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income property

 
Greenhorn
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after some time's investigation, i found a lot of people buying duplex as income property. in some part of greater cleveland area, the rental demand for duplex is high. and you can almost be self sufficiet even having only one unit rented. of course, you will have positive cash flow if both unit are rented. that is very attractive.
as long as the duplex you bought are in good shape, it looks like the more property you own, the more profit you will get. i am moving in new home tomorrow. but i won't stop there, i am almost tempted to having plan to buy a duplex every two months for the rest of the year.
anyone has similar experience. looking forward to hearing from you.
 
Ranch Hand
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KS: as long as the duplex you bought are in good shape, it looks like the more property you own, the more profit you will get.
Wait until your tenants grill a pig in the bathtub, -- something of that sort happens to my friend all the time, -- he is a landlord. Renting a property is a business, just like running a gas station or a laundromat, -- don't expect to get rich easy. You get headaches, and you run a risk of losing your investment, and you expect a reward. But the ratio of rewards to headaches is hardly higher in the rental business, -- otherwise why would anyone bother doing anything else?
 
ranger
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So, Eugene, what type of business would you recommend? Is there any that the rewards out-weight the headaches?
Mark
 
John Smith
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Mark: So, Eugene, what type of business would you recommend? Is there any that the rewards out-weight the headaches?
Two economists are taking a walk. One says, "Look, there is a dollar on the ground". The other one replies, "It's a fake one, -- if it was real, somebody would have picked it up already." There are great many entrepreneurs in America, all looking for the highest profit for the lowest possible risk. They balance the ratios. Sure, there are some distortions here and there due to legal or regulatory restrictions, but overall, the playing field or reward/risk ratios is leveled across the different types of businesses. You may find a dollar on the ground, but you can't expect to make a decent living roaming around and searching for them.
For example, one type of business is daytrading. It's a great business, -- you have no employees, clients, or production facilities to run. What are your chances of survival? About 1 in 10. Compare that to a typical small business, -- a few disgruntled employees and a few hundred customers some of whom are suing you in court. Chances of survival: about 2 in 3.
So, what's the best business? It's the one where your passion is, not where you think the money is. Any business will do, -- just run it better than your competitors.
 
Ranch Hand
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Originally posted by Eugene Kononov:

Two economists are taking a walk. One says, "Look, there is a dollar on the ground". The other one replies, "It's a fake one, -- if it was real, somebody would have picked it up already." There are great many entrepreneurs in America, all looking for the highest profit for the lowest possible risk. They balance the ratios. Sure, there are some distortions here and there due to legal or regulatory restrictions, but overall, the playing field or reward/risk ratios is leveled across the different types of businesses. You may find a dollar on the ground, but you can't expect to make a decent living roaming around and searching for them.
For example, one type of business is daytrading. It's a great business, -- you have no employees, clients, or production facilities to run. What are your chances of survival? About 1 in 10. Compare that to a typical small business, -- a few disgruntled employees and a few hundred customers some of whom are suing you in court. Chances of survival: about 2 in 3.
So, what's the best business? It's the one where your passion is, not where you think the money is. Any business will do, -- just run it better than your competitors.


Very thoughtful, Eugene. Thanks for inspiring me
 
Ranch Hand
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If you want to own rental property, it helps if you want to live there, too. That way you can keep an eye on things without having to go too much out of your way. It's like living above the store -- it's much more efficient use of your time.
Be aware, however, that in cities with leftist politics you'll be demonized as a parasite oppressor of the poor -- for threatening to turn people out of "their homes" if they can't afford to live there, or for raising the rent in times of inflation. (It's much like the antisemitic demagoguery in 1820s-1930s Europe.)
It got so bad in NYC during the 1960s and 70s that many landlords simply wrote off their investments in low rent neighborhoods. They collected what rent they could for as long as they could, without doing maintenance (which would have been throwing good money after bad) or paying property taxes, and eventually allowed the properties to be confiscated by the city.
 
Ranch Hand
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Correct, there's 2 types of landlords: good ones and rich ones.
The good ones rent out good property at decent prices and even do maintenance.
The bad ones rent out bad property at extortionist prices and let the property rot. They let the renters face the tax collectors who come to collect the property taxes the landlord was supposed to pay but didn't.
 
Frank Silbermann
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The slumlords I described didn't get rich. After all, they had to write off their investments. By collecting rent and not doing maintenance or paying taxes, they merely salvaged a portion of their principal.
The problem was that "progressive" New York City politicians refused to arrest and prosecute vandals, and passed laws making it so expensive and time-consuming to evict non-paying tenants that the buildings were no longer providing income. In fact, properly keeping up a building in a bad neighborhood would have been a net drain of funds.
The people who passed the laws didn't intend for the landlords to dis-invest that way; rather, they hoped these laws would help "redistribute the wealth" from rich to poor.
In the better neighborhoods where tenants had more wealth, price controls combined with inflation had essentially transferred the wealth from landlords to long-term tenants. Landlords salvaged a portion of their wealth by "going co-op". That is, landlords got the tenants to agree to buy the apartments for significantly more than the present worth of the the landlord's rent-controlled income stream, but at a price low enough so that the tenant could immediately sell the apartment unit for a huge profit (so he could benefit at the expense of the landlord without having to reside at the same address for the rest of his life).
Naturally, there has long been a housing shortage in NYC.
 
Ranch Hand
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Hi,
Everyone knows the cliche: "Takes money to make money." but not everyone practicing it.
If you have a well good place taking into all the accounts of what make you like the place, you will attact the people that have the similar taste like you to rent the place.
1. Know which market sector are you trying to do business with.
2. What is the property location to attract that particular market sector.
3. Have a policy and contract proper written with a lawyer editing them.
4. Start humble when you know the business very well, hire the property management firm/hire people to work for you.
You will not attract bad tenant if you follow those basic principles.
Good Lucks,
MCao
 
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