

[Nuts]

My mother in law has rented for a very long time. I am thinking she has been in the same place for 25years give or take. If she moved out today the place could be rented as is other then dated. Spotless. Immaculate. Rent always early. As a result she pays 50% or less of market rate. He rarely has increased it since she started. The landlord has a lot of apartments paying much more. She is his longest tenant. Folks don't realize they also cost themselves money as well being pigs

 

[Nick87]

The farm next to our place is rented out. (The house) I can't wait til that bunch of scum bucket shitbags leave. Then I wonder if maybe it'll get worse so I better shut up.

 

[MtsPSU]

Sorry you had to deal with the dirtbag family. It’s part of the business—never fun, but it is what it is.

My wife and I have a few rental properties—both houses in college towns. The one we bought for our kids to live in to avoid the room and board charges and crazy meal plans by the university. The eldest is finishing his final year of PT school and has two roommates that are also grad students. These guys are the best tenants—partly because my son knows if they weren’t he’d pay the price.

The other is an Airbnb and boy could I share some stories. Great income but you get some real shit bags despite screening for them. Football weekends and other big university events are great paydays, but it seems the more people pay the more entitled they get with leaving the place a dump. We get 1-2 renters a year that leave you scratching your head on how can they be so disrespectful and disgusting to someone’s property.

We’re in the process of selling the Airbnb property now and the other at the end of the year. It’s time to take the equity and possibly 1031 it into something else.

We are both in mid 50’s and looking for a little less to worry about.

Mark

 

[Carnage2011]

I’ve been fortunate with renters and haven’t had any major issues. When I bought my first rental I sat down with a friend who owns hundreds of doors and asked him about screening. He gave me all kinds of info but the one thing me said that has always stuck with me is that he meets prospective tenants in the parking lot when they show up to look at the place. If their car is a mess or full of garbage he doesn’t even give them a chance. If they can’t take care of their own vehicle then they won’t take care of your property. A clean vehicle doesn’t guarantee a good tenant, but a messy one guarantees a messy tenant.

 

[Gellar]

I’ve been fortunate with renters and haven’t had any major issues. When I bought my first rental I sat down with a friend who owns hundreds of doors and asked him about screening. He gave me all kinds of info but the one thing me said that has always stuck with me is that he meets prospective tenants in the parking lot when they show up to look at the place. If their car is a mess or full of garbage he doesn’t even give them a chance. If they can’t take care of their own vehicle then they won’t take care of your property. A clean vehicle doesn’t guarantee a good tenant, but a messy one guarantees a messy tenant.

According to that logic I would have been homeless in my renting days.

 

[Addicting]

A 750 deposit is not steep enough to weed out rift raft. The punishment of loosing it doesn’t hinder the behavior.