Posts Tagged ‘rental property’
The Agony of The Landlord
Posted on: September 5, 2013
A physician client of mine called me the other day and asked my advice as to whether she should evict the tenant currently residing in her condo. This is advice I hate to give. Let me explain.The tenant is a single mom with two young children, whose estranged husband just stopped paying child support because he is officially unemployed, but the tenant believes he is getting paid under the table.
My heart goes out to this tenant, I would never want her and her children to become homeless. But my head tells me that if my client lets her stay for free, she would most likely wind up staying for free forever and my client’s rental property would become a toxic asset.
So what should I advise my client?
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Also see Top 10 last month.
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Also see Top 10 last month.
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House for sale
Last week, my wife found another fabulous piece of real estate to invest in. It is a two bedroom/one bath bungalow. It is a 10-minute walk from a metro (subway) station and 15-minute walk from lots of amenities.
It is a short sale; the bank-approved asking price is only $155k. The land is about 0.3 acres adjacent to a park and is worth more than the entire asking price.
It is a very interesting investment decision for us. Let me list the pros and cons.
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1. Be Careful When Buying a Condo as a Rental Property
Also see Top 10 last month.
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3. Be Careful When Buying a Condo as a Rental Property
1. Profit from Harry Dent’s predictions? Think again
Also see Top 10 last month.
Get my white paper: The Informed Investor: 5 Key Concepts for Financial Success.
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House for sale
My wife and I own a couple of rental properties, so I feel like I am qualified to give my 2 cents worth on another way of investing in real estate – owning rental properties directly.
Now let me be clear: owning rental properties is a business; it is no longer an arm’s-length investment. It is great for some people, people who are hands-on and disciplined, but it could be a disaster for others.
When we posted a notice to rent out our townhouse, the first person to answer was a single mother with three kids. My wife checked her credit – it was bad. When my wife said no to her, she could not hear the pleas of my bleeding heart: Rent it to her! She has three kids to take care of! We’ll waive her rent if she can’t pay!
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Lease agreement
I wrote about our rental property investment six months ago. We purchased the property for $180k, and we are earning a monthly rent of $1,750. That’s a great investment, with cash-on-cash return of 8% after taxes and HOA fees.
All was hunky dory until recently when we got a call from our tenant, who told us he lost his job and he was only able to scrape together $875 to pay for half of the rent.
We told him we appreciated his effort, and we hoped he would get another job soon. Deep down, we are really not sure how long our rental property will be nonperforming.
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