Best way to rent out a condo?

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<p> Isn't it funny that almost everyone saw this as scam except shooby? I love the internet. It almost takes the guessing game out of the equation.</p>
 
Hey now, I didn't send him any information that might've casued him to steal my identity. I was cautious. Guess it's an eye opener.
 
<p>What I meant was, that when you are close to the action you don't see it as clearly as others would from a distance. </p>
 
<p>Shooby, if you sold today, how much would you lose?</p>

<p>Is it $20,000 or less? If so, do you realize that over the next five years that is probably the minimum you'll lose pursuing renting it? (based on your saying you needed $2050 to cover your mortgage/HOA costs)</p>

<p>If you drop your price to $1750, you'll probably only lose $20,000 - $25,000 over the next five years.</p>

<p>If you drag your feet down from $2050 to $1900 to $1850, you're likely to lose $25,000 cause of churn and delays with tenants as you test pricing. Possibly much more should you blunder into an eviction scenario, fraud scenario, damage etc.</p>
 
Hm, I bought the condo at $445, I think its worth around $460-470 right now.



If i rented at $1950, I'd be breaking even every month. Prob won't lose anywhere near that if I lower it to $1750, shelling out about $200 a month to that condo. That's as long as I can find good tenants.
 
<p>Then you either put more than 20% down or are using ARM for financing. At 5.25% interest, an 80% LTV has $1550 in interest every month roughly. HOA is probably another $200, it is condo after all. Taxes another $400. </p>

<p>I get a expense of $2150 before anything else and that is assuming 20% down and doesn't include the principle payment, liability insurance, maintenance, etc.. Less expense if the mortgage is an ARM, but when does rate reset?</p>
 
Wait a minute, you are still making payments on the old condo or just the new condo?
 
I put about 40% down. I got a 15 yr fixed rate at 5.25% . My HOA's are about $250 a month.



Prop taxes, about $6000/yr. I'd be eating that..



I'll be making payments on both my places. Thats why I need to rent out this place, I can't afford to pay mortgages on both my places.
 
<p>Shoob, 2204 Ladrillo is a superior property listed at $458k. $469k didn't connect with a buyer. 402 Tropea is another larger unit listed at $469k and not finding a buyer. You'd also be up against 708 Marinella at $489k with an <strong>attached garage </strong>and <strong>no stairs</strong>. 2609 Ladrillo (same as yours) finally left the market at $469k and perhaps went pending but I would not be shocked if there's cashback-after-closing involved. </p>

<p>Why are you keeping the unit? </p>
 
I have the money for the down payment on my new place. I plan on keeping this one b/c I really like the location and the fact that it's Irvine, not Tustin. I plan on making it a rental for future rental income once the mortgage is paid off.

If I don't need the money from selling it, why sell?
 
<p>Shooby, SELL!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!</p>

<p>You've got $178,000+ in equity. At a breakeven sale, you'll probably pull $150,000 back out. $150,000 at 5% in a CD is $7500/year. $7500 x 5 years = $37,500 lost to opportunity costs alone.</p>

<p>Your out of pocket cash flow is $2900/month to PITA. Some of that is principle (actually a big chunk is principle) but you'll be eating a $1000 shortfall out of your pocket at $1900/month. You don't have liability insurance in it. You don't have maintenance and repairs in it. Legal fees, etc.</p>

<p>Every year you attempt to rent it, instead of putting at least $7500 into your pocket, you'll put $12,000 out of pocket into the condo, minimum.</p>

<p>That's a $20,000 a year spread.</p>

<p> </p>

<p> </p>
 
<p>Its very interesting to see the difference between a year ago. I myself rent a similar place in Costa Mesa near south coast metro. I pay $2100 a month and am currently month to month after a year lease so am looking to move someplace cheaper. I have lots of garage stuff and the wife is expecting so want to have a similar place, just want to pay about 400 bucks less a month! There are many more options than last year for about 100-150 cheaper than what I pay but I am going to wait it out for the bigger discount since I have no big rush. I want to be closer to Costa Mesa for access to beach and good traffic but not in the crappier areas of Costa Mesa. Ill run your location by the wife since she does like Irvine and maybe we can come check it out...</p>

<p> </p>
 
A person once sent me a bunch of postal money orders for a car I listed on ebay, and wanted me to wire some of the money back to pay for the shipment of the car to Europe. I went along with the scam, sent the postal money orders to the FBI and strung the guy along for a month or so. It was hilarious. It was amazing to read the frustration in his emails while trying not to offend me as I kept giving excuses for why I could not wire the money. It even got to the point when I finally told him that my bank contacted me and said the money orders were no good, so he needed to send me a different form of payment. You can't pay for that type of entertainment.<p>

The only bummer is that the FBI did nothing, and it was four or five thousand dollars worth of postal money orders. And they were excellent looking money orders. I could not tell the diff.
 
<p>Shooby</p>

<p>I self manage several of my rentals in 2 different states. I run ads in newspapers and personally meet each applicant, run a credit check (applicants pay $30.00 per person for the CC), run a criminal background check, and look for current or past lawsuits. I meet ALL members of the families and believe that I have developed a pretty good "gut feel" for people based on face to face meetings on top of the screening. I accept pets, upon review ,and that gives me an edge over about 85% of the competition.</p>

<p><strong>I take CIF (cash in fist) for deposits and first months rent. If they can go to the bank for a cashiers check then they can get cash</strong>. I have had only one bad renter in 20+ years of owning rental property but it was enough for me to sell that property.</p>

<p>Being a landlord is not for the naive or the trusting. </p>

<p>I have lots of hobbies and dealing with tenants is not one. <strong>It is a business and should be treated as such</strong>. I also have a clause in my leases which gives me the right to do physical walk thru inspection quarterly with 7 days written notice. I fix any minor items at that time so there is little or no deferred maintance at move out time. I keep my properties in good shape and respond quickly to any complaints.</p>

<p>Your condo has some challenges getting to a true positive cash flow based on the HOA dues and taxes taking a chunk out of your income. <strong>I am bullish on rental property</strong> <strong>but you need to look at what No_Such_Reality said related to the need to deduct lost opportunity from your down as well as the equity to see if you are actually making income</strong>.</p>

<p><strong>Otherwise you are betting on appreciation and are a speculator</strong>. There is nothing wrong with speculating but make sure you understand the differance between that and investing.I could not get any condos to pencil positive in OC since 1999 prices unless I paid cash to beat CD's in 2003-2005 . I began buying properties out of California in 2003 to reach positive cash flow.</p>

<p>Beware of pending tax changes to rental properties if the Demos get into office.</p>

<p>I think you are gettting some "tough love" from the folks here.</p>

<p>Enjoy!</p>
 
Awgee, I wasn't able to string anyone along, but I got an email from a Nigerian 419 scammer one time with the typical BS story of a death and account that had something like $5 million in it. I wrote back telling the scammer that I was already involved in a deal for $36 million and didn't have time to worry about such small deals. I was amused at the flood of more lucrative offers I started receiving immediately.
 
<p>Winex... Nice! I just immediately erase any things like that. It annoys me that they are so persistant....</p>

<p>good luck shooby</p>

<p>-bix</p>

<p> </p>
 
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