Home buying first time, humbly asking advice

[NoHaveMSG]

Originally Posted by Irace86.2.0

Really? Wow. We both have over 800 scores, have long/stable/high incomes proportional to our rent, no criminal history, don’t smoke/party/play loud music, have a clean rental history and had impeccable references. We do our own maintenance and have even made reversible improvements to the property. Humble brag: you mean to say not all renters are like us?

I realize the bar is low, but a credit report, rental report, criminal background check, income verification, and interview can all go a long way. We have a vacancy that hovers around 1-3% in a fairly affluent area, so finding renters isn’t hard, but I’m sure there are some meth-head tweakers that slip through the cracks of even the most thorough screening.

We have had background checks not catch things, we use a different company now that is pretty good. Many of our renters are low income low credit score, or young families. About half of them don't have bank accounts, they pay rent with money orders. We have several instances a year where they claim to have paid rent but didn't, so we end up going to court to show our records and rental account transactions. They don't have a bank account so they have little to no paper trail unless they manage to keep the receipt for their money order purchases. Since judges tend to side with tenets, the burden of proof always falls on us. Other landlords are also willing to lie and give a good report to get rid of trouble tenets too. The next thing you know they are not paying rent for 5 months, removed all the trim and doors out of the house to paint them(against our rules), and let the lawn grow two feet tall and threw a couple dozen giant river rocks around the lawn to fuck up our mower. Oh and in OR any back utility bills go back on the land owner. We have had to pay back water/sewer bills of 600+ before. We now have it setup so that we get a copy of every utility bill so we know if they are behind. I'm just about out of it now. You want to make some real money with less effort, get into storage units.

[Atmo]

Originally Posted by NoHaveMSG

You want to make some real money with less effort, get into storage units.

Especially RV storage where you lease out dirt by the foot and have a waiting list, what I'm doing after spinning off SFH rentals. Or REIT's specializing in storage facilities.

[Spuds]

Originally Posted by Irace86.2.0

Who says I’m not?

I’m not.

I was a grad school dropout. My career in personal training and management was lucrative, but not reliable enough to make any long term commitments. I was looking at homes when the 2008 crash happened. Had to cash out my 401k and Roth IRA at a loss and start over like a lot of people. Changed careers in favor of a reliable paycheck. Moved. Retook classes that had expired for nursing. Got married. Now I’ll be starting nursing school. I’ll be 41 when I start my nursing career. My sister has been working as a PICU nurse since she was 23. Luckily, my great grandma lived to 102 and my grandpa to 96, both without meds, pacemakers, heart procedures or orthopedic replacements, where the both played golf in their 90’s, so if I have those genes, which seems to be the case, then it is like I am in my twenties, right? Well no.

I started a Roth IRA when I was 16. If I hadn’t had such a hard hit from the recession life would have been very different. If I had gotten into nursing school in 2010 when my requisites met the standards before they changed the standards then I would have been a nurse for the last 10 years, and things would have been different. That is life. Shit happens. I invest 25% of my income and have 6 months of savings. Considering the late start or having to start over, we will likely buy once. We don’t have kids, so we don’t need to go big then go smaller. We might buy and rent to stay flexible or to be a traveling nurse to see the country, while working for a premium and to stay mobile with these fires. It is not final. It isn’t just up to me. I subscribe to happy wife, happy life, so that is a huge confounding variable. The second is wanting a big garage and a place to build projects. My one car garage is maxed out, but I don’t want to rent larger.

While I appreciate the time it takes to write your life story, I don't really understand the primary message of the response.

You aren't doing the thing you are suggesting someone else do then? You could still buy a rental property and have it paid off by the time you retire if you up the payments just a bit, you aren't that old. It doesn't sound like OP is in a much different situation, as I think he recently changed careers too iirc(?).

[WildCard600]

Originally Posted by Spuds

While I appreciate the time it takes to write your life story, I don't really understand the primary message of the response.

You aren't doing the thing you are suggesting someone else do then? You could still buy a rental property and have it paid off by the time you retire if you up the payments just a bit, you aren't that old. It doesn't sound like OP is in a much different situation, as I think he recently changed careers too iirc(?).

I don't think Irace is trying to advocate that everyone should be doing it, just that it's something that people might want to crunch the numbers on the feasibility as a potential option. Unless I've misread somewhere.

My wife and I have been looking at land on and off for a couple of years now with an eye on it being our potential retirement location. If it were possible for us to buy something and then lease/rent it out and have someone else pay for the yearly taxes and small bank note we are planning to carry on it that would be fantastic. Raw land is a bit harder to do that with outside of maybe a hunting lease. But with todays litigious society I doubt the risks would be offset by the potential income.

[Spuds]

Originally Posted by WildCard600

I don't think Irace is trying to advocate that everyone should be doing it, just that it's something that people might want to crunch the numbers on the feasibility as a potential option. Unless I've misread somewhere.

My wife and I have been looking at land on and off for a couple of years now with an eye on it being our potential retirement location. If it were possible for us to buy something and then lease/rent it out and have someone else pay for the yearly taxes and small bank note we are planning to carry on it that would be fantastic. Raw land is a bit harder to do that with outside of maybe a hunting lease. But with todays litigious society I doubt the risks would be offset by the potential income.

If that is the case, I think very few people are in a position where the buy a home as a rental while you are renting a home yourself strategy will be superior to others.

I remember hearing about someone leasing a few acres of field to a farmer. That could be a possibility if it's the right land and zoning. Or logging.

