Should I turn a house into a rental, flip it, or sell it outright?

[TwoShoots]

they havent adjusted their rent in TWENTY YEARS. So they have a renter paying $650 a month for a 3 bed, 2ba, 2 car garage house. Luckily, we have a familial relationship that allows for very blunt honesty, which is why i called both of them idiots to their faces.

Holy cow that's probably a $1500/month house if it's clean and not in NE okc. They need to raise rent every single renewal until it's even with the going rate.
If they don't, when you inherit it you need to do the same.

Sell it. Get as far away as possible. I'm going through this now. Haven't been paid since mid December. Whoa is me stories. And the state it's in doesn't allow for me to remove them without a long legal process.

Screening, screening, screening. Be deliberate in who you rent to, even if it sits dormant a while.

If you do decide to rent the home, I recommend to NOT rent to a relative under any circumstances. They will be late on rent, fail to pay rent and if they create damage they will expect you to hustle over there and repair things. I rented to my son and his wife a home for $220.00 and repeatedly they took advantage of me. I finally gave them $1,000 to move out and I took possession.

^^^ I second this, and third it. Family and business do NOT go together, unless you're just giving checks to your grandkids. That is a business expense once you start collecting rent and have a nest egg. 100% deduction.

 

[CODE_3]

Need advice from interior decorators, investors, real estate professionals, landlords…

My wife and I are trying to figure out what to do with an inherited property…buy out her brother’s interest and use it for a rental, flip it, or sell it as is. It is located near MacArthur and NW 122nd street. A 3 bed, 2 bath, 2 car garage home about 1450 square feet. A pretty solid little house…impact resistant roof installed in 2014, new windows replaced throughout, HVAC about 10 years old. Not sure which way I want to go with it…

Best sites to obtain information…I’m aware of Realtor.com, Zillow.com and Homes.com, and the Oklahoma County website. Looking for rental information for that area. Websites, calculators, anything would be helpful in order to make a decision.

I’ll take any information, advice, criticism from anyone. Trying to drown myself with information…


EDIT: I added this in the body but thought I would add it here for any new readers...
Additional info: I have a basic knowledge of renovating. I have “fixed-up” three other houses to include scraping popcorn ceilings, texturing walls, spraying/painting interior and trim, laying tile (too old for that now), hanging prefab cabinets, basic electrical, etc.

I am retired so time is not a factor like it used to be. The property is about 10 miles from my house and could be checked on.

This is all cash, no bank involvement. Have other investments and thinking about not putting all eggs in one basket. Not sure of tax ramifications other writing off tools for the repair work.

Brother-in-law is not interested as he lives out of state.

I have no clue what people are paying for rentals in the last 20 years.

If you ever consider selling, please keep me in mind. I am a Realtor here in the OKC metro area

 

[PBramble]

Screening, screening, screening. Be deliberate in who you rent to, even if it sits dormant a while.

It's a family member who suddenly had medical issues.

 

[Parks 788]

If I were you, I'd make it a rental. Especially, if the house is paid off and you are pretty handy with some renovations and repairs. Sounds like you may be retired? If so, the absolutely. If it ends up not being your cup o tea then sell it.

One thing I'd recommend if you listen to pod casts is to listen to the Bigger Pockets pod cast. THe entire podcast and discussions are about residential rental properties. I listen to them quite a bit and it has great info. One thing I hear a lot is you MUST be very discriminating on who you rent to. Full background check, work checks, etc, etc. If you are retired, house is paid off and you have the skills and time to manage it then do it. Don't know the area of the house but probably going to get from $1700-$2200 per month. THats some nice cash flow. Also, if paid off, it may be work fixing it up to make it rental ready then paying a quality property management company to deal with the tenants. They would take 15%-20% to do everything. That's not a bad option for you to sit back and collect 80%-85% of the monthly rent.

 

[Parks 788]

Sell it outright, being a landlord is cringe and gay. Same with owning multiple properties. Just own one house and some land for yourself and your family and call it good. Too many Blackrock and State Street wannabes in the world as it is.

WTF!?!?!

 

[Steelers Fan]

