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Forum » Looking to purchase a rental property (advice plus)
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Thread: Looking to purchase a rental property (advice plus)

post 1686615543 07-16-2023, 11:05 AM
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Looking to purchase a rental property (advice plus)

Age 30

If there are miscers who own rental properties, I'd appreciate any tips or advice.

This has been in my head for a few months. I own my home outright, and have no personal debt. So I might as well make use of some credit to make an investment that should pay off over time.
I own a business (subject to corp tax) also so I have the choice of either purchasing a property personally or through my business.

I live in an area with quite low property prices compared to the rest of the country.
It's quite easy to find properties for sale that offer a gross 10% ROI.
Ideally I'd like to find something that isn't going to take up a huge chunk of my time as I still have my business to run

Is it possible to fuk this up?
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post 1686615733 07-16-2023, 11:08 AM
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post 1686615923 07-16-2023, 11:12 AM
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Sounds like the quality of renters will be your biggest risk, and ensuring you can keep it rented
post 1686616903 07-16-2023, 11:33 AM
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#1 advice: don’t get something located near a space station.
mo e
post 1686617293 07-16-2023, 11:38 AM
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Originally Posted By mulletwarrior⏩
#1 advice: don’t get something located near a space station.
Or a doctors office
post 1686617333 07-16-2023, 11:38 AM
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Originally Posted By Anachron⏩
10% ROI based on what?

Sounds like a chitty area, which will result in chit tier rentards.
Based on the purchase price of the property relative to rental income. Not taking into account future value of property.

Honestly I trust the population here more than somewhere like Paris. Crime is much lower.


There is an ongoing project to link with the high speed rail and motorway network to Paris (tgv to Paris in 2hrs). It recently suffered a setback but it's likely something that will happen, eventually...
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post 1686617503 07-16-2023, 11:43 AM
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Originally Posted By tvr123⏩
Based on the purchase price of the property relative to rental income. Not taking into account future value of property.

Honestly I trust the population here more than somewhere like Paris. Crime is much lower.


There is an ongoing project to link with the high speed rail and motorway network to Paris (tgv to Paris in 2hrs). It recently suffered a setback but it's likely something that will happen, eventually...
So you mean, e.g., 100k EUR to buy a place, 10k EUR gross rental income per year by '10% ROI'?
post 1686618593 07-16-2023, 12:00 PM
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Originally Posted By LogicalLifts⏩
So you mean, e.g., 100k EUR to buy a place, 10k EUR gross rental income per year by '10% ROI'?
Yah
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post 1686618823 07-16-2023, 12:04 PM
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First thing, get a separate LLC for your properties. Last thing you want is to get sued have a rentcel try to come at you for everything under the entity the house is under.
When it comes your time to die, be not like those whose hearts are filled with the fear of death, so that when their time comes they weep and pray for a little more time to live their lives over again in a different way. Sing your death song and die like a hero going home.
post 1686619743 07-16-2023, 12:22 PM
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Originally Posted By Godfrd824⏩
First thing, get a separate LLC for your properties. Last thing you want is to get sued have a rentcel try to come at you for everything under the entity the house is under.
Cmon mane this isn't the US, we don't have that problem here. I'm trying to keep things as simple as possible.

Srsly I am open to that possibility. Will discuss with my accountant as to whether it's worth doing.
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post 1686619873 07-16-2023, 12:25 PM
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How are interest rates in France?

He they're over 7% which kills buying a rental property right now.
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post 1686619963 07-16-2023, 12:26 PM
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Originally Posted By Azzurri⏩
How are interest rates in France?

He they're over 7% which kills buying a rental property right now.
Circa 4% for a mortgage over 20 years
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post 1686620303 07-16-2023, 12:35 PM
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Yeah no special setup here, my property is owned by my woman and I and last year it was included as sole prop income on our taxes
post 1686620663 07-16-2023, 12:43 PM
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Honestly after COVID and seeing how hard landlords got screwed for thousands of dollars, I would probably never get in that game. (Super Ded fkn Srs)
post 1686620713 07-16-2023, 12:44 PM
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Originally Posted By LogicalLifts⏩
So you mean, e.g., 100k EUR to buy a place, 10k EUR gross rental income per year by '10% ROI'?
Great advice! Oh wait, the so called master of the land had none lol.

