Discussions

I'm a rookie investor looking at possible revenue property. It is a mobile trailer home. Looking for thoughts, experiences, ect. Good investment, bad investment, and so on. Looking for the good, the bad and the ugly.  
 
My thought is, you can't really go wrong owning property.

Until some self entitled renters think you charge too much and are making millions.....threads pop up all the time on this site. Then stuck fixing damage, unpaid rent, etc. Good luck.

Most trailer court owners won't let you rent out your trailer. Before you buy contact the trailer court owner and ask what their policy is on renters

Don`T Do It

Don’t get a mobile, their value creeps up so slowly and the upkeep makes it barely worthwhile. Find a small home instead where you own the land. You will need to put down 20% since it’s not your property. And keep good records for income tax time.

Infoman said "I'm a rookie investor looking at possible revenue property. It is a mobile trailer home. Looking for thoughts, experiences, ect. Good investment, bad investment, and so on. Looking for the good, the bad and the ugly.     My thought is, you can't really go wrong owning property. "

You can and things will go wrong. It's just part of the game. Run the numbers and see if things mesh.

I'll tell you exactly how it will go wrong.  
 
The only way a revenue property works is if you somehow get it for next to nothing or if your plan is to have the rent pay off the mortgage so that you have a rental property to generate extra income when you retire (also 20 years of appreciation is the only way flipping the property makes sense...don't expect to buy anything and sell it in 5 years for a profit after you've paid all the commissions, transfer taxes and legal)

Cashflow...Does the rent cover the payment, taxes, upkeep and everything else?  
The investment... Consider the time to recover your down payment. Five years or more?  
The time... You will be babysitting this project or paying for property manager. 3am plumbing issues, lockouts, etc.  
 
Be critical and always think of what is the worst that could happen.  
 
If you think it is still a good investment I wish you luck.

You never know what kind of renters you will get even if they look great on the surface, they can turn on you in a heartbeat.  
Also, have a very comprehensive rental agreement - more than the one of the tenancy website.  
You also should be aware the tenancy board will almost always side with the tenant in case of complaint and the onus is on the landlord to 'prove' everything.  
Long story short, I wish someone told me all this before I made that mistake of having a revenue property!  
Good luck to you!

Renters are a huge PIA !!! many of them wreak everything and dont pay rent to boot, I have seen the good, bad, ugly and REALLY ugly but if you stay on top of them and get the place for a decent deal a rental can add to your retirement...if you dont go insane bahahah

Revenue is definitely a good investment. However, I would stay away from mobile homes as they don’t typically increase in value as quickly as a fixed residence. Mobile homes do tend to nickel and dime you unless it’s relatively new. They can have freezing up issues as well.  
 
As others said make sure the rent pays ALL your expenses. Renting can be a pain once in a while depending on the type of property you purchase. But remember it is paying for itself, increasing in value, and giving you a better retirement when the time comes if you have it long enough.  
 
Being a landlord does take an element of patience and being a “do it yourself” kind of person helps. All that being said I do have a 4-plex for sale if anyone’s interested.

Infoman said "I'm a rookie investor looking at possible revenue property. It is a mobile trailer home. Looking for thoughts, experiences, ect. Good investment, bad investment, and so on. Looking for the good, the bad and the ugly.     My thought is, you can't really go wrong owning property. "

private messaged you re mobile homes. Would agree with a lot that has been said . Mobile homes can be a lower investment than say a single family home or fourplex. One thing that mobile homes have is that you can depreciate them 10% a year vs a regular stick built at 5%.  
 
Would be interested in how much the four plex is going for ( price )from the last poster.

I hope you are not depreciating your rental houses. You will be in for a big tax bill when you sell!!!

Revenue is definitely a good investment. However, I would stay away from mobile homes as they don’t typically increase in value as quickly as a fixed residence. Mobile homes do tend to nickel and dime you unless it’s relatively new. They can have freezing up issues as well.  
 
As others said make sure the rent pays ALL your expenses. Renting can be a pain once in a while depending on the type of property you purchase. But remember it is paying for itself, increasing in value, and giving you a better retirement when the time comes if you have it long enough.  
 
