Buy shares in a large multi-market (national) rental company instead.

Never get called.

Profit.

Maybe you should invest in this new thing to beat all things.

It's call "Time Share"... and I mean it is the grooviest way to swing, vacation and make some mad jack in the end.

All the cool cats are doing it!

Operators are standing by! CALL NOW!!!*


*
(unless, you haven't met your Columbia House Record Club Subscription, baby!)

quote:

Originally posted by cooger:
I’m leaning more towards going the mutual funds route.

Yep. Compared to landlording, ETFs/Mutual Funds are liquid, diversified, zero effort and headache. Taxes and accounting are simple. No tenants-rights issues, no maintenance, no neighbors, no property taxes.....

Buy a nice house and get nice renters, once I learned that it has been great, started out with cheaper homes and cheap renters, always a pain. Now it's pretty easy. One renter is a lady in her 70's been renting for 6 years, takes wonderful care of the house, spends the winters in AZ from November to March. Check is mailed from the bank to me on the 1st of every month, she will probably be there until she passes.

quote:

Originally posted by abnmacv:
Best advice I got on a rental was "Don't own one, own 10 or none."

I have a good friend who began acquiring rental properties in the 90s. His advice was the same. Don't plan to own one. Own at least several.

His other advice:

-Be immune to sob stories at rent time, or hire a professional management company.

-Have the time, patience and the ability to be your own repair/handyman, or have a great network of repair/service people, or hire a professional management company.

-Have a solution for the 2am call about a repair, or hire a professional management company.

I have not asked him lately about his rental properties, but I wonder if he still thinks it is a good idea, given the downward trend in human behavior.

The other route, as Calif Phil mentioned above, is to possibly invest in only 1 or 2 upper-middle class homes. That does seem to work here, especially with an Air Force Base nearby loaded with upper level officers. They typically stay here for 1-3 years and they take care of the property.

.

Or, you could invest in Realty Income, Symbol "O". Investment in real estate (a REIT) without the management issues. Been pulling back recently to a buy range. About a 6 percent yield, pays monthly. Just my 2 cents.

I missed my chance but I understand owning rental properties is one of the ways most wealthy people made their wealth. They usually rent out their first house after buying a second house.

Not knowing your area
Around here the bank is only going to loan 75% on non-owner occupied property.

The other 25% can’t be borrowed monies. So a $300k property is going to need $75k plus fix up money.
A great looking home can suck up 15-20k in the blink of an eye.

My wife and I have two rental houses in a town about forty-five minutes from where we live. I serve as property manager. I go to both houses on the first Sunday of every month and collect rent payments in cash. I fix what I can, when/where necessary, and we have relationships with specialists for things I am incapable of doing. My wife is a very smart lady, and a realtor; she has very comprehensive rental agreements.

We have been very fortunate with our tenants. We had a bumpy start with the first tenant in our first rental, but it was ultimately resolved with little-more penalty than a bit of stress for a few weeks. We ended up with a good young couple in that first house, and then ended up with his sister and her husband in the second house.

The only annoying thing we've experienced, other than inherent maintenance issues, is tenant expectations. Just weird "human factor" stuff. The couple in the first house were unnerved by the fact they saw a spider here and there. I had to talk with them a few times, and inform them that I encounter bugs in my house relatively often. I kill them or ignore them, and move on. A factor in the winter time in the second house is the HVAC. It does need some improvements, to maximize efficiency, but it works. But on the fluke coldest nights of the year, here in GA, it does struggle a bit. It'll keep it in the mid/upper 60s, but they want it in the mid 70s. It's low on our to-do list, but we'll get it done. I tell them exactly that.

We have an overall good relationship with the tenants. The houses do need work from time to time, and it can be a very annoying surprise, if it conflicts with your other obligations, which it very nearly always does.

I suppose it boils down to nothing more complicated than you're responsible for everything you're responsible for where you live x2, or x3, etc.

One clever thing my wife has in the lease is we change the HVAC filters for them every four months. That conveniently gets us in the houses, whether they want us in there or not. It's not a big factor, considering the good tenants we have, but it'd be useful if the relationship wasn't so good.

If you are trying to pick between mutual funds and rental real estate pick mutual funds, SO MUCH EASIER!

That being said I'm in favor of diversification and have both, been a landlord for 16 years. I rented out the first house I bought when I moved out of state. It's a decent house in a desireable neighborhood. I paid a property manager 10% for many years as I was 270 miles away. It did not cash flow for several years, but the value has tripled in 16 years and I am glad I held onto it. I have been fortunate to have had great tenants and it has only vacant for 2 weeks in the last 16 years.

House 2 was a "house hack" I live in one side of the duplex and rent out the other side. That one has worked out as well.

I'm up to 10 now and it's a part time job as I'm doing the management and 75% of the repairs/re-models myself. I technically lost $45k last year as my new ones needed fixing up and I put all funds back into needed remodels. Last year was 2 new floors, 2 new kitchens, replaced 4 hot water heaters, 2 HVAC units, and 1 roof. I'm planning 2 to 4 remodels again this year and then the business should be really good.

Good Property Managers are worth the money, but I find they still need to be managed. If they have 100 units they won't always care about them the way you do.

AirBnB/STR (short term rentals) and Long Term Rentals are completely different worlds and there are a bunch of people who saw STR on social media, thought it would be easy and are losing $ right now. Both STR and LTR can work. I've only had to do 1 eviction so far, and I have not had a unit destroyed. Tenants can be hard on property, and I expect to make repairs. I also let them know very emphatically to let me know immediately about water leaks from plumbing or the roof, nothing will damage a property faster than water going where it shouldn't.

quote:

also let them know very emphatically to let me know immediately about water leaks from plumbing or the roof, nothing will damage a property faster than water going where it shouldn't.

Absolutely! My current property manager was slow in responding to an in-wall leak, drove the TENANT nuts. They did quickly take care of a roof leak.

Anybody got a really good property manager in the Phoenix/Mesa area? Our old family-owned company was bought out by Pure Properties. They’ve been a pain in the ass—never get a call from the same person twice.