Good Talk...as my dad used to say. I have rentals in Phoenix. Fix & Rent, not as "sexy" as Fix & Flip but I think a lot more lucrative. I source my houses through wholesalers (letter writers/door knockers) and buy below market but for cash. My houses rent @ $1100-1200 range and I treat my tenants like gold. I also try and make the houses the nicest they have ever lived in. It works, all my tenants/guests are long term. Just my 2 cents. Keep'm coming, videos are great.
Doing the same thing in Athens Georgia for 25 plus years. University town so the turnover is a little higher but the same business model works here. Has been fixing and renting properties in a downtown now historic neighborhood and has acquired 75 houses and 200 units. It's pretty much all gentrified now but it's been great to watch these houses and neighborhoods come back together. I feel like I know some of properties better than their current owners.
I'm new to your channel Handyman. But I've been binge watching since I found it. For every one of us out there who doesn't have enough money to hire someone like you, these videos are very valuable. There have been a number of fixit jobs I've stumbled through because I had to. I made a lot of mistakes. But watching your videos shows me how someone who *_knows what they're doing_* goes about it. It's helping me to have more confidence in what I need to do, and I'm very grateful! So, thank you!
as a former soldier, this is exactly what I'm doing mainly because of the VA loan process allows me to buy with 0 down and I get to skip mortgage insurance.
*13:52** My fear is that the person that I rent to would damage the house and end up costing me money. My wife wants us to rent our house out, but I would hate to have to deal with a bad tenet.* *14:30** You bring up a really great point about realtors and the shadyness of the sellers market.* *The realtor is just trying to sell the place and move on to the next. *Never tell your realtor your bottom dollar or how desperate you are to sell.* *Allows remember that they are working for you and not to be confused as a friend.*
I've had friends and family have their rentals ruined - wooden flooring ruined caused by an improperly defrosted fridge upon move out and a crackhead removing the copper wiring. Vet your applicants and make sure they have a rental history.
Yup I agreed, many people do not pay attention to the housing market. Living cost are no longer reasonable for the average american. FYI I live in Southern California and house market here are crazy expensive.
As a youngster I built my first house well outside the city limits. I then purchased another approx 50 miles from the city, then another and another. Renovating and slowly crept towards the city. Now I have inner city houses, no mortgages. If you try to buy an inner city property from the start, you need an obscene level of income to afford it.
This guy is very knowledgeable. He was spot on about rental hacks. What he was describing was house hacking where you buy it for 15% to 20% down at cheaper interest rate, live in the property for a year or two, then rent. In the meantime, you can rent rooms if you're single. I just bought a house for $215k, will put about $10k to 15k in repairs, then rent for $1500 to $1600 per month. Mortgage with insurance and taxes is only $940/month. Giving me $500 to $600 month in cash flow. Cash flow isn't the reason to buy rental properties, it's equality.
I'm in Chicago, I have several rental condo's, and what the Handyman is saying about large metro area's is 100% true. I don't have a mortgage over $800(20% down), and I don't have a rental that brings in under $1800. In the metro areas I think it's a trend with millennial's (most of the city center population), would rather rent for flexibility than buy. No house, no car, etc.
Great video ! I am also in the rental game as well as GC. In my area you can still get away with paying under 100k for a decent flip and rent. Most of my clients will pay anywhere from 40-100 for a property and put about half of the purchase price back into the property for improvements. They see at least 20% ROI. All cash. Gotta find those deals and close on them fast! Would love to see more of this kind of content. Thanks !
My last rental (ever!) was a fix and rent but the guy bought at foreclosure. He paid around 200k cash and rented it to us for $1950 a month. Fixes were mainly cosmetic, bathroom fixtures, a new dishwasher, new laminate floors and carpets. I'm sure the new tenants pay more than we did too. I think he makes quite a bit of money on that place.
The Handyman I live in a small town in Kansas and I just purchased a house for $14,000. It needed work but it was livable at the time. My primary residence which is 2600 square-foot cost me $41,000
In Central PA you can get a rent-ready house for about $35k. House I am living in now for 8 years paid $600 for it and still have less than $5k into it with repairs.
The profit depends on keeping it rented and having a good general maintenance fund along with a well funded property emergency fund for unexpected major repairs like a heating system. If that is all in place, the fix/rent is a good idea. My mindset is that the property owner “me” will pay all my mortgages and when I have renters, they “refund me back” with extra. This way, I will remember to not take on anything that I cannot find myself if the renter population drops for a period of time because, renters or not, the mortgages will need to be paid. Best plan, (the one I adhere to) is that it would best to have paid for rentals so you have no mortgages at all. Much less risk.
My mom and i do both. We fix and flip and we fix and rent. Admittedly we work harder on the rental homes more than the flip, since we always sell as is. We live in Florida and we own 3 rental homes, 2 of each we own completely the other one we have a mortgage on, and i have to say not having to shell out the entire sum at once feels really good especially since you're still making a profit.
The cost of an investment property (maint, taxes, ins, etc excluded) is the current market value times the investment return on money. If you put down 100% to buy the property you can't rent it for the cost of maint, taxes, ins, etc (plus profit) just because you don't have a mortgage payment. You have to pay yourself for the money you have invested, which is the equity; not what you paid down X years ago. For example, you could sell the property, get the equity, and invest that money elsewhere to earn a return. When you invest in a property, you are doing the same thing and should get a return on the money you have at risk: the value of the property, 100% of the value of the property. You are paying interest on 100% of the value of the property, some to yourself and some to the lending institution.
