7 ms·

What were some of the unanticipated challenges they faced?

jareklupinski 2y ago
they lived in NYC and the apartment was in Florida, so even the smallest bumps in the road required a round-trip flight just to start figuring out how to solve the issue basically if the goal was "to make money", there was never a viable path once the rubber hit the road (if they chose a nearer place, the initial costs would never be realized)
- bartonfink 2y ago
  that is a uniquely boneheaded approach to managing a rental property. you can say "there never was a viable path" about anything if you chucklefuck your way through it instead of doing it well.
  - jareklupinski 2y ago
    if "doing it well" means doing what these people are doing: https://news.ycombinator.com/item?id=40254573 https://news.ycombinator.com/item?id=40254573 it may have been for the best :)
  - bombcar 2y ago
    Even when you're not renting remotely (which is the worst possible option in many cases) you still have tons of other things that can come into play: * Bad tenants (lost rental revenue, eviction costs, property damage, and they're likely judgement proof so that money is just gone) * No tenants (price too high, nobody wants to move, nobody wants to rent, etc) - rentals should be calculated on 20% vacancy. * Other property wear and tear and damage (landlords often very badly budget for big ticket items; to be fair, owners are really bad at it too. The IRS depreciation tables are not gifts; you will pay about 1-4% of the value or more a year in repairs, etc. * Strange legal issues can crop up, not limited to liability, tenant lawsuit defense, etc. But your property can also be eminent domained, declared a superfund site, or more. Sure, it's unlikely, but if you only have one property and it happens, it's going to hurt. * And the biggest issue from there being a viable path (outside of appreciation gambling) is that you're competing with other single-family landlords who don't account for or care about the issues above, which drives rental prices down to "a bit more than mortgage payment + taxes". And then if you succeed with the appreciation, unless you relatively constantly churn your property, you're missing out and falling behind what it could do elsewhere. Appreciation when you're 20% down hits 5x harder than appreciation when you're 100% owning it outright, and every payment brings you from one to the other. There is a reason that professional real estate companies that invest in housing want to invest in multi-family dwellings, because it lets them control for some or all of the risks above. If you want to move from gambling on appreciation to actually being a profitable landlord, you end up imitating them.

they lived in NYC and the apartment was in Florida, so even the smallest bumps in the road required a round-trip flight just to start figuring out how to solve the issue basically if the goal was "to make money", there was never a viable path once the rubber hit the road (if they chose a nearer place, the initial costs would never be realized)

bartonfink 2y ago
that is a uniquely boneheaded approach to managing a rental property. you can say "there never was a viable path" about anything if you chucklefuck your way through it instead of doing it well.
- jareklupinski 2y ago
  if "doing it well" means doing what these people are doing: https://news.ycombinator.com/item?id=40254573 https://news.ycombinator.com/item?id=40254573 it may have been for the best :)
- bombcar 2y ago
  Even when you're not renting remotely (which is the worst possible option in many cases) you still have tons of other things that can come into play: * Bad tenants (lost rental revenue, eviction costs, property damage, and they're likely judgement proof so that money is just gone) * No tenants (price too high, nobody wants to move, nobody wants to rent, etc) - rentals should be calculated on 20% vacancy. * Other property wear and tear and damage (landlords often very badly budget for big ticket items; to be fair, owners are really bad at it too. The IRS depreciation tables are not gifts; you will pay about 1-4% of the value or more a year in repairs, etc. * Strange legal issues can crop up, not limited to liability, tenant lawsuit defense, etc. But your property can also be eminent domained, declared a superfund site, or more. Sure, it's unlikely, but if you only have one property and it happens, it's going to hurt. * And the biggest issue from there being a viable path (outside of appreciation gambling) is that you're competing with other single-family landlords who don't account for or care about the issues above, which drives rental prices down to "a bit more than mortgage payment + taxes". And then if you succeed with the appreciation, unless you relatively constantly churn your property, you're missing out and falling behind what it could do elsewhere. Appreciation when you're 20% down hits 5x harder than appreciation when you're 100% owning it outright, and every payment brings you from one to the other. There is a reason that professional real estate companies that invest in housing want to invest in multi-family dwellings, because it lets them control for some or all of the risks above. If you want to move from gambling on appreciation to actually being a profitable landlord, you end up imitating them.