How many have rental real estate?

[calmloki]

I know a certain number here have rentals, but wonder at the percentage. I feel kind of like an outlier, as we got started buying ratty old places that we thought were cool and then had to make them pay for themselves, which resulted in a collection of rentals that ended up being our livelihood sans other meaningful employ for me. We now have a manager for most of the time, but the rentals continue to be our main repository of wealth and a primary funder of our annual income.

 

[brewer12345]

Um, no option in the poll for "never owned a rental?"

 

[Amethyst]

I'd be interested in how many people own/have owned rentals and, like Loki himself, made or are making a profit.

Amethyst

 

[W2R]

Um, no option in the poll for "never owned a rental?"

How about "Never owned a rental and never will, if I have anything to say about it!" ?

Taking care of my own house is more than enough work of that type, for me.

 

[Meadbh]

In 2007 and 2008 I purchased three rental properties, my goals being to reduce portfolio risk by investing in noncorrelated assets, and to build a stable income stream for the long term. My properties are professionally managed. While this reduces profits it makes my life easier. I have paid off one mortgage and expect to pay off the next within 5 years. When all the mortgages have been paid off, the resulting income stream will cover about 30% of my lifestyle expenses. Cash flow has been positive since the first mortgage was paid off. During the 2008-09 market crash, income from my rental properties was the only sector that stayed stable. That reassurance helped me to get a good night's sleep.

 

[GregfromTexas]

Rentals work pretty good for me and I have a low tolerance for hassle.

I get a manager. Good managers have handymen who do more for less and only charge you cost. Realtors or managers (usually the same) will charge you 75% of one month to find a replacement tenant when needed and negotiate a lease - my instructions are to lean toward a more aggressive (lower) rate for a good quality (credit score) tenant IF we can get a 2 year lease. Anything needs doing they do it, charge me. The tenants never meet me. I pay him 8% of the rent for this service which makes it almost completely hassle free.

I modeled a vacant month a year, a reasonable maintenance budget (I told him I'm willing to pay to keep the place in very good condition), property taxes, insurance and management fees and I net 3% of the value of the house per year (no mortgage) and things have been going according to plan.

If you consider real estate and rental prices generally track inflation, that can be viewed as a 3% real return as opposed to 3% nominal which makes a huge difference. Also in practice so far after 5 years or so I am seeing vacancy more like 1 month every 2 or 3 years.

 

[38Chevy454]

Past owner of 2 rental properties. I self-managed the first when younger approx 20 years ago, then prop mgr for second since I was out of the area. First was a 4-plex unit, and a lot of hassles being an old converted house in the older lower income downtown area. Good positive cashflow and nice tax help. Also takes time and effort to keep up on repairs and turnover. Second was single family home and it was less turnover and stable, just some repairs. I could have self-managed but was out of area (~1100 miles). This was negative cash flow.

All I can say is glad to be out of the rental business, invest now in normal brokerage and hassle free accounts.

 

[VaCollector]

I voted "have owned", "currently owned" and "self manage".

Have owned residential rentals that were self managed and a real PITA

I did not make a dime on them other than thru appreciation and was extremely happy when I got out of them….

I currently own a small office condo that is self managed and I have had absolutely no problems with…and could actually rent more space if I had it!

 

[Senator]

I have 24 rentals, and manage another one for a friend. And I work full time (for just a while longer). They are 5-fourplexes, and 2-duplexes. Both duplexes are paid off, and 2-fourplexes are paid off. The fourplexes are in a Class 'A' area of town. Duplexes are Class C+.

I do my own management and maintenance. It keeps me busy, but I make ~150% of my full time job salary in them. I hope to quit my full time job in 2016 and get back to half days (12 hours).

They will be my only income for a few years, and I will let my $1M portfolio grow until I am ~65. Then start a small pension, use investment funds, probably look at selling some of the rentals.

 

[NYEXPAT]

We have a vacation rental in a year round tourist area that provides my wife an income about 3x her job income. Years ago, a rental would pay itself off in 3-5 years, but as prices have risen 300% since 2007, it is no longer possible. For me, the best part (besides no hassles) is meeting new people from around the world every week. When the Ukraine crisis first broke out I had people (over about 3 weeks) from both the Ukraine and Russia and got a very good perspective on the crisis that later made money for me in the markets.

 

[Amethyst]

Rental property gave me PTSD. Seriously, I still have nightmares that the rental townhouse and tenants are coming to get me.

Amethyst

 

[calmloki]

Um, no option in the poll for "never owned a rental?"