I would keep and rent it. Most people can't come up with money to start a basic business, but yours was just handed to you. If you sell it, you'll spend it. At least a chunk of it. Invest in yourself somehow, Warren Buffet says so. It takes 20% down to buy investment property, not first-time buyer closing cost paid, not 3% 5% 10%. It's a chunk of money to throw down with no experience. Almost everyone that has built wealth has had investment real estate in their portfolio. Not that hard to do but all of the above said is true, positive and negative. I'm just your average Joe, 1.5 yrs of college dropout, but have always had a good work ethic. I was just tired of school. I struggled through life like many with all the challenges and troubles to keep me humble. My JOB (Just Over Broke) kept me afloat. When my Wife and I purchased our 2nd house we were in a bit of a bind. We had to sell our 1st house prior to getting 2nd. I had just enough to purchase 2nd but not enough income to satisfy mortgage company for even a couple months to prepare 1st for sale. Our realtor (used on 1st and 2nd house), fully knowing our financial situation, suggested renting. But not really, kinda?!? She said draw up a contract, have a buddy sign, show positive income and circumvent the mtg.co. I did so, that was 1996. After moving into 2nd and while painting/preparing the 1st, I started checking into rentals. I dove in. That became our 1st rental. In the early 2000's when the market took a dive and was still falling, I decided to save my own ass. I borrowed my own 401k money (pulling a chunk of it from descending stock market), bought a 2nd rental, saved my 401k from crashing while paying myself 1.5% interest back and pausing it from the down market. I never siphoned the profits and always poured it back into property, either by repairs or paying principal ahead. My wife's credit card habits cost us a couple times and I had to refinance a couple times but I was still gaining/winning despite the self-inflicted wounds she cast on us. Then there came a day just after covid, after 26yrs of svc and just completing inventory for the JOB, I was let go. Quite devastating for most, especially when you think about interviewing at age 57. But I had a couple aces up my sleeve, two rentals. I never went to work again. Since I had them paid for, I was in pretty good shape and became retired (5-10yrs ahead of schedule). There was a little bit of a lifestyle adjustment but not much. Hell, I was still buying guns (collecting) on OKSHOOTERS, Gun Broker, Wannemachers, but it did delay the purchase of a new car for my wife. Income from 2 kept me from feeling blue. I out managed the managers at my job and they were always jealous of my side investments. I had bought and sold a couple of homes to upgrade properties, without a realtor. I wrote my own contracts and did my own scheduling, inspections, etc.. with required associates and title companies. The manager(?) that most willingly and delightfully let me go from my JOB recently met his demise and is selling and downsizing his residence and toys, also having to go find a job. I've been tempted by spite to put a quite modest bid on his 40 acres near Perkins, purposely letting him know who is bidding. The irony would be quite satisfying and the possibility palpable. For me, A little more work and a little less play made Jack a content boy. Benefits need no explanation, there's just a small amount of them listed on above post. I live on an acreage next to Oak Tree Country Club in Edmond. My neighbors are a Surgeon and mostly formally educated business owners. I'm just your average H.S. Diploma Joe.

 

[DreamingMan]

I want real estate. My wife does NOT. We compromised and buy REITs instead.

I like high yield ETFs, +5% yield stocks (MO, OKE, EPD, ENB, JNJ, PG, XOM, CVI, ET, DUK, WMB (not all +5%, but they pay every qtr)). A little heavy on energy, but the need for e-n-e-r-g-y ain't going away. Low PE w/ decent yield = $$$ in your pocket w/ low risk.
Disclaimer: i'm not a broker and i own several of these (waiting to see if MO comes down this year).

 

[GlockPride]

I like high yield ETFs, +5% yield stocks (MO, OKE, EPD, ENB, JNJ, PG, XOM, CVI, ET, DUK, WMB (not all +5%, but they pay every qtr)). A little heavy on energy, but the need for e-n-e-r-g-y ain't going away. Low PE w/ decent yield = $$$ in your pocket w/ low risk.
Disclaimer: i'm not a broker and i own several of these (waiting to see if MO comes down this year).

Oh, we have some of those too. Just trying to diversify a bit.

 

[TwoShoots]

It's a family member who suddenly had medical issues.

 

[Rocky Dezelle]

Need advice from interior decorators, investors, real estate professionals, landlords…

My wife and I are trying to figure out what to do with an inherited property…buy out her brother’s interest and use it for a rental, flip it, or sell it as is. It is located near MacArthur and NW 122nd street. A 3 bed, 2 bath, 2 car garage home about 1450 square feet. A pretty solid little house…impact resistant roof installed in 2014, new windows replaced throughout, HVAC about 10 years old. Not sure which way I want to go with it…

Best sites to obtain information…I’m aware of Realtor.com, Zillow.com and Homes.com, and the Oklahoma County website. Looking for rental information for that area. Websites, calculators, anything would be helpful in order to make a decision.

I’ll take any information, advice, criticism from anyone. Trying to drown myself with information…


EDIT: I added this in the body but thought I would add it here for any new readers...
Additional info: I have a basic knowledge of renovating. I have “fixed-up” three other houses to include scraping popcorn ceilings, texturing walls, spraying/painting interior and trim, laying tile (too old for that now), hanging prefab cabinets, basic electrical, etc.

I am retired so time is not a factor like it used to be. The property is about 10 miles from my house and could be checked on.

This is all cash, no bank involvement. Have other investments and thinking about not putting all eggs in one basket. Not sure of tax ramifications other writing off tools for the repair work.

Brother-in-law is not interested as he lives out of state.

I have no clue what people are paying for rentals in the last 20 years.

You may wind up selling on owner-finance. Find a buyer who cannot get bank financing, and likes fixing up houses. Sell it as-is, with a 20% down, keep the loan yourself. Monthly income, private loans sell well, after the first year of steady payments.