I moved from CA in 2005 and do buy, fix and rent in TN while working a full time job but I was fortunate to work from home. I am now retired at 46 and living off my rental income. Yes 20% and now put 30% if I were to buy. FYI - I agree with everything you say on this video. There is company is pushing the price. 40K for than what is worth and I am waiting for them push it another 100K so I can sell and 1031 exchange pay off my other rental.
This house reminds me of one I visited many years ago in the suburbs of Chicago, Illinois. They have a special name, one side of the house is one level, and the side where the basement is has a quasi-second floor.
Nice video. Those things they had you install for closet doors where hilarious. I actually disagree with the "it´s better than nothing statement", lol. On a side note, I for one, would love to hear more about your personal dealings if you are willing. I think personal experience from a knowledgeable source is a highly valuable thing to listen to.
I agree about the things you install.. I never pic out door handles, taps toilets, door knobs, etc. I advise, but eventually leave it at clients choice. That way when they don't like it or find out it doesn't work..its on them, not me!
I have my own fix and rent and I'm seeing a lot of similarities. I purchased it at $360,000 and potential profit as a student rental is $2200/month on a $1000/month mortgage (private 'i know a guy' lender). Potential profit as a home rental is $2200-2600/month. Potential resale value is $425,000, but for me that is essentially a break even sale with the mortgage payment deficit and paid work done. So after a few years I'll have a cool 425 or more as it appreciates by 1.25% each year and I'll be able to purchase something in the low 300s, pay the work and then sell or get it rented quicker. Not something I'd take on if I didn't have my job or the savings to coast on in the intermediary.
Live in the Washington D.C. area (D.M.V) house flipping, house renting and large companies building townhouse neighborhoods on every corner . Everybody and they momma getting into the business.
You are correct about California economy in the Bay Area, that house would be between 750-850. We don't need to write any letters to buy it houses, just the price has to be right. I feel bad for people who have to almost beg to get a house which they are paying for. What state are you in?
"Gotta stay true to this channel about home improvement, not my personal dealings" ... adds link to where he poops... does it get more personal than that? Tee hee.
You said a lot of key phrases for people who are new and that is to know your markets. Plus you also have to know your numbers that's super important otherwise if you're a beginner you're going to lose money
I live in Redmond Washington and almost twice a week we get a letter about People wanting to buy our house in cash for about $50,000 over what it’s worth
Daniel Davidson will your house be worth over $50k more in 5 years? My guess is those folks have a vision of at least 5 years out. I feel we're going to hit another housing crash in 5 years myself.
2021, Los Angeles area, houses going 200 to 300k over asking (asking already around 1 million) in good school districts. Letters aren't even read at this point because people are getting such insane offers. One realtor literally stated, any offer submitted with a handwritten letter will be auto-rejected. 425 for a 400 listing doesn't sound so bad!
don't mean to ask such a broad question but how do you know all of these things, like plumbing and putting together bathroom etc? Did you go to school for this or is it just fro years of just trying new things out?
Awesome video man! Yeah it all depends on where you live, but fix and rentals, I believe, will be even more popular as millenials in general don't buy into the original 'American dream' with a house and white picket fence. Renting gives you more flexibility to move and I think that appeals to millennials and the younger generations more. I hope you do a series if you do decide to flip your rental house! Keep up the awesome work!
My friend got married and had an extra house. She didn't want to be a landlord but I convinced her to rent the house to me for the mortgage cost. 7 years later she decided she wanted sell. The rent is the area in almost triple what the mortgage was. Fortunately I was I a position to buy. Now my mortgage is the same as my old rent. Ganna rent it out when we move up.
I would be interested in the rental side of your handyman service. I plan on buying a duplex/triplex or quad, live in one and rent the rest. I'd be interested in your take
Keep in mind that rents go up nearly every year, while the mortgage payments normally stay the same. Even if you're losing money for the first couple of years, this will change. It depends on if you can afford to take the loss for the first 24 months.
It's a lot of house for the money. In town where I live I saw only 1 house below $400k. It was approx 1000 sq ft, built in 1910ish and last renovation was done maybe 50 years ago. Ah and I forgot - right next to railroad. And it is a lest 50 minutes away from the "hot spot" where all the business is.
I'm a fan of your channels and I'd be interested in seeing more learning more of everything to do with your rental im in the middle of a major remodel of an 80yr old house i inherented from my great grandmother having a family i need something bigger I've been considering renting over selling just haven't researched everything that goes into owning a rental yet would really appreciate a video on that everything about owning a rental and operating it thanks your the man ...I'm also a subscriber of your hunting channel fellow bow hunter
Hey Handyman, On the Fix and rent video, you put in goofy closet shades..can u please tell me what color blue you painted in that bedroom, please? It is kind of a wedgewood blue, real nice! Thx!
I bought a rental and fixed it up myself. Our local rents are around 600/month. Nice little drip of money coming. Plan on selling after holding for 10 years. Luckily I replaced a lot of the important things water heater furnace etc, so hopefully I’ll be trouble free for a while. Holding and then selling will make me near 100k total profit 👍🏼 I have 2 so far, my goal is 10 atleast
pocket listings are what is called when a realator holds a listing for select clients. I have never bought a house from an MLS listing and always get before they go public.