You know brew, that right there would have been a brilliant addition to the poll. Guess the poll as it stands will just garner the number in the landlord crowd rather than yielding a meaningful percentage of ER members. Making the poll multiple choice also makes for wonky numbers - not really a well thought out attempt.

 

[JoeWras]

I'm in the process of looking for new insurance (changing companies). During the application for umbrella coverage, I was asked probing questions about "other properties, including rentals" that I might have. (I don't have any.)

I don't know what this would do to my umbrella, but I'm just curious about the questioning.

So I ask you landlords: do you have an umbrella? If so, did it go up as a landlord? Or do you somehow make this a business or LLC side project?

Aside from inherited PSTD (after seeing what my grandmother went through), these legal entanglements are one reason I've stayed away.

 

[MBAustin]

For all of you rental property owners - do your kids a favor and give them a choice as to whether or not they will be passed down. My parents owned some rental property in our small hometown (the house my mother grew up in, the house we grew up in, and an assortment of small houses and duplexes that my mother's father had bought over the years). Real estate values and rents there are extremely low (I think most of the houses rented for <$100/month about 10 years ago). My sister managed the properties and about 8 years ago we both agreed they were more hassle than they were worth so she started selling them. We ended up donating a couple of them and still have one we can't seem to get rid of. A royal pain in the you-know-where. Wish Dad had sold them years ago.

 

[jetpack]

I have 4 units. Pain on the butt. Currently rehabbing a unit that had a bad tenant. Trying to sell one property, and get out of it.


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[foxfirev5]

I'll stick to my REIT index fund. Lower returns but I'm spending my Friday afternoon enjoying a cold one at the dock, not worrying about the month end rental payments.

 

[FIREd]

I am getting out of the landlording business. My experience as a landlord has not been bad at all - so far. But there are several factors that make me revisit my decision to own rental properties. First, we are now long distance landlords due to moving for DW's job in 2012. We have a local property manager, but I think that communication is lacking and I often feel out of the loop. Second, the net yield on investment is lower than expected (around 3%). I can get a comparable yield on more liquid and maintenance-free investments.

 

[sengsational]

I had two concurrently in two different places (and I lived in a third place). Self managed (but rented to my sister in one case).

I DANCED (and jingled my very light key ring) when I got rid of both of them!

One was a previous residence (didn't sell because a down market), and the other one was to keep my auntie from ending up on the street after her husband died. Although I doubled my money on both places, I was super happy to be free of them.

 

[eta2020]

Um, no option in the poll for "never owned a rental?"

That is probably most of us would use it.

I am scared of Lead Paint poisoning, eviction, lawsuits, tenant rights. But if one has stomach for it there are money in it.

 

[clifp]

I got a new property manager this month for my (now down to two) rental properties.
I think the 3rd time is a charm..

However if you had posted this poll last month. I would have wanted this choice.
"Currently own rental properties, but can wait to sell the suckers and take my profits".

 

[Downtown]

We own 4 units spread across 2 duplexes. Cash flow neutral now, but all recently purchased units in a desirable part of town, so it should improve over time. I'm self-managing, but could transition to a property manager over the years as cash flow increases. One unit is currently vacant. Hopefully I'll get that corrected sooner rather than later. I cherish the monthly rent checks and try not to take them for granted. Rationale for RE investment was to diversify some funds out of stock market and gradually create another source of retirement cash flow. Managing has it's share of hassles (I spent all day today dealing with contractors, destroying a wasp's nest, changing filters, etc.), but I'm trying to take the long-term perspective. So far I'm optimistic that things will turn out positive in the end, both for cash flow and appreciation. Location, location, location!


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[InTheSticks]

We have 33 units that we have had for about 25 years. They are in two complexes that happen to be right next to each other. One on-site manager handles both. We plan on keeping about 5 more years then sell with owner finance.

 

[chilkoot]

Am currently 1/3 owner in a single rental home (along with 2 siblings) which we inherited from my mom. We use a manager, but I served as manager for awhile when my mom owned it. My dad had several rentals but gradually sold them off except for this one. He was a much better landlord than I ever was or will be. If it was up to me I would be done with it, but my sister likes the income (it's long since paid off). Any time I hear someone mention the prospect of owning rental property for the "easy income" I steer them toward an old movie "Pacific Heights".

 

[outdoorgirl02]

We have a condo in a tourist area that we self manage. It really hasn't been bad at all as a short term vacation rental and it does make a bit of money plus we get to use it whenever we want as long as we block off the dates on the reservation calendar. We are looking at buying another one in the next year or so.

 

[calmloki]

..... Any time I hear someone mention the prospect of owning rental property for the "easy income" I steer them toward an old movie "Pacific Heights".

You are a very mean person. That movie made my tummy hurt. for years.