[WildCard600]

Originally Posted by Spuds

If that is the case, I think very few people are in a position where the buy a home as a rental while you are renting a home yourself strategy will be superior to others.

I remember hearing about someone leasing a few acres of field to a farmer. That could be a possibility if it's the right land and zoning. Or logging.

We are looking way up in the backwoods of New England so not a lot of prime farm land, lol. Logging might be an option but that would be more of a one and done type of deal. Unfortunately we can't afford any vast tracts of land where logging could be sustained over multiple years.

[p1l0t]

Originally Posted by WildCard600

We are looking way up in the backwoods of New England so not a lot of prime farm land, lol. Logging might be an option but that would be more of a one and done type of deal. Unfortunately we can't afford any vast tracts of land where logging could be sustained over multiple years.

Lease to the loggers, and then when they clear it to the farmers? But I'm pretty happy not landlording anymore.

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[SexyPirates]

Isn't BlackRock buying a bunch of single-family homes and renting them out? I see a lot of force pulling supply down while demand is heating up

[p1l0t]

Originally Posted by SexyPirates

Isn't BlackRock buying a bunch of single-family homes and renting them out? I see a lot of force pulling supply down while demand is heating up

Yeah a buddy of mine has been trying to buy a house desperately because his three daughters are getting to old to share a room. He is offering 25% over asking price and getting beat by cash and no inspection offers. I assume these are mostly corporations. They are loving that small time landlords are either (luckily as in my case) cashing out or (unluckily in other cases) going broke because of the no evictions. People might think it's great now but they will pay more in the longrun when housing become monopolized. I'm mixed feeling about that, but the real shame is the people who can't afford to buy a home anymore because of it. I feel like they are more innocent victims of situation caused by others. It's also like Elon Musk says though, "If you don't make the stuff there won't be any stuff." Building came to a near stop because of material and supply issues for a while during the pandemic and we are still playing catch up.

Meanwhile in China they are building empty apartment buildings just to artificially keep up their ailing GDP. Ironic part is 2nd and 3rd homebuying is starting to outpace 1st time home buyers. You would think communism would be more fair but apparently their rich/poor divide is worse. I guess it's only good on paper.

Sorry if this is a semi-politcal statement or philosophy but it seems to me like no matter who you are or what country you are from the free market is the best market. No matter how we try to manipulate them (even with the best intentions) it always comes back to bite us when we do.

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[Spuds]

Originally Posted by p1l0t

Yeah a buddy of mine has been trying to buy a house desperately because his three daughters are getting to old to share a room. He is offering 25% over asking price and getting beat by cash and no inspection offers. I assume these are mostly corporations. They are loving that small time landlords are either (luckily as in my case) cashing out or (unluckily in other cases) going broke because of the no evictions. People might think it's great now but they will pay more in the longrun when housing become monopolized. I'm mixed feeling about that, but the real shame is the people who can't afford to buy a home anymore because of it. I feel like they are more innocent victims of situation caused by others. It's also like Elon Musk says though, "If you don't make the stuff there won't be any stuff." Building came to a near stop because of material and supply issues for a while during the pandemic and we are still playing catch up.

Meanwhile in China they are building empty apartment buildings just to artificially keep up their ailing GDP. Ironic part is 2nd and 3rd homebuying is starting to outpace 1st time home buyers. You would think communism would be more fair but apparently their rich/poor divide is worse. I guess it's only good on paper.

Sorry if this is a semi-politcal statement or philosophy but it seems to me like no matter who you are or what country you are from the free market is the best market. No matter how we try to manipulate them (even with the best intentions) it always comes back to bite us when we do.

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The housing market is going to crash pretty hard once evictions and foreclosures pick up again.

[EAGLE5]

Originally Posted by Spuds

The housing market is going to crash pretty hard once evictions and foreclosures pick up again.

A crash is unlikely. People are not overextended on high-interest-rate debt like they were before the last crash. The housing market is high because there's a lot of money floating around looking for a place to rest, and there's not a lot of inventory compared to the need for housing.

[EAGLE5]

Another think driving the housing market is large companies scooping up cheaper houses to then rent out. They're both pricing the low end peeps out of the market and then driving up their rents. It's a classic capitalist fuckjob. If a crash does come, it will be because the people who rent these homes end up refusing to pay, the math goes badly for these companies, and they end up bankrupt and sending large numbers of homes into foreclosure. The question is, are these companies buying enough of the market to cause widespread issues?

[Sapphireho]

here in idaho, with all the cash buyers coming in from other states, and a lot of small cities and towns (like mine) putting moratoriums on new building to try to slow down growth, inventory is very low. Prices just keep climbing fast. My house here has gone up 78% since I bought 2 years ago. Crazy.

[Irace86.2.0]

Originally Posted by EAGLE5

A crash is unlikely. People are not overextended on high-interest-rate debt like they were before the last crash. The housing market is high because there's a lot of money floating around looking for a place to rest, and there's not a lot of inventory compared to the need for housing.

It is true that we don’t have a bunch of overextended, high interest rate owners that will trigger a chain reaction in the market, but you don’t think there is a large population of home owners and renters with outstanding balances? Unless there are protections or grants provided to these populations, we should see a huge rise in evictions, and we should see a large increase in foreclosures or homes going on the market. I don’t think it will cause the recession we saw in 2008, especially because supply is so low and demand will still be there, especially from housing firms, foreign investors, etc. We will see what happens.