Being a landlord does take an element of patience and being a “do it yourself” kind of person helps. All that being said I do have a 4-plex for sale if anyone’s interested.

NOYB said "I hope you are not depreciating your rental houses. You will be in for a big tax bill when you sell!!! "

When you buy a rental property you are doing it to make money. The way you make money is by having someone pay your mortgage and expenses to the home and on the resale of the home. If you make $5000 after expenses each year you pay taxes on that $5000 in that tax year.  
 
If when you sell the home ( condo or stick built home) you pay taxes on the appreciation or on book value of the home. If you buy a traditional home for $200,000 and sell for $225,000 you pay taxes on $25,000 if you didn't depreciate the home.  
 
People always say Rental mobile homes do not appreciate as fast as traditional homes. If you buy a mobile home for $100,000 and depreciate it by $20,000 ( book value $80,000) and resell it for $110,000 you pay taxes on $30,000. Keep in mind you did not pay taxes on the $5000 each year as the depreciation made that $5000 taxable income zero dollars.  
 
The point is that there are two ways to get a gain on your investment. I would also agree that before you get into the game crunch the real numbers in a worst case scenario so you know what you may experience.  
 
The unknown  
 
To help people understand the investment to buy a four plex how much are you wanting for your four plex??

Infoman said "I'm a rookie investor looking at possible revenue property. It is a mobile trailer home. Looking for thoughts, experiences, ect. Good investment, bad investment, and so on. Looking for the good, the bad and the ugly.     My thought is, you can't really go wrong owning property. "

In my opinion, if you buy a mobile home for revenue, you will be a landlord reporting to a landlord (The mobile home park owner).  
 
Court owner rules are all different, so depending on where this is you need to check on the rules and regulations of the specific mobile home park and if you are able to rent out the unit and what rules apply. Some may have strict regulations. I don't blame them for doing that. their Court - their rules.  
 
You are not owning property in a mobile home park. As a mobile homeowner you are merely renting from the landlord, so you as a buyer would be sub-letting to your renters with anything you buy.  
 
Kelsey Bay is a different scenario. It's the only Mobile home area in Brandon where people own their own lots and is a nice area with pride of ownership.  
 
With the past turbulence of certain mobile park homes in Brandon (see the Meadowview/Campbell's thread), you may have no control as to when changes will arise (new ownership, sold development, etc.)  
 
Good for you for wishing to invest in revenue property. A single detached family home would be a better investment in my opinion.

I had a tenant who refused to pay rent, didn't miss rent just flat out refused until I did X/Y/Z...doesn't work that way I told her but regardless took 6 months to finally get her out.  
 
I had a tenant who built a dog pen INSIDE the living room. Literally built a chicken wire dog pen in the living room, destroyed the carpet. $5000 after all said and done, but they guy was broke/jobless so suing him netted me ZERO  
 
I had a tenant sneak out in the middle of the night one February...left the door open. Furnace ran non stop until the breaker tripped...pipes froze/burst...raccoons/squirrels/mice moved in...you can fill in the rest  
 
One tenant called saying the laundry room was flooded, so I send the plumber over to fix/look at the issue. Turns out they moved the washer but neglected put the drain hose back into the drain so as the washer would empty it was emptying right onto the floor. Punchline? They did 3 loads and had a load going when the plumber got there...didn't even stop using the washer as 2 inches of water was piling up on the floor.  
 
That wasn't an attempt to derail the thread into a tennant bashing story...tennants have as many bad land lord stories...but just to give you an idea what to budget for. Make sure you leave a lot of room for maintenance/bad rent cheques/etc.

The 4-plex that I have would be valued about $350,000. How I got started was I bought a revenue and lived in part of it. It gives you a living place while others are paying the expenses.

We got started in rentals with a duplex where we lived in one unit.  
Real estate is a great path as long as you don't look at it as a Get Rich Quick Scheme. It takes time to do it right.

The unknown said "The 4-plex that I have would be valued about $350,000. How I got started was I bought a revenue and lived in part of it. It gives you a living place while others are paying the expenses. "

Like a bonifide 4 plex? Not a converted old house with 4 units? I’d be interested in that...that’s a price you could make money on...

I believe it was originally a government building. All 3 bedrooms.

investing can be a great option for long term goals. Sent you a PM.