I bought a two family fixed one floor lived on it while i fixed the other floor, rented it, saved money bought another home, rented out both floors at the original property, and now we are going to rent this house, keep doign the same thing over and over so long as you draw a profit.
Here on Long Island we can only wish for $ 1550 tax. Around between 12 to 18k for 500K . This is the suburbs. So Flippers have to be very careful about taxes. Work gets done at light speed and as cheaply as possible. So your previous vid was interesting to me. I have fixed some scary stuff. Just for comparison a $ 250 000 home would run between 5500 and 8000 tax I am thinking to leave N.Y soon Lol. That house here could rent for 3000 or more. Horrible
I bought a duplex for less than $200k in an affluent (read: good schools=high taxes) New England suburb. I live in one side and rent the other, so I was able to get a low-downpayment loan and the renter more than pays for mortgage, taxes, and maintenance. The plan is to get more properties until I can replace my current 9-5 income. I wouldn't even touch something where I barely break even.
Great video! I've been watching your channel for a while now. I like your content. I have a couple of rental home properties myself, so I can relate. In my Tampa, Florida market I rent for approx. $200-$300 a month over my mortgage payment. Keep up the good work and great videos :)
Yep, that's the market. I *am* in California, just over the hill from Silicon Valley, and I bought my place in 2012. Fortunately, I didn't have to pay over asking price because it was the bottom of the post-recession market. But there was another bidder on the house, bidding over asking price, so I did have to write the sappy letter. That did it, believe it or not. The seller didn't actually care about the selling price because it was a short sale, and he was so far underwater on the place he wasn't going to see a dime of it anyway. Bought for $499k. Appraised for a refinance a couple of years later for $725k. Now, Zillow tells me I can get $874k for it. If this were on the other side of the mountains and actually in Silicon Valley I could get AT LEAST $1M for it. Maybe $2M depending on the exact location. 4 br, 2.5 ba, 2,300 sq ft, .5 acre. Inventory is a huge problem. There are just very few houses out there for sale. Pretty much all the Realtors I know say so, and they're not just whining.
Hey man I just wanted to let you know that I'm a big fan of your Channel. It has taught me a lot. I'm on my second kitchen install and I'm still trying to figure out a good price point. What is some good advice for pricing a job?
That was how it was buying my house (DC Suburbs) 2004. I had a buyer broker who was a master at the sappy letter. I was competing with 13 other families. No inspection, and I did everything short of bring a briefcase of cash and a plate of lemon squares. But I got it!
On a 30 year $300k note, with taxes and insurance, I estimate about $2200. I prefer 15 year (or less) notes on rental properties which would amount to almost $3000/month. Now consider repairs, management costs, vacancies...I wouldn't recommend this one as an investment.
I've never had good luck with rentals. The last one cost me over $10K in repairs and the renters were only there for 4 months! Bah! Fix and Flip makes more sense imho.
Hey there Handyman, great video, always enjoy them. I for one always enjoy your content and would love to hear more about you and your personal investments good and bad. Our social media friends are who we turn to more often these days for advice and knowledge. I for one would love to hear more about who you are and what makes you tick. Thanks for another great video, keep them coming. Thx 🌵😎👍
I'd be super interested in the rental house and the economics of it. If you want to stay true to your channel, you can consider having another channel for that content.
wow buying a house there sucks. I live in a 200k+ city and there is so much time for inspection and insurance and no stupid letters. you just offer a price and they take it or not. seems scummy to not allow time for inspection.
it DEPENDS on where in CA you ARE....in the big cities yes you pay much more but in the interior not so much...it is still higher than the Midwest or South
Hey Mr. Handyman. I too am a handyman. I have family members tell me to become a home inspector rather than build up my current business. They say I could make more money that way. Have you ever considered be a home inspector?
This is a great question and I have though about it a lot. I have a good friend from college that tried to be a home inspector. It is a very competitive market. Your success is all about marketing. You will have to have advertising. Most customers wont see results of your hard work like they do with the physical labor and finished product. You will have to work 10 times harder to get the word of mouth referrals. Realtors will be your number one resource for work. You will have to join realtor boards and really work the realtor business for their recommendations. My experience has been the market is flooded with home inspectors. To be a home inspector you don't need any skill. You just have to go over a check list of things to look at and take pictures of and type up a report.
$1500 mortgage payment + $850 per month property tax + $100 per month home owners insurance. Yeah, I don't know how you can make any money on a $2500 per month rental fee. Plus you have to account for all the maintenance costs.
Well that's awesome that you have rental properties man you are really doing something with your abilities and you have learned how to govern yourself very well
I rented my house once and they moved in like 5 people and sublet to them and destroyed my house. Cost me 140,000 to fix a 250K home. I lost everything I made and it cost me another 30,000 out of my pocket. Total loss after 5 years. You may want to rethink renting. Think they were RUclipsr and made videos out of the house blowing up the bathtub and kicking in the walls. AC Heating was broke and cost me 20K to replace.
How much did you put down. You might also have high property taxes. You can put my numbers into any mortgage calculator to see they are almost spot on.
That will increase your rate. If you put 20% down you can get a better rate. To buy and investment property you have to put a minimum of 25% down. the more you put down the lower the rate.
yea basically, the less you put down, especially if it's not going to be your own personal house, the more likely you are to walk away and take your losses. Once however it's your own personal home and you have say 75k invested in a 375k home. Your likely to do everything you can before filing for bankruptcy. Also IF you do file, with the 75k down, they can likely cover all the fees from repossession and repair and resale and still make a profit. At a certain point putting more down won't matter, but until then every few thousand extra you can put up to start will guarantee you a better rate.
