A couple things:
First, several of my friends are into rentals, and one thing they have learned over the years is that, at least in a smaller city (100k people), the lower end family properties are the most reliable for a steady flow. The tenants are poorer and can't afford to hop around as much or be out on the street, so they are more reliably paying rent. Middle income tenants tend to think more highly of themselves, so they complain more and have a higher tendency to miss payments, mostly because they don't think anyone would have the nerve to kick them out, but even if they do get the boot, they can afford to get another place easily, so it isn't a big deal. I can imagine in larger cities with more widespread poverty and crime that lower end tenants would be more difficult. Plus I imagine in the more central states that people are more respectful of what they have than in the coastal states.
Second, I read a great article about investing about a year ago. It stated that when it boils down, there are three ways to put your money to work. The first is investing in stocks and bonds in some form. This is the most volatile and usually the most lucrative. But you have to stay your course during the good and bad times, and for some that is difficult. If you have a nest egg invested and the stock market has a downturn, you have to be able to weather it or you lose your money. If you are living off the capital gains and dividends, you don't have a reliable source of income in the short term. The second is real estate, which is primarily income properties. Less risk than the stock market and more reliable income, but the best way to get a return is to manage it yourself, which is where the real work is. Not only can it be a major undertaking for even a few small properties, the pitfalls mentioned above are there in spades. And of course, it isn't without risk. Finally, the third and final way to make money work for you is to start a business. Obviously business isn't for everyone, so while this can be profitable, the level of risk is directly associated with your ability to run a business.
When it comes down to it, there really isn't any other (legal) way to make money with money. There are safer ways to invest in stocks and bonds, but the safer it is, the lower the return. It is difficult these days to get a CD to even cover inflation let alone make money. If you have any penchant for real estate, that is probably the best way you can go, and you don't even have to have a lot of cash. You can borrow a lot in a stable market, and once you get the ball rolling, you can leverage your equity for more loans and buy more property. As long as you can weather another 2008 crash, you will probably never completely lose your investment.
I always wanted to get into income properties, but every time I have a good opportunity I end up falling back on my family business which is steady and stable and has always had a good return. My hat is off to anyone who has jumped in, even if just to test the waters. I will likely get into something in the next few years, but then I have been saying that for two decades, lol.
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Topic: Anybody here have rental properties? (Read 2662 times)
