LandlordInvestor
Dryer sheet wannabe
Yeah.. the risk is what he is asking about.
I see several areas of risk:
Neighborhood shift. There could be a significant shift in the class of the neighborhood over the years. I have seen this occur and it can affect your tenant class, rents you can pull, vacancy rates, property condition, etc..
Property condition. The condition of the properties can certainly drop off over time. I have several built in the 50's. These are 60 years old today and I am anticipating they last another 30 at least. For me, I don't see any issues. These are well built, brick homes, pier and beam foundations - they built them good back then. If you maintain them properly, you should not have an issue. I have a Fox and Jacobs slab built in the late 70s that I am more concerned about than my old stuff.
Self managment vs property manager. I see this as a bigger risk for me. Today we self manage our properties, but I dont think I can do this in my mid 70's or 80's. Even 10 years from now -- I could be saying I want OUT. It's not our current plan to turn they keys over to a PM, but it could happen. In my retirement calculators I assume we will turn over they keys at 65 and I even put in that we will "sell the turd" a few times in the timeline. i.e. we will sell a property that may turn south on us every ten years or so. I don't see it now, but I plan conservatively.
Liability. Always an issue for a landlord. I am umbrella'd up currently and might even hit the LLC button in a few years. This will shift some of it, but its always out there with rentals.
I think these are the biggest risk. The returns are great.. for me its a matter of can I run the marathon and keep them going or will I wear down and lose the passion of managing rentals at some point? I think rentals still give you plenty of options even in this scenario....
I see several areas of risk:
Neighborhood shift. There could be a significant shift in the class of the neighborhood over the years. I have seen this occur and it can affect your tenant class, rents you can pull, vacancy rates, property condition, etc..
Property condition. The condition of the properties can certainly drop off over time. I have several built in the 50's. These are 60 years old today and I am anticipating they last another 30 at least. For me, I don't see any issues. These are well built, brick homes, pier and beam foundations - they built them good back then. If you maintain them properly, you should not have an issue. I have a Fox and Jacobs slab built in the late 70s that I am more concerned about than my old stuff.
Self managment vs property manager. I see this as a bigger risk for me. Today we self manage our properties, but I dont think I can do this in my mid 70's or 80's. Even 10 years from now -- I could be saying I want OUT. It's not our current plan to turn they keys over to a PM, but it could happen. In my retirement calculators I assume we will turn over they keys at 65 and I even put in that we will "sell the turd" a few times in the timeline. i.e. we will sell a property that may turn south on us every ten years or so. I don't see it now, but I plan conservatively.
Liability. Always an issue for a landlord. I am umbrella'd up currently and might even hit the LLC button in a few years. This will shift some of it, but its always out there with rentals.
I think these are the biggest risk. The returns are great.. for me its a matter of can I run the marathon and keep them going or will I wear down and lose the passion of managing rentals at some point? I think rentals still give you plenty of options even in this scenario....
