All done and living off rental income

[SAtoUS]

Hi,

I'm all done working as a consultant and done looking for new clients too. At age 47, I'm now completely living off our commercial property income. The properties brings in around $160k/ year. This covers all our living expensive, health insurance and bills. Still have a note outstanding on one property, but that gets paid too by our tenants. All leases has a 4% increase too.

Yesterday was the first time EVER, when the lady at the Dr's office ask me my profession, 'Oo, I'm retired' I said... my wife and I just looked at each other and smiled.

It was an odd feeling saying that, but also a great feeling. I feel odd sharing this w any of our friends and relatives, that's why I'm posting it here

I enjoy reading the site tremendously. Happy early retirement everyone!!

[travelover]

Congratulations. Now what will you do all day?

[SAtoUS]

Thank you!

Well let's see what I/ we are planning on doing... W are planning on living one month a year somewhere else in the world.

I'm the 'property manager' for now, which I like doing and that keeps me busy. It takes about 3 hours a month of work. One can argue, that if that's the case, I'm not really 100% fire... but in my eyes, I am.

We are also looking at buying a place on the beach. We also both like doing volunteer work.

It's not going to be hard for us, to kill our days

[Senator]

Quote:

Originally Posted by SAtoUS I'm now completely living off our commercial property income. The properties brings in around $160k/ year. This covers all our living expensive, health insurance and bills. Still have a note outstanding on one property, but that gets paid too by our tenants. All leases has a 4% increase too. Yesterday was the first time EVER, when the lady at the Dr's office ask me my profession, 'Oo, I'm retired' I said... my wife and I just looked at each other and smiled. It was an odd feeling saying that, but also a great feeling. I feel odd sharing this w any of our friends and relatives, that's why I'm posting it here I enjoy reading the site tremendously. Happy early retirement everyone!!

Great job! I will make the transition soon, living off my rental income as well. I have an almost identical net income from my 25 rentals too, and room to grow a bit more.

I plan on saying I an an Entrepreneur, or investor, or retired. Or even fighter pilot, depending on the context...

[SAtoUS]

Quote:

Originally Posted by Senator Great job! I will make the transition soon, living off my rental income as well. I have an almost identical net income from my 25 rentals too, and room to grow a bit more. I plan on saying I an an Entrepreneur, or investor, or retired. Or even fighter pilot, depending on the context...

Fighter pilot, good one!!

[Another Reader]

When I retired, I put that down as my occupation on a couple of forms and applications. Within 90 days, the type of mail I got changed dramatically. All the good credit card offers and upscale advertising disappeared and I got offers for junk products, including secured credit cards.

I mentioned this to the mortgage broker when I talked to him about refinancing my house. He said NEVER put down you are retired on any form or application. From a lender's perspective, that's similar to "unemployed." Put down you are a real estate investor instead.

I started doing that, but it took almost a year for the mail to change. I still get the occasional bad offer, but my shredder is less taxed these days.

ETA: The worst reaction was from AMEX when I applied for a Costco credit card. I got a basic card with a $2,000 limit. When I asked for an increase a year later and gave them the income information, I got a letter requesting my tax returns to increase the limit. Since I have six figures of credit available through Chase, B of A, and a couple of others, that letter went unanswered.

[MrLoco]

WOw! Good for you! Assume the 160k/ year is net after taxes, insurance , repairs?

Curious to know what % the property makes up of your overall asset allocation?

Also considered dabbling in rentals but could never pull the trigger.

[Fedup]

Good thing I read this thread. I won't put myself as retired in any place. I shall replace it with independently wealthy as occupation. I want better credit cards.


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[dvalley]

@MrLoco- same here because of all the negativity from people who've never owned [insert idea] them. I looked into fast food franchises after talking to someone who's a multi millionaire and has done nothing but owned 10 franchise restaurants. The Internet said 'no you'll lose your shirt' so I crawled back under my rock lol Then I asked about rental properties, the Internet said 'you're out of your friggn mind' and I crawled back under my rock again.

One day I'll do something that I want to do no matter what the Internet has to say...

[H2ODude]

Quote:

Originally Posted by dvalley @MrLoco- same here because of all the negativity from people who've never owned [insert idea] them. I looked into fast food franchises after talking to someone who's a multi millionaire and has done nothing but owned 10 franchise restaurants. The Internet said 'no you'll lose your shirt' so I crawled back under my rock lol Then I asked about rental properties, the Internet said 'you're out of your friggn mind' and I crawled back under my rock again. One day I'll do something that I want to do no matter what the Internet has to say...

