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I've been reading a lot about real estate investing and spending a good amount of time over at biggerpockets. It seems realistic that if you're a handy person and can recognize a good deal real estate can be a great way to get to retirement faster and always have rents coming in for as long as you own the property.
Figure you want to retire with $75k a year.
That would take 17-18 properties cash flowing an average of $350 a month after all expenses (property manager, vacancies, planned damage and repairs, etc). If you need $20,000 cash to purchase each property that's a total investment of $340,000. Or $34,000 a year for 10 years. And the cashflow from each property will have helped you buy the next. By the time you get to property 10 each year of purchases is funded by the cashflow of the property you already own.
If I put $34,000 a year in stocks for 10 year's even at a 10% return that's $680,000.. figuring a 4% withdraw that only gives me $27,000.
Anyone retire early with real estate? How many properties do you own? Was it easier/harder than you thought? Would love some insight.
Managing real estate is tricky, and time consuming.
If you are going to retire, I would STRONGLY suggest selling everything (with the exception of a primary residence in an area you love), and just life off of your savings.
If you are are more into travelling, then I would suggest selling everything, even the primary residence. Rent in a good area. Enjoy not having to worry about upkeep.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Quote:
Originally Posted by Mr. Joey A
Managing real estate is tricky, and time consuming.(?) ...
If you are are more into travelling, then I would suggest selling everything, even the primary residence. Rent in a good area. Enjoy not having to worry about upkeep.
and then there is lowly ole me... only 40 yrs a landlord. (commercial and residential)
I spent ALL of 2016 traveling OUTSIDE of USA (due to it being an election yr and me having no interest in THAT). My 12+ USA rental props were FINE without me (And they are RURAL / very maint intensive)
So far in 2017, I have taken only 14 USA trips and 4 international trips.
No severe crisis yet, but Amazon Prime is killing my $20,000 driveways on steep view properties. By winter I may be PAVING them I HATE paving driveways, VERY non- ecological, but so is delivering $0.28 worth of Baking Soda out in the country via a Fed Ex Truck (what my tenant last purchased).
I wish I didn't have the hassle of a primary residence, but.... it is within a National Scenic Area, so there will never be another... It will be a nice place to lay in my deathbed and watch the view / weather (If the tax assessor does no get it first (taxes $43 / day... up from $3 / day when I built it). I keep a tenant / boarder / caretaker to feed the dog and water the plants while I am gone.
Do what fits, RE comes in all sizes and colors. So do stocks!
There are methods to survive as a 'retiree' in each segment. (and a price to pay for that!)
My 94 yr old friend appreciates his $8,000/ month check he gets from ONE of many commercial rentals. This property is in Atlanta, 3500 miles away. He has never been to Atlanta, never physically seen this property which he has solely owned for 14 yrs. As long as the $8,000 checks keep coming he seems to be fine with that arrangement. (he has 7 yr leases and his checks are paid 3 months in advance by the lessor (company from Japan). So far so good. Property value has gone up 120% in 14 yrs, but no issue, as tenant is triple net (tenant pays taxes, upkeep & insurance)
Last edited by StealthRabbit; 05-20-2017 at 05:22 PM..
one thing my 30 years in dealing with real estate taught me is when it comes to real estate nothing is ever a problem , until it is a problem .
then it can be one big expensive costly hell .
for decades we had no problems and i thought real estate was really passive .
a tenants divorce that ended up being my problem taught me otherwise and was actually instrumental in why we did not want anything to do with land lording in retirement . it was just not a problem YET
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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yes, I have had a few issues, but none broke me or the bank (yet),
Stuff happens. but my RE (and employment) is SO easy after 32 yrs of tense eldercare / closing 9 bushiness of my parents, and growing up at Dairy Farm Boarding school.
nothing is perfect.
Do what fits you, and you can sleep at night.
I diversify... 30% in RE and 30% in active growth equities and 30% in passive growth / income equities.
Not perfect, but it spins off the $100 / month I need to eat. (But not the USA HC premiums I would need if I chose to be insured under the A(?)CA) Actual it does, but I elect NOT to subsidize that failed USA industry / Gov boondoggle.
Managing real estate is tricky, and time consuming.
If you are going to retire, I would STRONGLY suggest selling everything (with the exception of a primary residence in an area you love), and just life off of your savings.
If you are are more into travelling, then I would suggest selling everything, even the primary residence. Rent in a good area. Enjoy not having to worry about upkeep.
I have been retired 16 years, we are getting back into the landlord business this year. By year end we will have 14 units on one property.
one thing my 30 years in dealing with real estate taught me is when it comes to real estate nothing is ever a problem , until it is a problem .
then it can be one big expensive costly hell .
for decades we had no problems and i thought real estate was really passive .
a tenants divorce that ended up being my problem taught me otherwise and was actually instrumental in why we did not want anything to do with land lording in retirement . it was just not a problem YET
I own eight rental properties and I am an out of state owner. Using property management can be a horrible experience. I've gone through 6 over the past fifteen years.
If I wasn't retuning to handle the homes myself in 2019 I would sell.
Way too much of a headache not being able to personally look after the homes. So much can go wrong when others do the work. It's not their property and they aren't the ones footing the bills.
we never do rental homes . i have never invested in private homes . only co-ops where most issues are not our individual concerns like maintenance issues .
we basically only deal with tenant issues not building or structural and only until we can sell the apartments. income is not the game . selling the apartments off asap is our game ..
because we had so many apartments we let douglas elliman handle the running of the business , now that we only have 2 left we still retain them and basically the apartments are transparent to us daily and we don't even know we still have them .
nyc has not allowed rent increases in two years so we are at break even and until we can sell them they represent little to us even though each one left ,which are studio's can bring in over a million if sold .
until we can sell them i don't even carry them on our yearly net worth sheet since at this point the only ones who may benefit are our kids as they outlive the tenants .
Last edited by mathjak107; 05-21-2017 at 03:47 AM..
It really just depends on what you are trying to accomplish.
Getting rich was never an objective for me. Early retirement was. I don't spend a lot. I like the simple life. And, that is where I have an advantage over a miser that never has enough money. These people just don't get it, and never will in my opinion.
money may not buy happiness but it sure can buy lots of different choices in life .
We get it we get it!!
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(And they are RURAL / very maint intensive)
I HATE paving driveways, VERY non- ecological, but so is delivering $0.28 worth of Baking Soda out in the country via a Fed Ex Truck (what my tenant last purchased). 