I don't/can't understand these home prices. From my perspective, it's mind-blowing. I live in the mid-west, small rural town of 40k. $300k will buy a LOT of very nice home in a very nice neighborhood here (3-4K sqft and some land). $1M will get you a whole farm. How those folks can go into $375k worth of "slum" debt is just beyond me. I mean, we make a very good living here, but we likely could not swing that mortgage b/c we wouldn't be able to own it AND accrue wealth. And I fail to believe the difference in pay grade from here to there is that steep. I mean, do pharmacists, doctors, business owners and engineers, etc. make double out west what they do over here? I'm left to believe that home ownership for that area is much, MUCH tougher than it is here and that the level of home ownership is compromised withing the same earning brackets due to an over-inflated housing market. Frankly, I feel damned lucky as a homeowner... but, I can see where you are sitting on a veritable gold mine. I really enjoy your channel.
To answer your question about pay. Yes. People make a lot more here. My wife and I were looking to move out of this city to a smaller one. 250K people. Homes still cost $300k or more for a small house. We both would have taken major pay cuts. She was offered a job at $8 per hour less and a 50% cut in her bonus for the same position same company then what she makes in the city. The high cost of living has forced a lot of Blue collar people to relocate to other states. Most my customers have a family income of at least $200k per year.
This house in my town, Elmira NY will be no more the $200,000. My five bed, two full bath home was $117,000. It isn’t in as good a shape as this house but it isn’t bad either. I’ll stick with my area.
There is risk involved. Being a landlord or property manager can be difficult. However, if you can purchase properties like duplexes, or other multi-dwelling structures, you can rent one to cover the mortgage as you renovate the neighboring unit. Rent that out at a higher rate, pay down 75% on that property, then use the equity to purchase another similar property. It can work, if you're careful and don't mind putting in the work. My one major bit of advice to offer is never, ever work with subsidized housing entities like Section 8 or other programs where low income families rely on monthly subsidies. I know it sounds cold, but it almost always ends in unlawful detainers, court costs, lost rent, and property damages. Oh, and be prepared to conduct quarterly inspections. That's how you stay on top of unlawful occupants, drug activity/production, and pests. You can't swing by once a year and hope the place is being cared for properly.
Seattle since 2010 added 110,000 people. In portland the cost fot impact fees is $40,000. And business pays for 90% of meteo. In seattle $110b phase 3 metro all paid by employees and taxpayers. 3rd largest homeless poo in usa. WA state tax system $100 billion corp welfare and tax credits for amazon, boeing, microsoft et al. No income tax and the top 1% benefit.
This is where It happens amzn.to/2CdCMOb
If it's yellow let it mellow, if it's brown flush it down.
@ the handyman do a video about first time rental properties if it's your first time thinking about doing g it the process of it dos and don'ts
Good Talk...as my dad used to say. I have rentals in Phoenix. Fix & Rent, not as "sexy" as Fix & Flip but I think a lot more lucrative. I source my houses through wholesalers (letter writers/door knockers) and buy below market but for cash. My houses rent @ $1100-1200 range and I treat my tenants like gold. I also try and make the houses the nicest they have ever lived in. It works, all my tenants/guests are long term. Just my 2 cents. Keep'm coming, videos are great.
I'm hoping my next renters are long term. Its in a hipster neighborhood and its mostly young professionals that move in for a year then move on.
Doing the same thing in Athens Georgia for 25 plus years. University town so the turnover is a little higher but the same business model works here. Has been fixing and renting properties in a downtown now historic neighborhood and has acquired 75 houses and 200 units. It's pretty much all gentrified now but it's been great to watch these houses and neighborhoods come back together. I feel like I know some of properties better than their current owners.
I'm new to your channel Handyman. But I've been binge watching since I found it. For every one of us out there who doesn't have enough money to hire someone like you, these videos are very valuable. There have been a number of fixit jobs I've stumbled through because I had to. I made a lot of mistakes. But watching your videos shows me how someone who *_knows what they're doing_* goes about it. It's helping me to have more confidence in what I need to do, and I'm very grateful! So, thank you!
9:00 It's nice seeing someone enjoying their work and whistling. :-) Thank you for all the videos!
I think paying that much for a place to live is insane. I don't make $2500 a month. I guess I would be living in a van down by the river.
It is pretty crazy. I have a one bedroom row house that was built in 1912 That I rent out for $2525 per month.
5:15 Man...no more naked people eating ice cream on the walls? I can't believe anyone would want to paint over that! lol
I always have my radio on while I'm painting. Stops me from going stark raving MAD!
I'm interested in seeing your rental house!!
Alain he showed the garage of it in one video
Thanks of the videos, I do building maintenance at the Mirage in Las Vegas. Thinking about doing side jobs after work.
as a former soldier, this is exactly what I'm doing mainly because of the VA loan process allows me to buy with 0 down and I get to skip mortgage insurance.
yanthos nice!
*13:52** My fear is that the person that I rent to would damage the house and end up costing me money. My wife wants us to rent our house out, but I would hate to have to deal with a bad tenet.*
*14:30** You bring up a really great point about realtors and the shadyness of the sellers market.* *The realtor is just trying to sell the place and move on to the next. *Never tell your realtor your bottom dollar or how desperate you are to sell.* *Allows remember that they are working for you and not to be confused as a friend.*
I've had friends and family have their rentals ruined - wooden flooring ruined caused by an improperly defrosted fridge upon move out and a crackhead removing the copper wiring. Vet your applicants and make sure they have a rental history.