It’s a lot harder to make money flipping that you might think...especially in the Brandon market right now...and the new mortgage rules don’t help. If you could find a house that would work for a flip you’d be further ahead renovating it into 2 suites and renting it.

MrDobalina said "    The unknown said "The 4-plex that I have would be valued about $350,000. How I got started was I bought a revenue and lived in part of it. It gives you a living place while others are paying the expenses. " Like a bonifide 4 plex? Not a converted old house with 4 units? I’d be interested in that...that’s a price you could make money on... "

Here is were someone looking to invest needs to gather a lot of info. A fourplex for $350,000 may be a good deal ( at $75,000 a door) .The price of purchase reflects the numbers.  
 
The first number is the current rents. If the rents are $1200 a month it is a lot different then one with rents of $795 a month.  
 
Research with real expectations is the key to a profitable investment . The question always comes to the revenue minus expenses. Not the ones jsut today but in the future.

Oh Canada said "    MrDobalina said "    The unknown said "The 4-plex that I have would be valued about $350,000. How I got started was I bought a revenue and lived in part of it. It gives you a living place while others are paying the expenses. " Like a bonifide 4 plex? Not a converted old house with 4 units? I’d be interested in that...that’s a price you could make money on... " Here is were someone looking to invest needs to gather a lot of info. A fourplex for $350,000 may be a good deal ( at $75,000 a door) .The price of purchase reflects the numbers.     The first number is the current rents. If the rents are $1200 a month it is a lot different then one with rents of $795 a month.     Research with real expectations is the key to a profitable investment . The question always comes to the revenue minus expenses. Not the ones jsut today but in the future. "

also make sure you do your research  
 
a fourplex falls under different rules then 3 suits and under so look at the RTB and pay the fee to see what the rents are registered at  
 
the biggest difference is with 4 units you can not raise the rents with new tenants with out applying to the RTB which can be difficult and time consuming so it makes it harder to keep the rents inline with what ROI you would feel comfortable with and the market rates. The plus side is you do have one more suite to offset costs  
 
Basically dont just go word of mouth, altho real stories are helpful do your own digging so you really know what you are getting into

with regard to your 4 plex we would be interested and need more information as to  
location, building type and age, current rents etc.

So if you had a rental property that you could buy for say $65,000 and rented for $850 a month would that be a good investment?  
 
Since there seems to be some investors looking at this post what type of return per year, percentage wise, on a 4 plex that sells for $500,000 ( $125,000 a door?) Keep in mind that is $125,000 cash down. What type of rents would you need?

Most investors are looking for a return on their money (capitalization rate or cap rate) of 6% on a new building or 8-10% on an old building.  
Income minus expenses divided by cap rate gives you your value.  
For example: new duplex with $2500/mo rent and $500/mo expenses=$2000/mo X 12= $24000 annual income divided by 0.06 cap rate gives you a value of $400,000.

Oh Canada said "So if you had a rental property that you could buy for say $65,000 and rented for $850 a month would that be a good investment?     Since there seems to be some investors looking at this post what type of return per year, percentage wise, on a 4 plex that sells for $500,000 ( $125,000 a door?) Keep in mind that is $125,000 cash down. What type of rents would you need? "

on 500k your mortgage is about 2500 per month or 650 a door now do they pay heat, hydro, water? for heat youd need at least another 100 per suite 50 for water 50 for electrical so up to 850 without money for repairs, which for a rental budget extra as even good renters do not treat the house like you do, say another 100 per month for repairs and cleaning dont forget down months say 100 or 1200 pr/yr  
 
 
so  
650 mortgage  
100 heat  
50 water  
50 electrical  
100 per month for repairs and cleaning  
100 lose of rents  
 
so 1050 per door at a min you need to make it work  
 
dont forget your time to look after the place or more money for a maintenance company but if you hang on it it for 20+ years it does help your retirement  
 
i forgot insurance too so add a bit more for that  
 
on a place thats 650 a door mortgage is about 350 so depending on how big and what they pay you can figure out what you need  
 
Edited by traveller, 2018-04-01 09:24:41

What constitutes expenses? Every dollar? Or is it just hydro & property taxes?