Comments on: Tenants Paying My Mortgage

By: Jeff

Jeff — Wed, 01 Sep 2010 17:28:38 +0000

Also, you never said how much you put down. Many people misread 100% interest as 100% financed, but if it’s a fully financed purchase, then you have invested nothing. If you’ve invested nothing, you can’t say it’s a terrible investment because there’s no investment on your part at all.

By: Jeff

Jeff — Wed, 01 Sep 2010 17:19:23 +0000

Assuming you’re horrible at business and got a property that only breaks even, if your mortgage is a fixed 30-year, then inflation will drive up rent while your mortgage stays the same. Eventually you will make a profit despite yourself. This article also ignores a slew of tax deductions that landlords enjoy (mortgage interest, taxes, all operating costs, home office, property depreciation, etc.).

You would of course have to figure out all the numbers before you bought a property, but you should be able to beat your 3% ROI by several fold.

By: ltsmash

ltsmash — Wed, 12 May 2010 22:20:29 +0000

its for a retirement nest egg idiot

By: Todd

Todd — Mon, 05 Apr 2010 11:13:48 +0000

I have been buying residential real estate for 8 years. I own 5 houses, a duplex, and 15 town houses. If it cost you nothing to purchase the asset (1o0% financed) then you tied up an asset for nothing. This is VERY rare in investment real estate. But would be good. Yet the real key is cash flow as already stated. If at the end of the month after all is factored in you have more in your bank account than less- you have made a good purchase. People paying my mortgages and expenses has made my balance sheet impressive considering I am not a high wage earner. Think outside the box and do your homework. Anything is risky if you do not understand what you’re getting into.
Happy hunting,
Todd
ending the rat race

By: Pacific

Pacific — Tue, 23 Mar 2010 06:44:58 +0000

I have been a landlord for about 18 years, and there was always “The 100% Rule” with renting: To make a good deal on investing in property and renting it, you should receive, per month, 1% of the cost of the property. So if an apartment costs $140,000, you should recieve $1,400/month in rent. This simple guide formula covers all the costs, like intererest, insurance, repairs, etc.
Landlording is a job, you get paid by increasing your net worth.
As an aside, be careful of the future payments, because there is only one direction for interest rates to go (duhh: up!), and you don’t want to have too big of mortgage paymens that you can’t cover.
There are places to invest that still have the 100% rule covered.
BTW, I sold my rental house 2 years ago, and have invested the money in stock market ETFs and GICs.

By: Carnival Of Personal Finance #249: Who’s Awesomest? Pirates Vs Ninjas Vs Nuns Vs Robots Vs Real Estate Agents Vs Zombies - Amateur Asset Allocator

Mon, 22 Mar 2010 11:05:40 +0000

[...] My Tenants Pay The Mortgage by Four Pillars. This is a favorite lie (or as they like to call it Truth…most Real Estate Agents can’t tell the difference) told by many Real Estate Agents who specialize in working with real estate investors. What they REALLY mean is that you should pay them the equivalent of a 87 mortgage payments to do 15 minutes of work. [...]

By: youngandthrifty

youngandthrifty — Mon, 22 Mar 2010 00:46:26 +0000

Hmm well, if anyone in Canada is considering getting a rental property, they better do it soon, because after mid April you’ll need a 20% down payment.

I like the idea of tenants contributing to your mortgage, it generates cash flow (provided that they aren’t picky and you don’t have to spend oodles of cash to maintain the property), and the property will appreciate in value over the long term, when you sell the property at a later date.

By: Jess V.

Jess V. — Sun, 21 Mar 2010 15:47:36 +0000

With the example you gave, my answer is Yes, that’s a bad investment.

But if the renters are paying for all the expense such as mortgage, maintenance, insurance and etc… And have a positive cash flow, then it is a good investment. Even without RE appreciation, increased in equities, hedge against inflation and tax advantages.

Another alternative is REITs. I own both REITs and Rental.

By: Eevie

Eevie — Fri, 19 Mar 2010 02:33:18 +0000

we have someone paying off the mortgage on our rental…the actual rent covers the total mortgage (principal and interest) plus taxes plus strata fees. I am using a spreadsheet to calculate the cost of the rental so that when the time comes to sell, i will know in the long run if the we have made money or not. So far, (after 4 years) i need my rental to appreciate by $15,000 to cover the cost we have put in…for maintenance & repairs & other sundries. There are also tax deductions to take into account but I have not included that in my spreadsheet. We are not slum lords and perhaps put a bit too much into upkeep (ie., painting, floors, new furnace, roof), but overall, we have had excellent tenants and the rental has appreciated by $50,ooo-$60,000. Only when we finally sell will we know if it was worth it!

By: A Lap Of The Blogs : WhereDoesAllMyMoneyGo.com

A Lap Of The Blogs : WhereDoesAllMyMoneyGo.com — Fri, 19 Mar 2010 02:26:45 +0000

[...] Tenants paying my mortgage by Four Pillars. [...]