Yup I agreed, many people do not pay attention to the housing market. Living cost are no longer reasonable for the average american. FYI I live in Southern California and house market here are crazy expensive.
southern california is not reflective of the average american.
As a youngster I built my first house well outside the city limits. I then purchased another approx 50 miles from the city, then another and another. Renovating and slowly crept towards the city. Now I have inner city houses, no mortgages. If you try to buy an inner city property from the start, you need an obscene level of income to afford it.
This guy is very knowledgeable. He was spot on about rental hacks. What he was describing was house hacking where you buy it for 15% to 20% down at cheaper interest rate, live in the property for a year or two, then rent. In the meantime, you can rent rooms if you're single.
I just bought a house for $215k, will put about $10k to 15k in repairs, then rent for $1500 to $1600 per month. Mortgage with insurance and taxes is only $940/month. Giving me $500 to $600 month in cash flow. Cash flow isn't the reason to buy rental properties, it's equality.
Would love to see the rental. Really appreciate you sharing some personal aspects of your life. Outstanding job with the content your putting out!
I put the video up about a month ago.
I'm in Chicago, I have several rental condo's, and what the Handyman is saying about large metro area's is 100% true. I don't have a mortgage over $800(20% down), and I don't have a rental that brings in under $1800. In the metro areas I think it's a trend with millennial's (most of the city center population), would rather rent for flexibility than buy. No house, no car, etc.
Great video ! I am also in the rental game as well as GC. In my area you can still get away with paying under 100k for a decent flip and rent. Most of my clients will pay anywhere from 40-100 for a property and put about half of the purchase price back into the property for improvements. They see at least 20% ROI. All cash. Gotta find those deals and close on them fast! Would love to see more of this kind of content. Thanks !
My last rental (ever!) was a fix and rent but the guy bought at foreclosure. He paid around 200k cash and rented it to us for $1950 a month. Fixes were mainly cosmetic, bathroom fixtures, a new dishwasher, new laminate floors and carpets. I'm sure the new tenants pay more than we did too. I think he makes quite a bit of money on that place.
I’m doing fix and rent in a small mid west town where $100,000 buys you a A large house in great shape. It makes it hard to comprehend these numbers
Where can you buy a house for $100,000???? I'll take 5
The Handyman I live in a small town in Kansas and I just purchased a house for $14,000. It needed work but it was livable at the time. My primary residence which is 2600 square-foot cost me $41,000
@@RockhillfarmYT WOW that is soo cool. My neighbor just listed his house for $700,000 and it doesn't even have a garage.
In Central PA you can get a rent-ready house for about $35k. House I am living in now for 8 years paid $600 for it and still have less than $5k into it with repairs.
The profit depends on keeping it rented and having a good general maintenance fund along with a well funded property emergency fund for unexpected major repairs like a heating system. If that is all in place, the fix/rent is a good idea. My mindset is that the property owner “me” will pay all my mortgages and when I have renters, they “refund me back” with extra. This way, I will remember to not take on anything that I cannot find myself if the renter population drops for a period of time because, renters or not, the mortgages will need to be paid. Best plan, (the one I adhere to) is that it would best to have paid for rentals so you have no mortgages at all. Much less risk.
My mom and i do both. We fix and flip and we fix and rent.
Admittedly we work harder on the rental homes more than the flip, since we always sell as is. We live in Florida and we own 3 rental homes, 2 of each we own completely the other one we have a mortgage on, and i have to say not having to shell out the entire sum at once feels really good especially since you're still making a profit.
You are correct about CA. Any single family home will be 750-850 for basic 80’s builds. Orange County it’s 1 million plus.
The cost of an investment property (maint, taxes, ins, etc excluded) is the current market value times the investment return on money. If you put down 100% to buy the property you can't rent it for the cost of maint, taxes, ins, etc (plus profit) just because you don't have a mortgage payment. You have to pay yourself for the money you have invested, which is the equity; not what you paid down X years ago. For example, you could sell the property, get the equity, and invest that money elsewhere to earn a return. When you invest in a property, you are doing the same thing and should get a return on the money you have at risk: the value of the property, 100% of the value of the property. You are paying interest on 100% of the value of the property, some to yourself and some to the lending institution.
I moved from CA in 2005 and do buy, fix and rent in TN while working a full time job but I was fortunate to work from home. I am now retired at 46 and living off my rental income. Yes 20% and now put 30% if I were to buy. FYI - I agree with everything you say on this video. There is company is pushing the price. 40K for than what is worth and I am waiting for them push it another 100K so I can sell and 1031 exchange pay off my other rental.
This house reminds me of one I visited many years ago in the suburbs of Chicago, Illinois. They have a special name, one side of the house is one level, and the side where the basement is has a quasi-second floor.
Angel Sanchez split-level
Nice video. Those things they had you install for closet doors where hilarious. I actually disagree with the "it´s better than nothing statement", lol. On a side note, I for one, would love to hear more about your personal dealings if you are willing. I think personal experience from a knowledgeable source is a highly valuable thing to listen to.
Well I live in Hawaii and housing costs here are crazy high. Glad I bought when I did could not afford to buy now.
