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Old 09-23-2010, 12:32 PM   #21
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Real estate is good if you don't mind the kind of boss you are. Takes a fair dinkum of self actualization. Took me and my degree in the high dollar field of philosophy to 50 free and clear units. Did have to work for the man for a while - but my highest return was $15k/yr. from corporate. Haven't worked at anything else since I was 45 or so and got my BA when 27. Rental profit, even after giving 10% of gross rents to a manager, excedes my planned retirement income by about 20%.


Rentals are work - no doubt. Have this antiquated notion that return and effort have a direct correlation.
You can be a landlord on a small scale! I own a 2 family, live in one unit and rent out the other. There's no need to pay a management companyt as I live on the premises and I can tackle most repairs myself. It does require some time, but not much. However, I wouldn't take on a multiple unit place as it would be too much of a job.

The rent goes to extra principal payments. Having the rental income is great as it will keep pace with inflation and it's not immediately dependent on what the market is doing. If I need extra income I can simply move to the one bedroom flat downstairs and rent out the 3 bedroom flat I currently live in.
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Old 09-23-2010, 01:27 PM   #22
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You can be a landlord on a small scale! I own a 2 family, live in one unit and rent out the other. There's no need to pay a management companyt as I live on the premises and I can tackle most repairs myself. It does require some time, but not much. However, I wouldn't take on a multiple unit place as it would be too much of a job.

The rent goes to extra principal payments. Having the rental income is great as it will keep pace with inflation and it's not immediately dependent on what the market is doing. If I need extra income I can simply move to the one bedroom flat downstairs and rent out the 3 bedroom flat I currently live in.
Absolutely - eating an elephant is best done one bite at a time - was just indicating that real estate can end up being lucrative without having a massive beginning stake. Real estate involvement can be as great or easily manageable as one wishes - wasn't till the last year that I brought someone else in to manage.
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Old 09-23-2010, 01:50 PM   #23
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Absolutely - eating an elephant is best done one bite at a time - was just indicating that real estate can end up being lucrative without having a massive beginning stake. Real estate involvement can be as great or easily manageable as one wishes - wasn't till the last year that I brought someone else in to manage.
Sure, as you indicate it's best to start small and see if it's for you, that's why I think a 2 family is the best way to get into rentals.

Part of the reason I wouldn't get into more rentals is that I want to ER and managing multiple units is a full time job and even with a management company it's still a lot of money to have locked away in a single asset class.

I bought my 2 family in 1998 for $320k. Since then I've spent $100k on it (new siding, decks, new roof, kitchens etc) and today it's worth $600k which is about a 3% annual return. I'm lucky that I live in a suburb of Boston which hasn't been hit too hard by the housing crash.

I get $1400/month from the downstairs apartment which is like having $420k earning 4%. Once the mortage is paid off I'm set to ER.
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