Im seeing these people get mortgages for the sake of using it for a rental for profit on top of them having another mortgage (the one they live in).. for those who do that how do you deal with vacancies? When you have to pay $2000 on that vacant property on top of paying your mortgage for your primary residence
Dealing with vacancies
byu/Any_Camp7676 inrealestateinvesting
Posted by Any_Camp7676
7 Comments
You have to make sure you are prepared. But as I have said over and over on here I’m not sure single family homes makes sense anymore unless you are buying it with cash and it will appreciate. Vacancies, maintenance, repairs, and increased taxes and insurance are eating all the profits.
You put some money aside for it anticipating the vacancy. Or be efficient enough to not have vacancies.
We have mostly duplexes. We only buy if one being rented pays all or most of the mortgage. That way we aren’t losing much, if any, if one side is vacant.
Need to pencil in vacancy into any rental property calculation.
With Money. You need to have money set aside. Even when you have a tenant in there paying rent you need to set aside money for vacancy and repairs.
You incorporate the cost of tenant turns, both vacancy time and repair time, into your calculations.
It helps to do a level of finish on the property that tenants want to rent your properties, and then offer discounts on multi-year leases.
Sometimes you just have to pay vacancies. Totally sucks.
I currently have 5 of my 12 units vacant. In the past 3 months: 1 person died, 1 person bailed on their lease (skipped state), 1 eviction went through, one is getting a major remodel and 1 I bought last week.
So I have 5 units empty in the dead of winter. Between lost rents, plus utilities, plus snow removal I’m out about 7800 a month for the foreseeable future.
When it rains it pours.