We're working on buying a house that will make a great rental. Right now the place is a shambles. Good house, but no one has done anything (right) to it in probably 30 years. If we get the bank that owns it to see the light we'll pick it up for well under what it could be worth, spend a few weeks and $15K on a complete renovation, and have the nicest house on the block to rent out. All new floors, paint, windows, kitchen, bathroom, light switches, outlets, fixtures, appliances, the works. In 60 days it will be worth more than we will have in it. In less than 15 years it will be paid for, all by renters. I figure a few more done the same way should be a pretty good little investment.
Right now the bank seems to think it's worth about $10-12K more than I'm willing to pay for it. Realtor says, hey, they have to get their money out of it. Well, no, they don't. We did our homework on the place. The original owner had it paid off, and basically gave it to one of the kids. She took loans out on it that she couldn't pay, now the bank has it. Not our fault they were stupid and greedy enough to either make bad loans, or buy bad loans. I have zero sympathy for anyone involved, except the poor guy who worked his butt off for 30 years to pay for that house only to see his kid lose it.
But I digress. We have some friends who own half a dozen rentals, and they have very few problems with renters. They have minimum requirements (income, job, etc), do credit checks and generally have their stuff together. It's worked well for them since the 1970s. We'll give it a shot.
