Anyone here a land lord?

[-stew-]

I'm thinking real hard about buying a duplex. This is gonna be my first home. I like the upside of it being a future investment. Also Im angling this as a cheap and easy way to get a house with a big garage. Anyone been down that road and have any advice to offer?

[animal]

From my friend's mouth, if you find a decent renter that actually pays on time, make it worth their while to stay. i.e. lower rent a bit to keep them wanting to stay longer, cuz at least you'll get regular money even though it might be a little less.

[Nickerz]

I know 3 landlords, and 2 of them lost money on their properties. You will need to heavily research the economics. What you can expect to get for rent, general vacancy rates, no pay rates, cost to evict etc. The up front view doesn't match the business end. Further more, you'll need to understand even though you live next door to them that you will at a moments notice need to switch from "normal person" to "land lord." Which means when you want to go out with your family on a Saturday night and the toilet isn't working you're calling an emergency plumber to give your credit card. etc.

My take on the matter is that you'll need to approach this like any other investment. 90% of the stuff on the market you'll lose money on. 5% of it you'll break even on, 4% you'll come out ahead and 1% you'll make a huge return on. Look for the 1% and what will ultimately happen is you'll fall somewhere between breaking even and making money. That's just how it is in the business world.

Real Estate is competitive like most markets. Do the math before you even consider anything else, then accept if you're willing to run a business. If all of that matches up, go for it.

I considered the same thing and honestly I think you're making a smart decision if you do your due diligence. My other half wasn't willing to live next to someone so we never did it, but we're considering renting our house out when we move.

[JOHN 86GT]

It can be good ... bad...

My friend has had a upper/ lower for 15 years or so. (In a lower end of Racine) (paid $98,000 , now paid off)

He lived upstairs , renters had no access to his garage or use of driveway other than grilling out etc.

Most of the tenants have stayed 1-3 years on average and have been good.

Even the best and cleanest renter will leave crap behind that you have to get rid of.

He has had to take a few to court and was out court costs as well as not getting paid yet.

His advice is you have to be stern. Sometimes the "career renters " will try and push the rules .

One renter "I just want you to know I'm buying my husband a puppy for our anniversary " she knew he did not allow dogs .

He does not let TV dishes to be bolted to the house because you may have to remove it when they leave or are evicted .

The worst was a few years ago. He was at his job (FD) and the renters caught the place on fire . They had no renters insurance and it caused over $200,000 to the house and his stuff.......

[PonyKiller87]

I've been a land lord since 2005, started out living in the lower, renting the upper. In 2011 we moved out and rented the lower out also.

Overall its a pain in the ass and it adds more stress to your life than its worth. Between dealing with shitty people that don't pay or trash stuff, or just the trivial bickering between tenants... it all adds up to a bunch of stuff that you will get tired of dealing with after a few years.

Everyone talks about how easy it is as long as you get good renters, but when you get down to it maybe 5% of renters are really decent and most of them are looking to buy thier own place eventually.

Not to high jack your thread but I have a Duplex in Cudahy that will be going up for sale towards the end of summer, PM for details if intersted. It does have a 3.5 car garage that I used to hog all to myself, now its split between the tenants.

[The Shaolin]

You mention it's your first home...you can pretty much forget about getting anything except a single dwelling house unless you're paying cash. There are probably others that can chime in with personal experience, but from what I remember, to get financed for a duplex you pretty much already have to own a house.

[-stew-]

I've been a land lord since 2005, started out living in the lower, renting the upper. In 2011 we moved out and rented the lower out also.

Overall its a pain in the ass and it adds more stress to your life than its worth. Between dealing with shitty people that don't pay or trash stuff, or just the trivial bickering between tenants... it all adds up to a bunch of stuff that you will get tired of dealing with after a few years.

Everyone talks about how easy it is as long as you get good renters, but when you get down to it maybe 5% of renters are really decent and most of them are looking to buy thier own place eventually.