One thing about having a bunch of franchises....Good friends son had a bunch of a well known chain, no problem making the note then some. Things were looking very good...until the chain informed him (which was in the agreements) he had to upgrade all of the outlets. He could not afford it and had to sell the business at a loss that wiped out his 401k (multi million0. Lesson: read and know the fine print

[SAtoUS]

@MrLoco.... My 4 buildings is about 50% of my overall assets. I'm not touching any of our IRA's... Will one day when I will be forced to, I know they MAKE you withdraw from them at some point.

I'm glad you guys are pointing out the 'retired' thing.

From now on, I'm like 'Senator' a fighter pilot!!

[ExFlyBoy5]

I have been putting "consultant" on any forms that ask for an occupation. It keeps people from asking the questions that you would expect if you are 41 years old and put down "retired"...and most of those questions are too damn annoying. I have discovered that "consultant" sounds boring enough that it's VERY RARE anyone asks for further details.

To the OP...congrats! I have no doubt you will fill your time and you will soon discover that you have more things to do or want to do than you have time!

[VFK57]

Congratulation. I think you can call yourself the Commercial Properties Manager if you do it yourself.

[Another Reader]

Quote:

Originally Posted by Fedup Good thing I read this thread. I won't put myself as retired in any place. I shall replace it with independently wealthy as occupation. I want better credit cards. Sent from my iPad using Early Retirement Forum

It's not the credit cards specifically that matter. The mail I received was a symptom of the greater problem. It's that "retired" is viewed negatively by financial institutions. The income of "retired" applicants is evaluated differently and different products are sold to them.

Mortgage underwriters look at you differently. The mortgage broker said my application would get a much more detailed review with a much greater chance of the loan being turned down because the lending standards consider the source of income.

[orangepanda]

I am currently in the process of deciding whether my next investment will be another SFH or to try and go commercial. Any pros or cons you have for either side?

[Tyrobi]

Well done! Congrats!

[SAtoUS]

Quote:

Originally Posted by orangepanda I am currently in the process of deciding whether my next investment will be another SFH or to try and go commercial. Any pros or cons you have for either side?

I will go commercial if I'm u. Why?

- Easier to manage (ROI is greater)
- Easier to evict tenants if need be



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[check6]

Quote:

Originally Posted by Senator Great job! I plan on saying I an an Entrepreneur, or investor, or retired. Or even fighter pilot, depending on the context...

I am here to tell you it does not get you anywhere.

[Senator]

Quote:

Originally Posted by orangepanda I am currently in the process of deciding whether my next investment will be another SFH or to try and go commercial. Any pros or cons you have for either side?

It is near impossible to make money on a SFH. A 4-plex gives you the advantage of a 30-year fix mortgage.

A unit with a larger number of doors gives you a lower cost per door. There are a lot of options here. Buying on your own, buying with a syndicate, REIT, etc.

A true commercial property is easier, once you have tenants. If you lose tenants, it may take several months to get another one if you are in the retail arena.

If you own a trailer park, self-storage, cold storage, etc., it's easier too, but I have never owned this type of venture.

Quote:

Originally Posted by dvalley @MrLoco- same here because of all the negativity from people who've never owned [insert idea] them. I looked into fast food franchises after talking to someone who's a multi millionaire and has done nothing but owned 10 franchise restaurants. The Internet said 'no you'll lose your shirt' so I crawled back under my rock lol Then I asked about rental properties, the Internet said 'you're out of your friggn mind' and I crawled back under my rock again. One day I'll do something that I want to do no matter what the Internet has to say...

I looked a several franchises and businesses myself. A vending machine route, laundromat, tanning salon, a hair cutting place and a check cashing place. A laundromat and a check cashing place were the most promising. The vending is great too, but I decided against it.

[Senator]

Quote:

Originally Posted by check6 Originally Posted by Senator View Post Great job! I plan on saying I an an Entrepreneur, or investor, or retired. Or even fighter pilot, depending on the context... I am here to tell you it does not get you anywhere.

Maybe I have to be a Doctor, or like Jethro Bodine, and be an "international Playboy".