JosiesJourney

If you have that much cash losing value in a uk account you'd be better off asking an IFA about smart investors. These are good for novices and attract a low fee.It looks like base rate will climb over the next few years and you'll be hot for tax as well as interest on a rental. Hargreaves lansdown, nutmeg and many banks - including US banks provide these so you can spread your risk across lower risk funds or medium risk funds....

Giantaxe

You mean you can get a foreign tax credit for foreign taxes paid, which may or may not cover the whole amount paid. I've heard nothing to suggest that such a credit would go away under Trump's plans; what I do know has been proposed is doing away with the state and local tax deduction from taxable income. In IRS parlance, credit and deduction have different meanings.

mrken30

This is what I had heard, and just thought they may extend that to foreign taxes. It's still early days. Oregon does not allow me to deduct foreign taxes against State income tax. There seems to be always slight difference to what States allow as deductions and what the Feds allow.

Pulaski

I really wish you'd stop thinking!

ddsrph

I agree with Pulaski on living close to any rental property you have. It would also be a big help if you are handy with home repairs and maintenance. Overall it is not something I would want to do. Having three mortgages and depending on renters to pay their rent and not destroy your property. It can work out great or be the biggest nightmare you could imagine.

mrken30

Doing home repairs on rentals soon gets old, find a good maintenance company or handyman. I would plan on the occasional big bill. We had a bill for almost $5000 because the tenant did not mention that the faucet was dripping underneath. They would just mop it up each day and didn't want to bother me about just a little bit of water. 6 months later the floorboards were quite soggy to say the least.

As for damage, you have to separate all emotions about the fact it is your property, which was hard at first.

Also a lot of tenants act like children, they want everything done for them. They get emotional about small things like leaves on the parking lot.

Most renters are really eager to pay their rent on time

fakey

This is quite timely for me. I also have some questions - if you don't mind ?
Essentially I am trying to find good ways to analyse potential rental investment.
A) is there a reliable way to check occupancy rates / rents in a given area ?
B) how trustworthy do you think realtors actually are ?
C) are there reliable maintenance co's / property mgmt co's out there ?
I got about a million questions actually, but maybe I'd best leave it there for now - lol

Pulaski

A) Not really, but if you only have one or a few homes the average isn't especially meaningful to you.

B) Not very, typically, but that has little to do with rentals because most realtors don't "do" rentals.

C) Yes, but if you rely on one regularly you can easily end up giving half your net income (after the mortgage payment), to the maintenance company.

mrken30

A) is there a reliable way to check occupancy rates / rents in a given area ?
Reasonably reliably. There are sites like rentometer.com that will give you a good idea. Speak to letting agents. Look on Craigslist and see how quickly properties rent.

B) how trustworthy do you think realtors actually are ? Some are better than others
C) are there reliable maintenance co's / property mgmt co's out there ?
Yes, but you need to manage them. Also using a company that specializes in rentals is useful. eg if a contractor finds mold, you don't want him speaking directly to the tenant about it.

Property management companies are hard, you do need to keep on top of them, but ultimately you are probably not their biggest customer and they manage several properties.

The most important thing about being a landlord is screening. Also find out if you local Sheriff's office runs landlord meetings.

If you are serious about this https://www.landlordology.com/ is a useful site.

fakey

Is there a better alternative ?

fakey

Thanks - I am serious, but I'm also not in the business of losing money.

fakey

Another question would be - in theory I could purchase property with my own funds - among other factors, obviously the upside is theoretically a greater percentage of potential profit - the downside is - I'm risking my own money -
What do you think ?

mrken30

We have a 1 day landlord course run locally by the local Sheriffs department. I would highly recommend trying to find one nearby. I went to the course before buying my first rental. If you invest now, look at it as a long term investment. I think we are in a bubble at the moment.

An interesting site to look at is roofstock.com I think their properties are a little over priced, but it will give you an idea of the returns and how much/where to invest.

You need to look at job market, vacancy rates, local legislation, crime, etc before buying anywhere.

mrken30

Depending on the area, you may have to put down 40% to get any cash flow. Don't over leverage yourself. Property makes money long term in 80% of cases, maybe more.

Pulaski

Assuming that you are averse to losing your own money, the distinction between your money and borrowed money is illusory, and the upside is greater if you borrow money, not if you buy without borrowing.

If you buy a house for $100k without borrowing and rent it for $10,000/pa, your gross return is 10%. That is the maximum upside, it's as good as it gets!

If you bought the same house for $100k, but put down $20k and borrowed $80k at 6.25%, then rented it for $10,000/pa you would pay $5,000 in interest and have a gross return of $5,000 on your invested equity of $20k, ..... which is 25%!

If you expect gross income of $10,000 then invest $40,000 and buy two houses. You have the same income as if you had invested all your $100k in one house, but you only invested $40k .... in theory you could buy another three, though another two would be more realistic. In any case you have more income streams and have diversified your risk because if one tenant defaults you still have three others that are paying rent.

I think the easiest mistake to make is to buy houses that are two "nice", too expensive. Tenants are often strapped for cash, so in any given area you will probably find many more tenants willing to pay $1,000 than $1,500, so if buying a house to rent, aim to buy a decent house in a decent state of repair, but at the cheaper end of the market in whatever area you are looking to buy in. That's not to say that there aren't tenants will to pay more for a nicer house, but there are fewer tenants able to pay the rent the more rent you are asking.