Strange, considering you are normally around for hours to argue some nonsense lol
post 1686621223 07-16-2023, 12:53 PM
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Imagine choosing RIGHT NOW to invest in real estate....

Wait until next year and save yourself 30% brah.
post 1686621273 07-16-2023, 12:54 PM
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Originally Posted By Anachron⏩
Neither did you.

But you don't even know why people who know what they are talking about are asking about the "10% ROI" claim.
i never make threads bragging about being a rich lord of the land though.

or put people down for being renters

he does, like every day lol
post 1686621533 07-16-2023, 01:00 PM
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Originally Posted By CanuckGame⏩
Imagine choosing RIGHT NOW to invest in real estate....

Wait until next year and save yourself 30% brah.
So much uncertainty around this, seems like a safe bet if you believe rates will be higher for longer

Just think what would happen if rates are cut soon as so many think they will be
post 1686622073 07-16-2023, 01:08 PM
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Originally Posted By Destor⏩
So much uncertainty around this, seems like a safe bet if you believe rates will be higher for longer

Just think what would happen if rates are cut soon as so many think they will be
What? Bro WHAT?

rate cuts are not happening for a LONG time. Where are you getting this information that many are predicting rate cuts?

The onle people saying rates will be cut are realtors trying to cope and trick people into buying.

There will be blood on the streets like 2008 when this is all done. Especially in Canada. I dont know anything about the american market. But Canada....its over. Just wait and see.
post 1686622433 07-16-2023, 01:16 PM
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Cap rates and cash flow are king. Vetting and finding great tenants is the single most important thing you can do.

The lower the class rating a property is(A through D), the higher the cap rate which makes sense since it's correlated with risk. I prefer class B properties(usually slightly older home In a suburb within a reasonable commute to a major city) which to me is the sweet spot.

Single family homes or complexes? Are you willing to live in one of the units? Before buying check with the HOA regarding renting permissions; some have restrictions especially condos and co-ops.

LLCs are unnecessary(not to mention how easy it is to pierce the corporate veil) until you own more than 4 properties and subject to fair housing act.

Bigger pockets forums and r/landlord is where we hang out online. There will also be local landlord groups in your area that you can join to learn more about your specific area.

Feel free to ask more questions.
post 1686622943 07-16-2023, 01:28 PM
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Consider property taxes when calculating ROI.

Owning a rental in Texas is autism mode and I wish we had bought properties in some other state, not where we live.
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post 1686623113 07-16-2023, 01:33 PM
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Renters is what will make you or break you.
I bought a house right now plan was to fix it and rent
Bought for 237 50k to remodel it, listing tomorrow for 397k if it sells I will walk away with 75k if not I'm renting it.
I know a few guys that rent. One has a 6 unit and is listing it, he lives in one of the units and is tired of dealing with tards..
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post 1686623493 07-16-2023, 01:41 PM
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Originally Posted By tvr123⏩
Circa 4% for a mortgage over 20 years
It could be worth it for sure, depending on what your other investment options are.

Most here are US domiciled and the specific advice won't really carry over to France. Though I imagine renters have all sorts of "rights" considering the legislative setup there.
post 1686623923 07-16-2023, 01:48 PM
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Originally Posted By tvr123⏩
Age 30

If there are miscers who own rental properties, I'd appreciate any tips or advice.

This has been in my head for a few months. I own my home outright, and have no personal debt. So I might as well make use of some credit to make an investment that should pay off over time.
I own a business (subject to corp tax) also so I have the choice of either purchasing a property personally or through my business.