I too LOVE to whistle. People know I've arrived when they hear me whistling outside I've been told
I agree about the things you install.. I never pic out door handles, taps toilets, door knobs, etc. I advise, but eventually leave it at clients choice. That way when they don't like it or find out it doesn't work..its on them, not me!
I have my own fix and rent and I'm seeing a lot of similarities. I purchased it at $360,000 and potential profit as a student rental is $2200/month on a $1000/month mortgage (private 'i know a guy' lender). Potential profit as a home rental is $2200-2600/month. Potential resale value is $425,000, but for me that is essentially a break even sale with the mortgage payment deficit and paid work done. So after a few years I'll have a cool 425 or more as it appreciates by 1.25% each year and I'll be able to purchase something in the low 300s, pay the work and then sell or get it rented quicker. Not something I'd take on if I didn't have my job or the savings to coast on in the intermediary.
One would need to add in property taxes and insurance. Those would significantly reduce your monthly profit.
Live in the Washington D.C. area (D.M.V) house flipping, house renting and large companies building townhouse neighborhoods on every corner . Everybody and they momma getting into the business.
You are correct about California economy in the Bay Area, that house would be between 750-850.
We don't need to write any letters to buy it houses, just the price has to be right. I feel bad for people who have to almost beg to get a house which they are paying for. What state are you in?
You can't get a small condo in the Bay Area for 850K. Minimum price for a stand alone house in the bay is 1.3 Million in Mountain View.
"Gotta stay true to this channel about home improvement, not my personal dealings" ... adds link to where he poops... does it get more personal than that? Tee hee.
That house would rent for about 1200 in Arizona. Phoenix metro area
You said a lot of key phrases for people who are new and that is to know your markets. Plus you also have to know your numbers that's super important otherwise if you're a beginner you're going to lose money
I live in Redmond Washington and almost twice a week we get a letter about People wanting to buy our house in cash for about $50,000 over what it’s worth
Daniel Davidson I live on Vashon Island, WA. Same.
Daniel Davidson keep waiting... And wait some more... Maybe it will be worth it one day...
Daniel Davidson will your house be worth over $50k more in 5 years? My guess is those folks have a vision of at least 5 years out. I feel we're going to hit another housing crash in 5 years myself.
2021, Los Angeles area, houses going 200 to 300k over asking (asking already around 1 million) in good school districts. Letters aren't even read at this point because people are getting such insane offers. One realtor literally stated, any offer submitted with a handwritten letter will be auto-rejected. 425 for a 400 listing doesn't sound so bad!
don't mean to ask such a broad question but how do you know all of these things, like plumbing and putting together bathroom etc? Did you go to school for this or is it just fro years of just trying new things out?
this should answer your question. ruclips.net/video/e5d4ljC3oiM/видео.html
The Handyman thank you, new to the channel and missed that.
Awesome video man! Yeah it all depends on where you live, but fix and rentals, I believe, will be even more popular as millenials in general don't buy into the original 'American dream' with a house and white picket fence. Renting gives you more flexibility to move and I think that appeals to millennials and the younger generations more. I hope you do a series if you do decide to flip your rental house! Keep up the awesome work!
My friend got married and had an extra house. She didn't want to be a landlord but I convinced her to rent the house to me for the mortgage cost. 7 years later she decided she wanted sell. The rent is the area in almost triple what the mortgage was. Fortunately I was I a position to buy. Now my mortgage is the same as my old rent. Ganna rent it out when we move up.
I would be interested in the rental side of your handyman service. I plan on buying a duplex/triplex or quad, live in one and rent the rest. I'd be interested in your take
I think its a great idea man! I plan on renting our house out in a few years and getting a fixer upper closer to the beach :)
I want that painting. How can we make that happen? It's majestic.
Keep in mind that rents go up nearly every year, while the mortgage payments normally stay the same. Even if you're losing money for the first couple of years, this will change. It depends on if you can afford to take the loss for the first 24 months.
Dude i just got to say you are awesome! All your videos great 👍🏽 I wish I had your knowledge!
thanks
I'm curious how much you would charge to build the additional bathroom you mentioned. Just a ballpark figure.
It's a lot of house for the money. In town where I live I saw only 1 house below $400k. It was approx 1000 sq ft, built in 1910ish and last renovation was done maybe 50 years ago. Ah and I forgot - right next to railroad. And it is a lest 50 minutes away from the "hot spot" where all the business is.
I'm a fan of your channels and I'd be interested in seeing more learning more of everything to do with your rental im in the middle of a major remodel of an 80yr old house i inherented from my great grandmother having a family i need something bigger I've been considering renting over selling just haven't researched everything that goes into owning a rental yet would really appreciate a video on that everything about owning a rental and operating it thanks your the man ...I'm also a subscriber of your hunting channel fellow bow hunter
All those numbers assume that you don't get bad renters. Bad renters will suck up all your profits quick!
Yes the customer is always right ,have alwzys done work with this attitude, you the man
Hey Handyman, On the Fix and rent video, you put in goofy closet shades..can u please tell me what color blue you painted in that bedroom, please? It is kind of a wedgewood blue, real nice! Thx!
Where did you learn to rekey?. As a Contractor in my area would be a good service to add to
I bought a rental and fixed it up myself. Our local rents are around 600/month. Nice little drip of money coming. Plan on selling after holding for 10 years. Luckily I replaced a lot of the important things water heater furnace etc, so hopefully I’ll be trouble free for a while. Holding and then selling will make me near 100k total profit 👍🏼 I have 2 so far, my goal is 10 atleast
pocket listings are what is called when a realator holds a listing for select clients. I have never bought a house from an MLS listing and always get before they go public.
