I'm about to buy a rental property

[Droopy]

I'm 2 hours away from making an offer on a rental property. I'm not rich, though. I don't have a ton of money in the bank. Between my home and the rental I would control about $90,000 worth of real estate. So, as you can see, it's going to be a very modest beginning, but I hope it is the beginning of a new career.

Of course, there is no guarantee that I will get the rental. I got outbid on one just last week. So wish me luck.

[Callalily]

1. Good luck with your

capital adventure!

[Droopy]

2. Thank you. I've been playing Monopoly and brushing up on my skills.

:D

[Deep13]

3. I'm so sorry.

As long as you know what you are getting into I guess.

[CaliforniaPeggy]

4. My dear Droopy!

Best of luck!

And do let us know how it goes, OK?

:hi:

[siligut]

5. Good luck and I second Calpeg’s notion, let us know how it goes! nt

[Droopy]

9. I certainly will

I just sent Peggy a private message wondering why my real estate threads only get a few replies. Then I come back here and see all of you guys making a liar out of me. :)

[lost-in-nj]

6. Good Luck Droopy!!!

Hope this works ou for you!!!!!


:hi:


lost

[Crazy Dave]

7. Insurance, insurance, insurance, a good lawyer and insurance!

Not just property insurance but liability insurance too. Get the rental property and it's revenue into an LLC or Inc. Then get ready for the first time a renter or one of their kids slips and falls in "your rental property's" bathtub or breaks their ankle on "your rental property's" steps, you may still lose a lot of money but you won't lose everything.

A broken ankle back in 1992 set-back a friend of mine the cost of his tenant's medical bills and $6000 in damages.

[Droopy]

11. Ouch!

Yeah, I was reading up on insurance all morning and believe you me I'm going to have my ass covered.

[Crazy Dave]

13. Good luck

But I cannot stress enough about putting the property and revenue into an LLC or even better, incorporate. Anything that limits your own personal liability.

[Lex]

15. A million dollar umbrella policy

attached to the property and yourself at the minimum. It's not terribly expensive actually.

[Lex]

8. One of the best long-term investments I made

but I'm also glad I decided to let a local property management company deal with the day-to-day management of the place.

[Droopy]

12. What did your property mangement charge if you don't mind me asking?

I've heard the going rate is 10% of gross revenue, but my relator informed that her agency does it for half of the first month's rent then anywhere between 15% and 18% of the gross revenue. It would certainly be less of a headache and I think I could live with 10%, but 15%-18% seems a little steep to me.

[Lex]

14. 10% of the monthly gross rent & it's a tax deductible expense.

It's worth it imho.

[BarenakedLady]

10. Good luck.

:woohoo:

[tigereye]

16. nice to see so many good things happening for you!

:hi: