Quote:
Originally Posted by Crazy Flamer
Thanks everyone for the input so far. I've balanced out the risks vs potential reward already. And yes, this is more of a long term play and I'm comfortable taking this on.
But part of the process will be to find renters and good ones at that. I know most rental applications come with credit checks. Is that something I can do on my own or do I have to hire a third party to do that? I'm guessing employment verification is something I can do myself?
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Do you know what you're doing? If no, maybe don't self manage.
I tried to find a renter for a few months and it was hell. I didn't know what I was doing... leads kept falling through...
I hired a property manager. He knew what he was doing and he had access to much more complex stuff for cheap due to economies of scale. It cost me basically a little more than a month of rent per year and it was deductible. So worth it. Because it's deductible for tax purposes, it essentially costs me slightly less than a month of rent per year when the taxes are factored in.
I did so little and had so much peace of mind. I kicked back and had rents deposited to my account and basically re-paid damage deposits or property manager fees once or twice a year. My other friends who self manage have to be involved around 1-3 times a month.
If you have a condo that's relatively low leverage, you can get to the point where your yearly rate of return after taxes is like 10-30% yearly. But if highly leveraged, you can barely break even after multiple years.