Considering purchasing a rental property as a source of secondary income. I'm handy and can handle repairs. Curious about what others experiences are with rental properties.
Alternate option im considering is to purchase raw land and lease it for raising cattle. Less work. Less income im guessing. I like the raw land idea better but think there is more potential in a rental house.
Rental Property
Re: Rental Property
I wish I had more rental properties. For the amount of work and effort and worry, it would just be more worthwhile to have more. I have learned I cannot idiot proof an apartment. Remember that the first place you make money in a rental, is in the purchase. If it is not a great deal, I would pass it up.
I don’t know where you are, but I know of people that move their cows to various properties so that those land owners can get the agricultural tax reduction. It’s the reverse of what you are thinking of doing.
I don’t know where you are, but I know of people that move their cows to various properties so that those land owners can get the agricultural tax reduction. It’s the reverse of what you are thinking of doing.
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Deleted User 75
Re: Rental Property
I do Ag Real Estate appraisals....if it's tillable land and you're not connected within your Ag community wherever you're at (and/or have no Ag experience) then I'd probably recommend not trying to lease/cash rent the land for crop production.
Go with a rental property.
If you're handy spend several months looking for a good foreclosure or fixer upper type property from a distressed seller....like someone said above, if you pay too much for the property then you won't actually end up with a solid source of secondary income.
I see some RE investors go about it both ways. Some go with the lower quality properties, fix them up, and they generate more profit per year....and then others buy nicer ones, make less profit per year (if any), but benefit from the depreciation expense deductions where the property frequently shows a net loss per year, so they can benefit from the tax implications, and then the big benefit comes when they sell the property years down the road. The nicer properties hold value better and are safer investments....you can do it both ways effectively, but figure out what method fits your goals better.
Go with a rental property.
If you're handy spend several months looking for a good foreclosure or fixer upper type property from a distressed seller....like someone said above, if you pay too much for the property then you won't actually end up with a solid source of secondary income.
I see some RE investors go about it both ways. Some go with the lower quality properties, fix them up, and they generate more profit per year....and then others buy nicer ones, make less profit per year (if any), but benefit from the depreciation expense deductions where the property frequently shows a net loss per year, so they can benefit from the tax implications, and then the big benefit comes when they sell the property years down the road. The nicer properties hold value better and are safer investments....you can do it both ways effectively, but figure out what method fits your goals better.
Re: Rental Property
When you sell...if it hasnt been your primary residence for 2 of the last 5 years then dont you pay significant taxes?
Just Ledoux it
Re: Rental Property
I guess its an evaluation of whats less. Income tax or capital gains tax
Just Ledoux it
Re: Rental Property
Had a few places in high rises. Super easy money when the building has a maintenance staff. Also used a guy to find renters for us - that was way easier than when we originally handled that part ourselves.
Being forced to sell a couple now - if we could go back and do it again, we probably would have bought a couple more.
Being forced to sell a couple now - if we could go back and do it again, we probably would have bought a couple more.
Re: Rental Property
If opting for renting, just keep in mind that that you'll need to accept the condition in which the rental place is left in after the renter's leave.
If opting for land and having someone rent the land for cattle, consider working a clause into the rental agreement. My in-laws had a 400 acre farm which they rented the land to someone who raised grass fed cattle. Part of the rental agreement besides the monetary part was a head of cattle. My in-laws had freezers filled with the best grass fed beef I have ever tasted. Worth considering.
If opting for land and having someone rent the land for cattle, consider working a clause into the rental agreement. My in-laws had a 400 acre farm which they rented the land to someone who raised grass fed cattle. Part of the rental agreement besides the monetary part was a head of cattle. My in-laws had freezers filled with the best grass fed beef I have ever tasted. Worth considering.
Re: Rental Property
Yea a lot of people around here negotiate beef into the rental agreement and also the rancher is required to maintain and replace fencing etc.
Just Ledoux it