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Location: Formerly Pleasanton Ca, now in Marietta Ga
10,347 posts, read 8,564,711 times
Reputation: 16689
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as long as you run your numbers and learn little bit about when landlording you could do very well with this. I had a lot of friends and relatives tell me all the bad things about rental properties. Some of those things do happen but as time goes by you will become a better property manager and those things happen less and less, unless you buy in a really bad area.
When I first got involved with mental properties she was more problematic and of course I made less money because of mistakes I made. But as time went on it became much more profitable and there were less headaches to deal with.
screening your tenants will make all the difference in the world.
Best of luck to you.
By the way, my rental properties now provide my income and I no longer work where is all the naysayers that told me about all the problems I would have are still working.
The biggest problem with owning rental houses/apartments etc is the renters. If you are in a high COL area where it's hard for many middle class people to buy or you are dealing with higher-end rentals, you probably have a better tenant pool than in areas where it's relatively easy for middle class people to buy. Then, most renters in lower cost areas tend to be poor or out-right dead-beats.
in retirement no rent or tenant issues can be a huge problem . unlike passive investing real estate carry's expenses . those expenses when rent is interrupted increases sequence risk greatly as excessive amounts of cash is spent down and that money is gone for future growth .
anything that adds to spending in times of negative returns can be especially painful in the decumulation stage
No way would I want to deal with tenants in Retirement.
I used to sit next to an office mate who owned 6 rental houses. I heard just one side of the conversations. Tenants can and do stupid things. After hearing that, I decided that if I wanted to invest in RE, I'd buy shares of a REIT.
We own one side of a duplex and rent it out. My DH owns it and used to live there. We've been renting it out for 15 years and it has never really created a problem for us. We have a property mgmt. firm that does all the renter screening, collects the rent, handles annual walkthroughs, and move-in, move-out inspections. For us, this is a great deal as we used to handle all that ourselves in the beginning. We pay a modest amount monthly for this service, $55 I believe, and a separate fee if there is a renter turnover. In 15 years we have had 4 tenants, only one was a dud. They moved a friend in, and then moved out, leaving the friend (not on the lease) there alone. At least she paid the rent on time! She abandoned the place, but the neighbors notified us and we had the property manager handle it. I guess we've been lucky because we've never had the unit sit vacant at all. We charge slightly below market rent and we don't do annual increases, so our tenants don't move out unless they are actually leaving the area or have just outgrown the unit.
We moved cross-country 3 years ago and things have been fine since then. We pay a neighbor a nominal amount to mow the lawn and report to us anything unusual that he observes. I don't think it would be a problem as long as you do proper screening of the tenants. There are records landlords and property managers can use to research tenant histories and exclude known troublemakers, meaning those with evictions, etc. You can also call their former LL and inquire. We are currently considering selling the property in order to buy a vacation rental which will give us a much higher net income and which we can use for the occasional vacation for ourselves and friends. We will use a property manager in that area for the new property.
Location: Formerly Pleasanton Ca, now in Marietta Ga
10,347 posts, read 8,564,711 times
Reputation: 16689
There are so many resources out there now that unless someone is just not very bright or plain lazy, I can't see how owning a rental is a bad thing in most cases.
Someone says when you're retired vacancy or tenant issues can be a problem. Sure it can. I know people who told me about how much of a headache their rentals are and I can pick out tons of mistakes they made as they told me their stories of woe.
Do your numbers. Factor in vacancy rate, repairs, etc, then invest wisely. Having you retirement in the stock market can be just a risky. If you do so you plan for xx return, Some years are better than others so you average it out.
As I said tenant screening is very important. Today you can run credit as well as criminal and past eviction checks on people. With this it so much less riskier in terms of winding up with bad tenants. Actually go to the area and drive around to get a sense of the area. Talk to neighbors.
Don't buy in crappy areas if you are not ready for it. You can make a lot of money there, but know what you are doing.
Don't buy blindly because someone told you it's a good rental-do your due diligence.
When I was in Ca I had 5 rentals and spent about 3 -4 hours a month on them max. Some months 1 hour, another month maybe a day or two on a repair or something. It still averages out to very little time.
If you are buying a rental in an area you are living, quite likely it's a decent area and you can get decent tenants.
in retirement no rent or tenant issues can be a huge problem . unlike passive investing real estate carry's expenses . those expenses when rent is interrupted increases sequence risk greatly as excessive amounts of cash is spent down and that money is gone for future growth .
anything that adds to spending in times of negative returns can be especially painful in the decumulation stage
Oh geez Mathjack, Look at all the "passive investors" on the stock market retirement boards. Constantly rebalancing and filling buckets and gnashing their teeth every time the market makes a move. Passive my ass.
Sequence risk in real estate? Get real! Even without a renter my properties are appreciating in value. There is no sequence risk in real estate. This guy is 40 and planning on having the property paid off by retirement. You'd have to be a poor investor to have negative returns in that situation.
yeah , honob we know the drill . you think you you know everythig about being a real estate investor and everyone else is view is wrong . i stopped discussing things with you a while ago .
no sequence risk in real estate ? anything in retirement that increases your monthly spending without increasing income increases the damage done . shelling out money for expenses and a mortgage while spending down and having having a rental income interruption can be very damaging .
but i will leave it at that , as i said i do not discuss anything with you anymore , yeah we know you never went without a tenant , we get it ,
Last edited by mathjak107; 07-08-2016 at 01:28 AM..
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