Tell me about your experiences with investment/rental properties

In My Humble Opinion
21

If your only goal is to make money, then I can’t offer any helpful perspective, as we have never done that.

However, my husband and I own two properties in the State of Hawaii (specifically on the Big Island). Both were bought with the idea, “Rent them for now, but eventually this is where we will live.” One property is suitable for long-term rentals; the other rents as a vacation condo.

Based on that experience, which may or may not be relevant to you, my advice is:

  1. Get a property manager you trust and can work with. Yes, they will take some of “your” money in fees, but the on-the-ground presence and having someone else to find tenants will be worth it.

  2. Brace yourself for the occasional asshole tenant, at least if you are looking at long-term rentals. The worst we have ever experienced on the vacation rental side is unbelievable stories about why something broke. Long term renters, on the other hand, can be a headache. We’ve been lucky overall, but have still experienced damages that we can’t do anything about because of bad tenants.

22

Make sure the tenants have tenant insurance. Put a clause in the lease “Tenant must obtain tenant’s insurance and provide the landlord with a copy of the insurance policy and a receipt showing payment.” Even if they don’t do it, it lets you off the hook for any damage to their property.

State on the lease exactly how many people will be living in the place. Tenants will say “me, my husband and two children,” and then move the whole family in.

Late fees: If the rent is paid after the 5th, add a 5% late fee. After the 10%, a 10% late fee. After the 15th, eviction proceedings will be started at the tenant’s expense.