Hi Everyone --
Here's an update on my rental real estate strategy, 6 years later. During the economic downturn, we decided to purchase deeply discounted properties in Portland, OR, with the plan to use the rental income to fund retirement expenses, and to leave stock market investments alone. We fixed up the properties, probably a little more than we needed to because I kept thinking "you might have to live here one day..." We ended up with some good, low-drama tenants, and a couple more challenging ones. The mom with three kids was the worst, because we felt guilty raising the rent even as market rents doubled, and they trashed the place, requiring us to put in 10K to get it back to a sellable state.
We probably would have kept on being landlords, as the steady income is very reassuring, but Portland changed so much during the time we owned the properties that we now consider it too risky, and are selling all but one of our rental properties. There has been a lot of anger there about rising rents, movement towards implementing rent control, and recently the city council just passed an ordinance requiring landlords who don't want to renew a lease -- or who end a month-to-month tenancy without a for-cause eviction-- to pay thousands of dollars to the tenants. What a huge liability.
Over all, the asset appreciation was considerable -- so I guess the real estate investment wasn't exactly a mistake, but things didn't work out the way I expected. I thought this would be a fairly conservative investment, because I was very knowledgable about the town and its neighborhoods -- but I failed to realize how quickly political changes could come and how much they could affect real estate investments. I feel pretty humbled by the experience and wonder what other new things life will be teaching me... This is especially stressful, because now I need to figure out what to invest in with the proceeds, and I'd like to do a better job this time.
Thanks for reading
Here's an update on my rental real estate strategy, 6 years later. During the economic downturn, we decided to purchase deeply discounted properties in Portland, OR, with the plan to use the rental income to fund retirement expenses, and to leave stock market investments alone. We fixed up the properties, probably a little more than we needed to because I kept thinking "you might have to live here one day..." We ended up with some good, low-drama tenants, and a couple more challenging ones. The mom with three kids was the worst, because we felt guilty raising the rent even as market rents doubled, and they trashed the place, requiring us to put in 10K to get it back to a sellable state.
We probably would have kept on being landlords, as the steady income is very reassuring, but Portland changed so much during the time we owned the properties that we now consider it too risky, and are selling all but one of our rental properties. There has been a lot of anger there about rising rents, movement towards implementing rent control, and recently the city council just passed an ordinance requiring landlords who don't want to renew a lease -- or who end a month-to-month tenancy without a for-cause eviction-- to pay thousands of dollars to the tenants. What a huge liability.
Over all, the asset appreciation was considerable -- so I guess the real estate investment wasn't exactly a mistake, but things didn't work out the way I expected. I thought this would be a fairly conservative investment, because I was very knowledgable about the town and its neighborhoods -- but I failed to realize how quickly political changes could come and how much they could affect real estate investments. I feel pretty humbled by the experience and wonder what other new things life will be teaching me... This is especially stressful, because now I need to figure out what to invest in with the proceeds, and I'd like to do a better job this time.
Thanks for reading