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Old 09-19-2012, 06:11 PM   #21
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I think back to OP, I would consider a primary residence and investment in individual properties and/or REITs as separate items.

A personal residence has lots of advantages and would recommend this if you can afford it. One big advantage is that you will pay a similar amount in rent or payments. However, you payments (principal and interest) don't go up with inflation like rent does. 2nd big advantage is one day you will have a place to live without payments or rent.

On rental properties, we have owned several and I don't manage them. First, you need to look at them like any other investment, what do you invest and what is your return. It does take some time and effort, but then so does any other good investment. You gotta watch them all. Just went through this with a bud and he bought a house in Reno. He should get 6% return with management costs included (he paid cash).

My view FWIW
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Old 09-19-2012, 06:18 PM   #22
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MBAustin, AMEN! Don't assume your kids will be delighted to receive (what you perceive to be) a valuable gift.

You name it, it happened to me: I had one of dad's tenants try to sneak into dad's intensive care room (by telling the nurse he was my brother) to sign a "release", thus gifting the house to the tenant. The one good payer we had passed away, leaving his wife with no life insurance and a mortgage. She is a nursing assistant at a retirement home. And one guy moved in with the sole purpose of suing me to try to steal the house from me. That was HIS retirement plan. Thank heaven the judge saw it differently. That only cost me $22,000 in legal fees, and he left the house in shambles. I sold it for pennies on the dollar.

So again, have an exit strategy. Your kids may not live near the properties, and even if they do, they may have absolutely no interest in trying to fill your landlord shoes.
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Old 09-20-2012, 03:58 AM   #23
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My experience with tenants has been that anything can happen. One more element of risk. Personally if I need the income that a rental property would provide I would keep my day job for a little longer. Much easier, more profitable and I sleep well at night. I strongly prefer liquid investments that I can follow at my leisure.
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Old 09-20-2012, 04:32 AM   #24
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me tooooooooooooooooooo!
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