I'm wanting to invest 30-40 grand into property... Looking at buying a house and renting it out in a small town(Yorktown).... 1300 ft2. I could spend the same amount on 10 acres in near Seguin..unimproved.
Anyone have experience renting a house out in a small town?
Any suggestions or "things to think about" for me?
Either option will require me to put some money into it.
I have a rent house and a duplex that I let a realtor manage. She is better at dealing with tenants than I am because it is hard for me to be the a__hole when the time calls for it and I don't want the headaches. The realtor also has a lengthy contract that she enforces and it gives me a total hands off deal. Her fee is reasonable and it is wrote off. Duplexes can be cash cows if you find the right ones.
I had one rent house in Pearland and it was a pain to collect the rent so we sold it at a very nice profit. Now all we do are flips.
All you had to have done was evict your tennant and get another one or at least give notice and file. Screen your aps with credit and criminal before renting. They don't learn slow pay or no pay after they move into your property. Credit/rental history/work history/criminal check will tell on them. Long term capital gains with cash flow and/or 1031 exchanges have much more staggering returns than a taxable flip.
Of course the amount of the gain up to the amount of depreciation taken doesn't qualify for the favorable 5% or 15% tax rate on long-term capital gains. 1031 exchanges are good but until you finally convert the property to cash, all you have is a paper profit, assuming of course the one you acquire in the exchange appreciates more than the one you gave up. I don't do flips and the only make sense to me if you can get a heck of a deal on the purchase. One good thing about a flip is not having any holding costs for years and years of holding a rent house or investment property. The real money I've seen made in the past 5 years or so has been in mineral interests. Rent houses and flipping houses pale in comparison.
We run 5 properties and renting is a no win deal,Sell period,buy cheap fix them up sell for a good profit,even finance make more money,when we started they were puting 60,000.00 a month in the bank in less than a year were puting over 130,00.00,per month away,check out your prospects well, get good down payments,we have almost 250 dwellings and 150 storage units,lots of work but it can be done!!!
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