I bought a two family fixed one floor lived on it while i fixed the other floor, rented it, saved money bought another home, rented out both floors at the original property, and now we are going to rent this house, keep doign the same thing over and over so long as you draw a profit.
If you buy a house are you allowed to do plumbing/ electrical in your area? if yes then there is an inspection?
never discusses taxes and insurance...... a good rental rents for 1% of homes worth
Here on Long Island we can only wish for $ 1550 tax. Around between 12 to 18k for 500K . This is the suburbs. So Flippers have to be very careful about taxes. Work gets done at light speed and as cheaply as possible. So your previous vid was interesting to me. I have fixed some scary stuff. Just for comparison a $ 250 000 home would run between 5500 and 8000 tax I am thinking to leave N.Y soon Lol. That house here could rent for 3000 or more. Horrible
Why aren't taxes calculated as a carrying cost vs. Rental income? Tell margin is smaller than you think.
I bought a duplex for less than $200k in an affluent (read: good schools=high taxes) New England suburb. I live in one side and rent the other, so I was able to get a low-downpayment loan and the renter more than pays for mortgage, taxes, and maintenance. The plan is to get more properties until I can replace my current 9-5 income. I wouldn't even touch something where I barely break even.
Careman. That's a great deal you have going on there. Pick up a few more and kick the 9-5 job.
If it has high property tax and only cost $200k, it's not an affluent area in New England. But still a good plan, I plan on doing the same.
Great video! I've been watching your channel for a while now. I like your content. I have a couple of rental home properties myself, so I can relate. In my Tampa, Florida market I rent for approx. $200-$300 a month over my mortgage payment. Keep up the good work and great videos :)
Please show us your rental and tell us why you bought it.
Yep, that's the market. I *am* in California, just over the hill from Silicon Valley, and I bought my place in 2012. Fortunately, I didn't have to pay over asking price because it was the bottom of the post-recession market. But there was another bidder on the house, bidding over asking price, so I did have to write the sappy letter. That did it, believe it or not. The seller didn't actually care about the selling price because it was a short sale, and he was so far underwater on the place he wasn't going to see a dime of it anyway.
Bought for $499k. Appraised for a refinance a couple of years later for $725k. Now, Zillow tells me I can get $874k for it. If this were on the other side of the mountains and actually in Silicon Valley I could get AT LEAST $1M for it. Maybe $2M depending on the exact location. 4 br, 2.5 ba, 2,300 sq ft, .5 acre.
Inventory is a huge problem. There are just very few houses out there for sale. Pretty much all the Realtors I know say so, and they're not just whining.
How much is it worth now? 1.4?
Hey man I just wanted to let you know that I'm a big fan of your Channel. It has taught me a lot. I'm on my second kitchen install and I'm still trying to figure out a good price point. What is some good advice for pricing a job?
That was how it was buying my house (DC Suburbs) 2004. I had a buyer broker who was a master at the sappy letter. I was competing with 13 other families. No inspection, and I did everything short of bring a briefcase of cash and a plate of lemon squares. But I got it!
Do you ever get eerie feelings or hear unexplained noises when you are alone in a house?
video starts at 3:48
On a 30 year $300k note, with taxes and insurance, I estimate about $2200. I prefer 15 year (or less) notes on rental properties which would amount to almost $3000/month. Now consider repairs, management costs, vacancies...I wouldn't recommend this one as an investment.
I've never had good luck with rentals. The last one cost me over $10K in repairs and the renters were only there for 4 months! Bah! Fix and Flip makes more sense imho.
Hey there Handyman, great video, always enjoy them. I for one always enjoy your content and would love to hear more about you and your personal investments good and bad. Our social media friends are who we turn to more often these days for advice and knowledge. I for one would love to hear more about who you are and what makes you tick. Thanks for another great video, keep them coming. Thx 🌵😎👍
I'd be super interested in the rental house and the economics of it. If you want to stay true to your channel, you can consider having another channel for that content.
You should take the Merman door home to hang in your shop! hehe. Great video.
That would have been funny. I would have probably added to it.
wow buying a house there sucks. I live in a 200k+ city and there is so much time for inspection and insurance and no stupid letters. you just offer a price and they take it or not. seems scummy to not allow time for inspection.
it DEPENDS on where in CA you ARE....in the big cities yes you pay much more but in the interior not so much...it is still higher than the Midwest or South
I suck at door knobs. I don't know why I have such problems but I do. Drives me nuts!!!
That’s double my mortgage and I live 20 minutes from center city
i see that new awp tool backpack in your back seat, show us how you're going to organize it! :v)
great videos man, loads of interesting content.
Hey Mr. Handyman. I too am a handyman. I have family members tell me to become a home inspector rather than build up my current business. They say I could make more money that way.
Have you ever considered be a home inspector?
This is a great question and I have though about it a lot. I have a good friend from college that tried to be a home inspector. It is a very competitive market. Your success is all about marketing. You will have to have advertising. Most customers wont see results of your hard work like they do with the physical labor and finished product. You will have to work 10 times harder to get the word of mouth referrals. Realtors will be your number one resource for work. You will have to join realtor boards and really work the realtor business for their recommendations. My experience has been the market is flooded with home inspectors. To be a home inspector you don't need any skill. You just have to go over a check list of things to look at and take pictures of and type up a report.
