A Money Making Idea with Real Estate
I’m writing this because I want to give you a money making idea.
I’m sure you’ll reject it at first but hear me out.
If you want to create a monthly income stream and make about $2,000 a month more or less depending on your local area in the USA
Consider this…
Purchase a duplex home. A duplex home is a house that has 2 residences under the same roof..
I have been studying on this and I may do this next year.
As far as I understand it receiving rent is a non taxable event, but check with your CPA.
If you buy a duplex house at the right price, meaning is the deal feasible and will it produce a substantial net income after expenses, i.e.: mortgage payment, taxes and any repair costs. You can also make the renter 100% responsible for all routine repair costs,- just put in the lease and this is common and expected in the industry..
As far as renters go. Rent the duplex to someone who has a long term job history and good rental history credit. If they don’t qualify… find someone else.
How long will it take to find house renters?
If the rental price is under $1000/mo. you’ll find someone shortly, particularly in large cities.
If the rental price is over $1000/mo you’ll take longer to find someone. How do you determine a rental price? Shop your competitors who lease duplexes or similar size apartments.
What if they trash the place. That’s ok because you will collect first months rent and a deposit
equal to one months rent! Evict them for non payment. Only takes a couple of weeks once you file with the county. The sheriff may even help put their crap on the street for a nominal fee in some counties. Then, find another renter. Just put a cheap classified ad in the local paper every week.
If you do a good background check you shouldn’t have problems in most cases. If you don’t do a good background check you WILL have problems.
If you don’t qualify for a conventional mortgage you can get
an “Investor” mortgage. But you’ll have to put money into the deal too
probably a 10% - 20% down payment. But you are creating a monthly positive
cash flow for as long as you own the property, if you structure the deal correctly.
Imagine what you could earn if you own 2 or 3 duplexes?…
How do you find a duplex? Use a GOOD - Experienced realtor. Don’t hire the first one you meet, interview at least 3 minimum.
Anyway, with the foreclosure market increasing and homeowners losing their homes, people will always need a place to live and I foresee an increase in people renting their residences.