I live in an area with quite low property prices compared to the rest of the country.
It's quite easy to find properties for sale that offer a gross 10% ROI.
Ideally I'd like to find something that isn't going to take up a huge chunk of my time as I still have my business to run

Is it possible to fuk this up?
The biggest thing you’ll want to consider is will the property cash flow. Take the expected rent and minus out the mortgage payment, property taxes, insurance, and also a buffer for maintenance, cap ex, vacancies and property management if you don’t plan to manage yourself. That number should be positive

Also, if you want more hands off, considering looking for newer properties or properties where the major systems have been updated more recently (roof, hvac, windows, plumbing, electrical). If the house has an old roof you’ll constantly be dealing with roof leaks and eventually will have to replace it which is a big cost for example

If this was US I would say that a separate LLC is a good idea but I’d talk to your attorney/CPA to figure out the standard in France

One last thing, you don’t have to offer asking price for a house. Run your numbers on potential deals and make the offer where it makes sense for you. It may take multiple offers to get a deal that makes sense but it’s better to do this upfront than to overpay for a property and it ends up not cash flowing

Good luck!
post 1686624103 07-16-2023, 01:52 PM
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Originally Posted By Anachron⏩
Neither did you.

But you don't even know why people who know what they are talking about are asking about the "10% ROI" claim.
A fellow LandLORDgets it.

Important to unpack what someone means with that claim, as it should include a number of calculations.

All these plebs dancing around...it'd be hilarious if it wasn't so pathetic.



LOL
post 1686624383 07-16-2023, 01:58 PM
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Originally Posted By LogicalLifts⏩
A fellow LandLORDgets it.

Important to unpack what someone means with that claim, as it should include a number of calculations.

All these plebs dancing around...it'd be hilarious if it wasn't so pathetic.



LOL
well, you got some clarification from OP and dug out.

are you ready to help with some advice, self proclaimed rich lord of lands?
post 1686624763 07-16-2023, 02:04 PM
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can you afford the payments it you have no tenants? can you afford if tenants decide to stop paying? do you plan on renting the entire thing out, each level seperatly or by rooms? do you know the laws surrounding being a land lord? Are you good with dealing with personal issues between people (if you have multiple tenants)?

It's a huge risk for only an extra few hundred a month.
post 1686624773 07-16-2023, 02:04 PM
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Originally Posted By LinuxJon⏩
Consider property taxes when calculating ROI.

Owning a rental in Texas is autism mode and I wish we had bought properties in some other state, not where we live.
But you don't have state income tax. So it kinda evens out.
When it comes your time to die, be not like those whose hearts are filled with the fear of death, so that when their time comes they weep and pray for a little more time to live their lives over again in a different way. Sing your death song and die like a hero going home.
post 1686625293 07-16-2023, 02:17 PM
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Originally Posted By CanuckGame⏩
What? Bro WHAT?

rate cuts are not happening for a LONG time. Where are you getting this information that many are predicting rate cuts?

The onle people saying rates will be cut are realtors trying to cope and trick people into buying.

There will be blood on the streets like 2008 when this is all done. Especially in Canada. I dont know anything about the american market. But Canada....its over. Just wait and see.
This is the most-referenced rate move predictor

https://www.cmegroup.com/markets/int...atch-tool.html

The dates along the top of the graph are scheduled/predicted Fed meetings, you click through those and can see where the market currently figures rates will be at each meeting.

So based on this, "the market" believes one more rate hike is coming, the Fed will hold for like seven months, and then rate cuts will start in March with basically a 25 bps cut every meeting after
post 1686626253 07-16-2023, 02:37 PM
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Originally Posted By SteadySmokin⏩
can you afford the payments it you have no tenants? can you afford if tenants decide to stop paying? do you plan on renting the entire thing out, each level seperatly or by rooms? do you know the laws surrounding being a land lord? Are you good with dealing with personal issues between people (if you have multiple tenants)?

It's a huge risk for only an extra few hundred a month.
It’s definitely a huge risk, but only “a few hundred a month” is a poor way of looking at it

Cash flow is one method of return

There are also tax benefits

Also, the tenant is paying down the mortgage meaning that you benefit from the increased equity over time

There’s also appreciation to consider (market dependent obviously) but over 20 years the value will definitely increase

A better way to look at it would be to calculate IRR (Internal Rate of Return) which better takes into account the principal pay down and appreciation
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