Not to high jack your thread but I have a Duplex in Cudahy that will be going up for sale towards the end of summer, PM for details if intersted. It does have a 3.5 car garage that I used to hog all to myself, now its split between the tenants.

How well were you vetting your tenants? I'm not calling anyone a liar, but I can't believe its that hard to find people who pay their rent and don't trash the place. I can see it renting a dump in the hood. I don't buy that only 5% of renters are decent. Not interested in buying in Cudahy, but thanks for the heads up! A three and a half car garage is tempting!



You mention it's your first home...you can pretty much forget about getting anything except a single dwelling house unless you're paying cash. There are probably others that can chime in with personal experience, but from what I remember, to get financed for a duplex you pretty much already have to own a house.

My mortgage guy said a duplex shouldn't be a problem. Going to see him tomorrow to get some hard numbers and get a preapproval letter. Going to look at a duplex tonight.

[Wagonbacker9]

How well were you vetting your tenants? I'm not calling anyone a liar, but I can't believe its that hard to find people who pay their rent and don't trash the place. I can see it renting a dump in the hood. I don't buy that only 5% of renters are decent.

My understanding is theres really only so much you can do, because otherwise you start to risk a descrimination suit.

And I think you're absolutely right, you can do a LOT to put yourself in a better situation by having property in an area (and of the type) where you're more likely to get people that are more likely to be respectful. The last place I rented was in stallis, and I'm confident I was the best renter he will ever have (this is not because I'm awesome, but because that area attracts a lot of crap, my neighbors were skeezy as hell).

[JOHN 86GT]

You mention it's your first home...you can pretty much forget about getting anything except a single dwelling house unless you're paying cash. There are probably others that can chime in with personal experience, but from what I remember, to get financed for a duplex you pretty much already have to own a house.


You have to have enough income to cover the whole mortgage because the bank wants to make sure you can pay your bills without any income from the renter. They know that it won't always be rented .

[PonyKiller87]

You have to have enough income to cover the whole mortgage because the bank wants to make sure you can pay your bills without any income from the renter. They know that it won't always be rented .

I was a first time buyer when I got my duplex and all the bank wanted to see was 3 months of reserves in the bank to cover mortgage/insurance/taxes. I didn't have to do anything to show that I knew what I was doing or that I took a class... As long as you live in the place a lot of the investment property rules go away.


As for vetting tenants, I did what I could. Call employers, past landlords... My last go around I actually did credit checks which really didn't seem to help much. Even people that seem decent can turn out to be bums after they get settled in for a year or two.

The other thing, I found that it was easier to not live there and see what was going on every day.

Another thing I suggest is get the landlord kit from Wisconsin Legal Blank, its on 35th ish and Wisconsin. They give you the "Rule Book" for being a landlord / tenant in WI and all the forms in carbon copies that you will need to do a lease. They also do a class once a while, but I didn't do that, just watched a youtube video and figured I was good.

[-stew-]

The bank wanted you to have cash reserves before writing the loan?

[blackmage]

The bank wanted you to have cash reserves before writing the loan?

not uncommon, I just bought a house last fall and needed the same thing.

[-stew-]

Like cash on hand, or 401k money?

[blackmage]

cash in hand. I had plenty in savings, so that sufficed for the loan company.

[PB86MCSS]

I'm also a landlord, yippee. Here are my ramblings, hopefully it helps anyone considering the idea.

I bought a duplex with a friend of mine in 2007 in StAllis just as the market was beginning to drop, so we thought we had a good deal. We rented the upper out and lived in the lower and a little after getting married my wife and I bought our own house, last February, and shortly after that we began renting out the upper in addition to the lower at the duplex. My friend moved out a few months later buying his own place not too far from the duplex. We went in thinking similar to you, good place to live for awhile and keep it as an investment and in many ways, it's working out exactly as planned. Although we didn't anticipate the housing bubble bursting so we have no choice but to rent it out, probably will be another 7-8 years before we aren't upside down. But if goes as planned we'll keep it much longer. It sure was cheap living the way I had it setup, owning with a friend plus renting the upper out the whole time, especially once we re-financed.

