Poll: Rental as % of NW

[HillCountry]

A recent CNN article mentioned that 27% of those retiring before 62 have rental properties.

Just want to check the stat here. Please use equities in the rental for the poll.

I have about 15% of my NW in rental properties. All SFH in good areas that I could downsize into some day. I do have a piece of land, but I don't count that as rental.

 

[Meadbh]

<10%

I cannot vote in your poll because you have only specific options, none of which apply. Perhaps you could redesign you poll with ranges?

Don't forget to include an option for >100% for those who are highly leveraged!

 

[HillCountry]

Don't know how to update the poll. I should say upto %, instead of just a single %.

 

[brett]

Not only no rentals, but we sold our home and are not renting a condo. We will probably buy something in the next 12 months...no rush though.

 

[LandlordInvestor]

I would be curious to see a poll of what percent of your retirement spend level are you anticipating your rental portfolio will replace.? This is what I keep calculating....and running through my calculators. As our rental portfolio increases the $ portfolio amount that i need to save decreases.

 

[bssc]

The closest is a few publically traded REITs. And they are less than 2% of our portfolio.

 

[FIREd]

It's close to 1/3 of NW for me but it will decline somewhat in the future. Long term, my goal is to have ~1/4 of our income covered by rentals, ~1/4 by equity dividends, ~1/4 by interests on bonds and CDs, and ~1/4 by a yet TBD source (annuity, farm income, part-time work, SS later on, etc...).

 

[Meadbh]

Thanks for modifying the poll options. I have now voted. Long term, my goal is to have ~25% of living expenses covered by rental income.

 

[Gatordoc50]

About one half of my NW is in rental real estate. It provides about half of our living expenses.

 

[calmloki]

Numbers is hard. According to the property tax "True Cash value" about 52% of our assets are rental. According to a bit more realistic assessment of sale value maybe 48%? If we did sell the cash in pocket after taxes and expenses might be 30% of our total assets.

 

[Bestwifeever]

That's amazing to me that 27 percent of early retirees have rental property--I know only one person in real life who owns any.

 

[Meadbh]

That's amazing to me that 27 percent of early retirees have rental property--I know only one person in real life who owns any.

There might be others who may not wish to share that information with you. Real estate investors are sometimes assumed to be unscrupulous slum landlords even if the opposite is true.

 

[Bestwifeever]

There might be others who may not wish to share that information with you. Real estate investors are sometimes assumed to be unscrupulous slum landlords even if the opposite is true.

Oh, the one I know would definitely fit that description

 

[H2ODude]

Us - none. DS works in Africa and last year turned his house into rental using an agency, as it is in city ~1 hour away from us and I didn't want to hassle with it. So far no problems but it gives me the willies. I just do not like dealing with people in situations like this; that's one of the reasons I left the w*rkplace. Just don't like dealing with conflicts.

 

[MikeWillRetire]

We have two rental homes that we inherited a couple of years ago. Nice middle to upper middle class neighborhoods, about 25 years old. Due to their age, profit is eaten up by maintenance. But they have held their value.

 

[rodi]

We have a rental detached granny flat. It's well under 25% of our net worth and can't legally be subdivided and sold separate from our primary home. We're renting to a niece right now and charging under market rent. It will cover about 25% of our retirement income when we rent it to non-family. We didn't build it for investment.... We built it for elder care... And it served our family well. Rental income is bonus.

 

[Fishingmn]

I have 10 rental properties which is around 40% of NW (all smaller townhouses). They kick off about 55% of what we need to retire so they make up a significant future income stream. I call them my personal pension since I don't have one.

Without them my FIRE Calc numbers wouldn't work nearly as well. They conservatively kick out about 8-10% return each and rents should grow with inflation. They've also appreciated significantly in the past 2 years but I really don't count that since I intend to hold them long-term.

 

[nun]

I own a 2 family. I live upstairs and rent out the ground floor apartment which would be worth $250k if I sold it as a condo.

 

[Rambler]

Used to gave 4 rental properties. Hated the hassle. Sold 'em all. Long time ago, rentals were my intended route to FIRE income. I hated dealing with people who destroyed my homes, and I hated repairing them over and over again. Now I stick with stocks and bonds, with a little bit of REIT thrown in. Likely will never have rentals again.

R

 

[Fishingmn]

Used to gave 4 rental properties. Hated the hassle. Sold 'em all. Long time ago, rentals were my intended route to FIRE income. I hated dealing with people who destroyed my homes, and I hated repairing them over and over again. Now I stick with stocks and bonds, with a little bit of REIT thrown in. Likely will never have rentals again.

R

My outlook would probably be different regarding rentals if I had your experience.

In my 3+ years of being a landlord I've never had any bad tenants. One late payment which was paid within a few extra days with a late fee. The biggest hassle is when tenant moves out and finding someone new but that's manageable. I maybe get 1-2 calls a quarter about an issue that needs to be addressed but that's no big deal to me. I will hire a PM in a few years to take those calls and manage finding tenants.

 

[Badger]

I don't want the hassle from having to deal with renters whether they are responsible people or not. It's too much like having a job and working even if I have an agent handling it.

Cheers!

 

[donheff]

Used to gave 4 rental properties. Hated the hassle. Sold 'em all. Long time ago, rentals were my intended route to FIRE income. I hated dealing with people who destroyed my homes, and I hated repairing them over and over again. Now I stick with stocks and bonds, with a little bit of REIT thrown in. Likely will never have rentals again.

R

In my 3+ years of being a landlord I've never had any bad tenants. One late payment which was paid within a few extra days with a late fee. The biggest hassle is when tenant moves out and finding someone new but that's manageable. I maybe get 1-2 calls a quarter about an issue that needs to be addressed but that's no big deal to me. I will hire a PM in a few years to take those calls and manage finding tenants.

So, is the defining difference in these two experiences that old saw, location, location, location?

 

[Huston55]

I would be curious to see a poll of what percent of your retirement spend level are you anticipating your rental portfolio will replace.? This is what I keep calculating....and running through my calculators. As our rental portfolio increases the $ portfolio amount that i need to save decreases.

Our one rental will provide <10% of our FIRE income, and is <25% of our NW.

I don't want the hassle from having to deal with renters whether they are responsible people or not. It's too much like having a job and working even if I have an agent handling it.

I use a prop mgr for our one rental because I'm an absentee landlord. Although it costs 10% of rental income, I'm satisfied with the arrangement and it takes almost none of my time. The property also provides ~4% ROI, which is acceptable.

 

[tryan]

We're 3/4 rentals .... just couldn't help myself when SF homes were selling at auction for 33 cents on the dollar.

When you've been doing something long enough there are no surprises. Take care of the problems I want to ... hire out the ones I don't.

 

[VaCollector]

Used to gave 4 rental properties. Hated the hassle. Sold 'em all. Long time ago, rentals were my intended route to FIRE income. I hated dealing with people who destroyed my homes, and I hated repairing them over and over again.....
R

I did the same and for the same reasons...put the profits in the stock market...BAC specifically....and lost the majority of it , and other than putting it all in BAC, I'd do it again!

I still own one property but it is an office condo....and a solid 8% a year return even with any repair/up keep!