5 Rules of Rental Property

Follow these 5 rules and owning rental property will be a rich and rewarding experience. Ignore one (or more) of these rules and your rental property dream could become a nightmare.

0:00 Introduction
01:41 Rule # 1
10:49 Rule # 2
14:19 Rule # 3
16:29 Rule # 4
21:01 Rule # 5

[philmarsh]

The 12% productivity is the EXACT reason I didn't buy real estate. Good luck trying to find a property that does this. In my area, you'd be hard-pressed to find a house with gross income/price >6%.

[habitandoproperty]

Phil:
1) I never ever got a 12% Productivity...
Max 7%
I have to improve that...
2) equity, every deals came with 25% in it...
3) 1 year of cash in reserve...
4) insurance 150% of the value...
5) Every property I would love to live in it ... Location... Size... Etc.
Thanks for the hints

[eliot]

Phil I bought a property for 60, 000 and I’m at a gross income of 15000 annually. After taxes and insurance I’m at about 13, 000 so 21% return. My equity position is 25%.

[tam]

So happy I came across your channel since you have a wealth of information. I own a rental property in LA for about 25 years. It s been a great experience but I’m Getting older and tired of running it. Thinking about unloading it but don’t know what to do with the sale proceeds without all the tax consequences. Maybe invest in an Opportunity zone property? What is your take?

[se]

Phil, regarding insurance I know of someone who was preparing a home for sale after renovation. Someone broke in and stole all brand new stainless steel appliances. The insurance company denied the claim saying since nobody was continuously occupying the home during the time it was being renovated it was uninsurable.

So they sold him insurance they knew would not protect him in any circumstance as it was disclosed when buying a short term policy.

[mordykatsevman]

Amazing video! How can one see what hedge funds are buying?

[eliot]

Phil the insurance is so important. I came back from out of town and the windstorm ripped off 1/3 of the roof on my rental. I got the roof replaced myself with my reserves then got the insurance to reimburse me.

[sainijat]

If a property is not listed as rental property earlier, then how we can calculate correct future insurance and property taxes. Which may be significantly higher for owner-occupied and rental property.

[JS-ohui]

Love your enthusiasm! Thank you for this helpful info! ☺️🙏

[jimberndt]

Yeah, the productivity matrix got me twisted. A NOI would have to be 30, 000 to get 12% on a 250, 000 investment. If you add the operating costs, gross income would be 40, 400 / 12 = or 3, 366 a month. I agree that finding a 250K investment that could bring 3, 366 a month would be a good find. Did I get the numbers right?

[ShawnDeLaCruz]

What's the difference between Productivity and Capitalization Rate?

[Thejasonrogers]

Can’t wait for the next video !! Amazing knowledge as always

[guy]

Great video, you opened my eyes on quite a few things and I’m happy I found your channel. Thank you Sir for this information.

[mikepeek]

ROI return on investment measured over years if you keep long term. That's the other x factor. Appreciation, good cash flow, renters paying your mortgage, great location, adding value by improving property, and managing who you rent to will bring you the bonus of planting seeds with investments in time.

[ColinStevens]

What is the difference between "In it" and Cap rate?

[avelinovaz]

Phil, I agree with you 100% on your NOI numbers. The problem is finding those deals. In my area the numbers don’t make sense on about 99% of the properties for sale. The remaining 1% that do make sense to buy have about 50 to 100 buyers chasing them. To buy that one property you must have a very strong offer over asking price and now the numbers don’t make sense again 🤷‍♂️

[se]

Phil, around the 14:00 mark you had me laughing 😂😂 Excellent video as always. Thanks!

[dtsai]

After relearning accounting, I realize that we have tons of homeless because we are doing things in the incorrect order. Before any more vacation homes are built we should be finished building affordable primary renter or owner homes for people.

[divertiti]

How do you find the properties that meet these criteria?

[cyberagentstanleydean]

Great insight with wisdom as always thank you Phil God Bless