My tips: You should be pretty handy, good in dealing with people and also don't mind piddly work, i.e. cleaning between tenants, doing yardwork, maybe snow removal, showings, leases, posting on CL, etc. Things don't constantly break that you need to be worried about going on vacation IMO but having someone you know and trust that's handy would be key in case or if it's above your comfort/skill level. Owning it with a friend it's nice we can share the responsibility, even though I do the majority of the actual work :rolleyes: since I'm much more handy and also pickier. I try to have some sense of pride in the property even though we no longer live there too but you're not going to see us dump money into it just because. We never had a tenant trash anything just basic cleaning and once minor drywall repair from moving. Most stayed one year but had a couple stay two years in the upper. Currently have one tenant on her third year, she moved downstairs after we moved out. Our tenants have been pretty good to awesome to be honest never a bad one, knock on wood.

In the almost 7 years we've never had one month of vacancy or unpaid rent. Only a few times was a tenant a little late on rent, we worked with them, I don't think we ever enforced a late fee. Finding tenants has been easy, at least for us, just using CL. I worked for a property management company in my first job in my "career" so I had access to air tight leases and other forms, plus learned owning a rental property wasn't a big deal. Owners of the company I worked for had several duplexes and 4 family units in addition to the others we managed (plus mostly condo associations). I also think you can kind of pick tenants as they pick you. They can see how you are, how the place is, etc. so hopefully you avoid some turds if you come across normal yet someone who doesn't take crap. We started the credit check thing the last few years but I don't think it tells you much for renters. The landlord references, CCAP and verifying employment/$ is more important IMO.

I also assume buying a rental property now compared to pre-housing bust is a different animal. But since you'd be living there not purely as a rental maybe not. All we needed were the basics as in buying any home plus very little down. Re-financing was another story, once the market tanked we tried unsuccessfully a couple times to re-fi then due to the HARP2 program, I believe it was called, which threw out the appraised value it went through. Dropped our interest rate over 2% so now our rents cover the mortgage, escrow and water bill that we pay. Not a positive cash flow but that's ok, as long as we have some continued "luck" with tenants and nothing major happens to the house, the tenants paying our principal down is nice. Plus property taxes leveling off has been nice.

There are definitely pros but also cons. Sometimes I do get the feeling of "I don't want to deal with this crap" but it's usually a couple times a year something occurs, plumbing issue, etc. plus I go over about once a month to clean up the weeds/trimming/cleanup yard stuff as one tenant just does basics of cutting the grass/snow removal and she does pull some weeds even though she doesn't have to per our agreement. Then re-renting whenever that occurs, that takes time with taking calls/emails and setting up showings, many of which won't show up.

I always assumed there would be some work involved just like owning any home. Living at the home was easier for obvious reasons, one less unit to worry about and living there made repairs easier, more inviting to work on (you already are there and can take your time somewhat) and tenants probably will behave a little better if your there. Cons are sharing a home with someone you may or may not really get along great with. We got along with everyone but not always people we would prefer to share a space with, so some noises (loud sex) and smells (one tenant and his gf smoked weed a bit) you had the fun of deciding to put your foot down or look the other way. Have to have some sort of balance I think.

So yea, to sum it up, can be a pain and sometimes I wish I didn't have to deal with it but it really isn't a big deal and (hopefully) down the road it pays dividends.

[Irish]

They also want to see that money has been hanging out in your savings for awhile.

My wife and I were gifted a decent chunk of money prior to getting married. The bank wanted to know where it originated from lol..

When it comes to finances, finance companies get really nosey. Understandably so for the large sums they lend.

[kevcuda]

Pretend you never asked, slowly close your laptop and back away.

[-stew-]

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