$1500 mortgage payment + $850 per month property tax + $100 per month home owners insurance. Yeah, I don't know how you can make any money on a $2500 per month rental fee. Plus you have to account for all the maintenance costs.
Paid $65,000 for my duplex 😬. Can’t imagine the mortgage payment on a $400,000 house 😧
I wanna see your rental
Is this house in Canada? Where does a split level home in pretty good shape cost 400k in the "ghetto"?
The USA baby.
What part of the country is this house ?
Expensive area to live!! A $250,000 house is a nice house in my area, but I live in the Midwest. Average prices in my area are $150,000 to $200,000.
Its interesting how different areas of the country the same house on the same size lot can cost so much more just based off of the location.
Well that's awesome that you have rental properties man you are really doing something with your abilities and you have learned how to govern yourself very well
I rented my house once and they moved in like 5 people and sublet to them and destroyed my house. Cost me 140,000 to fix a 250K home. I lost everything I made and it cost me another 30,000 out of my pocket. Total loss after 5 years. You may want to rethink renting. Think they were RUclipsr and made videos out of the house blowing up the bathtub and kicking in the walls. AC Heating was broke and cost me 20K to replace.
Did you take any legal action against them?
If you do adequate screening. These things can be largely avoided.
I call BS, 20k on ac? Lmao
What are the taxes? This on top of mortgage yes?
Where I am property taxes are low. $1500 a year for a $500,000 house
Tour of your rental property!!!
I like the idea of a fixing an rent. Or living in it for a year like you said and fixing it but selling it for a profit. That's a gold in life for me.
Hey man your numbers are way off. I just bought in Feb a 199k house costs me 1475 a month after taxes, pmi, and insurance. PMI is only like $110.
How much did you put down. You might also have high property taxes. You can put my numbers into any mortgage calculator to see they are almost spot on.
5%
That will increase your rate. If you put 20% down you can get a better rate. To buy and investment property you have to put a minimum of 25% down. the more you put down the lower the rate.
yea basically, the less you put down, especially if it's not going to be your own personal house, the more likely you are to walk away and take your losses. Once however it's your own personal home and you have say 75k invested in a 375k home. Your likely to do everything you can before filing for bankruptcy. Also IF you do file, with the 75k down, they can likely cover all the fees from repossession and repair and resale and still make a profit.
At a certain point putting more down won't matter, but until then every few thousand extra you can put up to start will guarantee you a better rate.
I don't/can't understand these home prices. From my perspective, it's mind-blowing. I live in the mid-west, small rural town of 40k. $300k will buy a LOT of very nice home in a very nice neighborhood here (3-4K sqft and some land). $1M will get you a whole farm. How those folks can go into $375k worth of "slum" debt is just beyond me. I mean, we make a very good living here, but we likely could not swing that mortgage b/c we wouldn't be able to own it AND accrue wealth. And I fail to believe the difference in pay grade from here to there is that steep. I mean, do pharmacists, doctors, business owners and engineers, etc. make double out west what they do over here? I'm left to believe that home ownership for that area is much, MUCH tougher than it is here and that the level of home ownership is compromised withing the same earning brackets due to an over-inflated housing market. Frankly, I feel damned lucky as a homeowner... but, I can see where you are sitting on a veritable gold mine. I really enjoy your channel.
To answer your question about pay. Yes. People make a lot more here. My wife and I were looking to move out of this city to a smaller one. 250K people. Homes still cost $300k or more for a small house. We both would have taken major pay cuts. She was offered a job at $8 per hour less and a 50% cut in her bonus for the same position same company then what she makes in the city. The high cost of living has forced a lot of Blue collar people to relocate to other states. Most my customers have a family income of at least $200k per year.
@@TheHandyman1 Thanks, man.
Sure I'd like to see more of your character and wisdom with your personal properties that's definitely something that would be encouraging for sure
This house in my town, Elmira NY will be no more the $200,000. My five bed, two full bath home was $117,000. It isn’t in as good a shape as this house but it isn’t bad either. I’ll stick with my area.
also called "buy & hold"
I'll never understand taking a mortgage out to buy a rental. Risky business.
I agree 100%
Its all about education and experience. Most people can't handle rentals.
There is risk involved. Being a landlord or property manager can be difficult. However, if you can purchase properties like duplexes, or other multi-dwelling structures, you can rent one to cover the mortgage as you renovate the neighboring unit. Rent that out at a higher rate, pay down 75% on that property, then use the equity to purchase another similar property. It can work, if you're careful and don't mind putting in the work. My one major bit of advice to offer is never, ever work with subsidized housing entities like Section 8 or other programs where low income families rely on monthly subsidies. I know it sounds cold, but it almost always ends in unlawful detainers, court costs, lost rent, and property damages.
Oh, and be prepared to conduct quarterly inspections. That's how you stay on top of unlawful occupants, drug activity/production, and pests. You can't swing by once a year and hope the place is being cared for properly.
Im glad im in a small town, with 3.15% interest on a puny $33k mortgage.
For the love of god, wainscot paneling without paneling
Seattle since 2010 added 110,000 people. In portland the cost fot impact fees is $40,000. And business pays for 90% of meteo. In seattle $110b phase 3 metro all paid by employees and taxpayers. 3rd largest homeless poo in usa. WA state tax system $100 billion corp welfare and tax credits for amazon, boeing, microsoft et al. No income tax and the top 1% benefit.