I got stuck being an unintentional landlord with the last housing crash and won't do it again. If I one day have FU money to buy buildings and mgmt companies, fine. But no way otherwise. My tenant after 6 years of never raising her rent turned into the equivalent of a psycho ex when I decided to sell the place. multi-page text messages and all...
Bought a 3-Family in Kingston NY (hot rental market) a couple of years ago for 225g, no mortgage. Minor maintenance here and there. Grossing about 33k a year. Tenants will make you or break you. So far, So good.
......buy now but buy right. Nothing comes easy, nothing is instant. It's tough jumping into real estate. I'm 52. I remember as a teen, watching the late night infomercials with carlton sheets and others, telling you how you too can make tons of cash in real estate. it's not that easy in most cases. some people get lucky.. stumble across a deal, inherit something, win lottery. I got a degree in real estate from USF, worked as an appraiser for 5 years under a guy, opened my own shop and had appraisers work for me for the next 10 years. flipped little houses and made $4-5 k per deal without ever getting my own hands dirty, but it was still tough. you were scowering the MLS listings every morning, hoping to get a look at a good deal before the other "vultures" that were flipping got there, and hope the realtor wasn't taking "side money" to push one investors deal through before yours. (it happens). ......things are different today. everyone want's to invest, prices are high in good area. I kind of got lucky, but took huge risks. Borrowed $60k against my own home to buy a 10 unit building in an up and coming part of historic Tampa 20 years ago. Quickly used income from that to buy a couple more like it, taking on huge debt. All built in 1926 (as most of the old multi family was in this area) was pretty rough, but could see the appreciation in this area. I thought i had a hole in my head back then paying $35k per unit. Now they are going for way more. 100k to 125K . sold one 8 unit building for $200k per door, but spent ton renovating. I really don't even see how anyone makes money as rents have doubled, but not quadrupled.. but today, stuff is paid off, have a guy works for me full time to do maintinence. .....bottom line.. take a risk, but 1 or 2 rentals are more of a pain than will be worth. go big. Big enough to have ONE full time guy that does all the work on the places, not you. Get too big? have to higher another $50k a year guy? i almost went there and sold off stuff to cut back
There's no such thing as "Passive Income" it all takes work in some form or another. Nothing is a "set it and forget it" check coming in every month. It's going to consume some measure of your time one way or another.
I retired relatively young by investing in residential rental property. In today's world, it would not be possible to do what I did. What did I do, you ask? I rented out houses with a reasonable expectation of getting paid and having a positive cash flow. That business model is no longer valid. Also, if you do get into residential rentals, don't get too passive. There are tax advantages if you can classify it as a non-passive activity.
Man, forget pressures and cold-tearing. Next time I see you at the track I'm going to be asking about ROI's and cap rates.
Are they playing house in your house? If so I would drop the hammer.... Oh being a tyrant I would do it anyway, the best motivation for improving the 36K is not to live in a 400K house free (thus you live more like 60-70K in lifestyle if not more). Oh the exception is if she is young and not playing house then you are hopefully giving her a leg up. Of course I will be hated for this comment but when everyone thinks you are good to BBQ you are used to that
I just got my 5 year tenants out last month . Doing remodeling project and going to list for sale . As others have said , getting to be too much work for the return . My passive income will now consist of two Union pensions and Social Security.. doesn’t get anymore hands off than that !
Either give it to her now, or after you are dead. What's the difference? Besides her being able to thank you now.
Good point...also regarding taxes...maybe think about a trust or something for it and let her pay the trust...you take the money as the beneficaiary but she inherits, if thats possible. You're never to young to plan that...a sales rep of mine was at a company yesterday...healthy guy mid/late thirties...passes out and dies that afternoon at hospital. Better to plan now than let uncle sam get it all...
Serious side question though. How many of you guys worry about how our kids are going to afford a home? Around here, homes that 5yrs ago were $270k are now $400+. My kids (both 11) already say they can't imagine living in a condo/complex/townhouse as we live now on a 50acre farm property.
Same as every other generation, you go where you can afford to live. Seems like they need to imagine being able to pay the bills
Collect weird instructions on the internet make a pdf from it sell it online that’s the dream / scam / plan for real passive income everything else is work
Yup, house the wife bought for $300K in 2006 that is maybe worth $240K now. Here's an email from our last tenants.......
Home's/property values see-saw with interest rates. Rates Low means prices are high Rates high means prices are low That's part of the struggle that generation will have to overcome in their journey through life. I'm sure our parents may have had similar concerns about us as well. I know my first car was just under $16,000 out the door. My Mom said my Dad was so very concerned I'd be able to make the $255/month payments. That's laughable now.
