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Old 09-11-2015, 09:16 AM   #1
Confused about dryer sheets
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Just joined today!!

Hello Everyone,

My wife/I are both 51, plan to retire 4/1/18 after 30yrs as an hourly employee working in mfg. We have been married a couple years. Rental Property is going to be a pretty significant portion of our retirement.

I found this site about a week ago and have followed a little and decided to join. One of the thing(s) I noticed was that I didn't see anything on "Rental Property" as part of your portfolio. Just curious.

I see the FIREcalc seems to be a very common thing referred to here and we haven't looked at it yet.

Looking forward to learning and sharing with everyone.

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Old 09-11-2015, 09:27 AM   #2
Recycles dryer sheets
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welcome - I just joined a couple of weeks ago and have been pouring over old threads pretty much since then. There is a wealth of info on here - I can't help you with the rental question but I will subscribe to this thread in hopes someone else will as I am curious as well.

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Old 09-11-2015, 09:31 AM   #3
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Welcome to both of you! There are quite a few members who own rental property (myself included) and if you use that term in the search engine you will find relevant threads.
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Old 09-11-2015, 10:19 AM   #4
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Hello and Welcome!

Do you plan on managing your properties yourself in retirement? I feel I am overweight in property with just owning my house. I would like to diversify first before I would buy a rental :-). When you say significant, do you mean more than 50%?

Congrats on your ER date!
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Old 09-11-2015, 10:32 AM   #5
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Hello and welcome to the forum!
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Old 09-11-2015, 12:02 PM   #6
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Old 09-11-2015, 12:38 PM   #7
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Hello and welcome.

In firecalc you can enter rents as pension income - after adjusting for expenses/costs/vacancies/etc... That's the way I handle my rental property.

There are several folks here who are heavily into rental income as part of their portfolio.
Retired June 2014. No longer an enginerd - now I'm just a nerd.
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Thanks Everyone
Old 09-11-2015, 12:47 PM   #8
Confused about dryer sheets
Join Date: Sep 2015
Location: Kokomo
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Thanks Everyone

Yes, at least for the next several years we plan to manage and do as much of the mtce as well...that will be our "job" in retirement. We also have a couple ppl that helps us as well. If we need more help we will supplement as necessary. I don't have the numbers in front of me but it will be a significant portion of our retirement. I work for a mega-corp.

We are fortunate that housing cost(s) vs Rent(s) are very good IMO. The potential downside long term is that we don't have much appreciation so if we would sell it would effect us. We have both been in the Rental business for a long time(25yrs) so its nothing new. I bought my first when I was 26.

We are very excited to move into ER phase of our life.
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Old 09-11-2015, 01:32 PM   #9
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I will be using rental property exclusively myself for a few years. I also do my own maintenance.

Start with the gross rents, and subtract the fixed known expenses. Then, subtract at least 5% for vacancy, 10% for maintenance and 10% for property management. Then, subtract the mortgage payment. I actually then only take ~60% of what is left to even account for more contingencies. Higher taxes, licenses, lower rents, bad tenants, etc. can all kill the profit.

Even if you manage the properties yourself, you should have a contingency for that, use the 10% number.

With Firecalc, use it like a pension. Fidelity's RIP accounts for it better.

In reality, much of the rental income is sheltered by depreciation, so you could actually have two categories, one like a Roth, one like a pension. In my case, I have ~$60K of depreciation, plus many business expenses that help with taxes.

There really is not a good method for rental property, in any planning tool. Even your asset allocation, if you have paid off properties, becomes a bit difficult. I figure my equity is like a bond allocation, so I have a higher percentage of equities in my investment account.
FIRE no later than 7/5/2016 at 56 (done), securing '16 401K match (done), getting '15 401K match (done), LTI Bonus (done), Perf bonus (done), maxing out 401K (done), picking up 1,000 hours to get another year of pension (done), July 1st benefits (vacation day, healthcare) (done), July 4th holiday. 0 days left. (done) OFFICIALLY RETIRED 7/5/2016!!
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Old 09-11-2015, 01:36 PM   #10
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Welcome to the board.
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Old 09-11-2015, 05:17 PM   #11
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Welcome to the Forum. Rental Property, divided stocks, CDs could add to your retirement income.

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