Hello from a newbie

[Markola]

Welcome and keep us posted! I shaved YEARS off my FIRE date thanks to things I learned about here and then probed in additional posts, most prominently the Rule of 55 with our workplace retirement plans. We both quit full time work while we were 54, thanks to that and many other nuggets. We’ve since added in enjoyable part time, remote, highly flexible work for stimulation and income, which is allowed around here, too.

 

[Biracialgirlie]

Landlording

Welcome! I was a landlord once, for a year. The tenant stopped paying rent, and I used his deposit to cover repairs. Owning rentals with positive cash flow is great, but IMHO, you need to have $ on hand for eventual repairs, damage, unrented periods, etc. Most of us here, don't consider FIRE a movement, and most of us wouldn't try to cut it as close as it appears that you're trying [few Lean FIRE folks here]! Best wishes, but just ensure that you've answered all of the questions in the following thread:
https://www.early-retirement.org/fo...-answer-before-asking-can-i-retire-69999.html

Cheers!

I actually hate landlording I do t think renting anymore than the two units that I own for rentals is something I will ever do… LA is actually the most hostile toward landlords.. it’s ruined my dream of being a landlord … . Everything goes against the landlords and at this point it’s as of I’m basically lucky every month I receive rent because if they stopped , I wouldn’t be able to get a court date for years . By then, I’m sure that I wouldn’t get back rent

 

[street]

Welcome!

 

[CincyDave]

Welcome! you'll learn a lot here. I know I have. With $1.5 mill in real estate generating $36K in rents annually, it works out to about a 2.4% return. I don't own rental property as being a landlord never appealed to me. You should be able to do better with the money in the market long term, but with more volatility. I know there is possible price appreciation of the properties to think about as well, and I didn't include that, but if you don't like being a landlord, something to think about.

 

[Biracialgirlie]

Markola

welcome and keep us posted! I shaved years off my fire date thanks to things i learned about here and then probed in additional posts, most prominently the rule of 55 with our workplace retirement plans. We both quit full time work while we were 54, thanks to that and many other nuggets. We’ve since added in enjoyable part time, remote, highly flexible work for stimulation and income, which is allowed around here, too.

love it!

 

[Biracialgirlie]

Thank you!

welcome!

 

[Biracialgirlie]

Concydave

Welcome! you'll learn a lot here. I know I have. With $1.5 mill in real estate generating $36K in rents annually, it works out to about a 2.4% return. I don't own rental property as being a landlord never appealed to me. You should be able to do better with the money in the market long term, but with more volatility. I know there is possible price appreciation of the properties to think about as well, and I didn't include that, but if you don't like being a landlord, something to think about.

Alll such great food for thought ⛱

 

[jollystomper]

Welcome aboard! I found this site 10 years ago and it made a world of difference in my quest to FIRE. I was not born with the "landlord" gene so I applaud you. Given your concerns about landlording, I agree with others who say looking at a strategy of even slowly shifting some of that investment to the markets is something to consider. The key I have found is taking a long term view. Best of luck to you!

Edited to add: do you own any I Bonds? It is a requirement on this site, with their current return .

 

[Time2]

Thanks for your advice! What is the RE market? As far as selling my rental property, I have considered it because it would be amazing to have that chunk of money in my savings…but I figured that if I could still get the $2200 rent per mo, it would be like getting a paycheck every two weeks when I do finally FIRE, buuutt I would always have the option to sell it later if I feel I need it, and by that time I’ll get more money? Does that make sense? That’s kinda my lay person thinking /plan I’ve come up with . But I’m still learning and definitely flexible

You could always get a HELOC on your home, a $300k HELOC would allow you to write a check anytime you have the need. No need to use it until you have the need, but it is always there. Look for a bank with a nice teaser rate, I had 0.99% for 6 months, but that was just after rates started to rise.

 

[Time2]

Thanks for the welcome , Gumby! welll I own two properties in Los Angeles , outright (one is worth about 700k (which yields $2200 rent per mo) and the other is a duplex worth 800k (I live in that one with my fiancé’ & I get $800 rent per month from the tenant in the back unit due to Los Angeles’ strict rent control laws). I want to save $300K because we just bought land in Joshua tree but it needs EVERYTHING… water, power, septic and we want to put a tiny home on it and eventually move into it and then rent the duplex that we currently live in for about $2500… sooo I’d be bringing in about 5k a month at a minimum … . But other than that I wouldn’t have much cash reserves ..

You might put a little analysis into the into the $700k, $26,400 gross return, I don't know the property taxes, but say you get 80% of the gross, that is a 3% return, plus growth of the property value. Not sure how property values are going forward with interest rate increases. You also have to figure out what you get after paying tax on the gains from the sale. With the little info I have I'm leaning towards a sale because of the low return and possible low housing inflation going forward and wishing I had money to invest in the stock market while it's on sale.

If you bought the property for $300k and sold it for $700k, having a $400k capital gain on a rental will put you in the 35% tax bracket, That could be a $140,000 tax bill, in a worst case situation. Leaving you with $560k. That complicates the decision.

 

[Biracialgirlie]

Thanks for the welcome

Welcome aboard! I found this site 10 years ago and it made a world of difference in my quest to FIRE. I was not born with the "landlord" gene so I applaud you. Given your concerns about landlording, I agree with others who say looking at a strategy of even slowly shifting some of that investment to the markets is something to consider. The key I have found is taking a long term view. Best of luck to you!

Edited to add: do you own any I Bonds? It is a requirement on this site, with their current return .

No I don’t own any bonds… to be honest I don’t know anything about bonds I do have a 401k though ?

 

[Biracialgirlie]

Tax and profits

You might put a little analysis into the into the $700k, $26,400 gross return, I don't know the property taxes, but say you get 80% of the gross, that is a 3% return, plus growth of the property value. Not sure how property values are going forward with interest rate increases. You also have to figure out what you get after paying tax on the gains from the sale. With the little info I have I'm leaning towards a sale because of the low return and possible low housing inflation going forward and wishing I had money to invest in the stock market while it's on sale.

If you bought the property for $300k and sold it for $700k, having a $400k capital gain on a rental will put you in the 35% tax bracket, That could be a $140,000 tax bill, in a worst case situation. Leaving you with $560k. That complicates the decision.

Yes, I’ve really never done the analysis regarding whether I’m using my asset as the best Avenue. Fir returns…maybe I just kinda have an attachment to the house I’m renting out I should probably learn more about investing while I’m here … my goal right now is to just is to get a job and put allll of that money into building our new little property in Joshua tree and then FIRE retire if I choose live off the 5k rental income… I forgot to mention my 401k which I coukd tap into in 9 more years if needed … sooo many ways to think about doing things. But I love learning from you guys! It’s all food for thought

 

[CincyDave]

Yes, I’ve really never done the analysis regarding whether I’m using my asset as the best Avenue. Fir returns…maybe I just kinda have an attachment to the house I’m renting out I should probably learn more about investing while I’m here … my goal right now is to just is to get a job and put allll of that money into building our new little property in Joshua tree and then FIRE retire if I choose live off the 5k rental income… I forgot to mention my 401k which I coukd tap into in 9 more years if needed … sooo many ways to think about doing things. But I love learning from you guys! It’s all food for thought

Look up the Rule of 55, You could probably tap the 401K at age 55 if you really needed to.

 

[pacergal]

Welcome!
You are debt free, have potential rental income of $5K in the future, and sounds like your retirement place will be paid for at the time. I think you will do fine. 60K/yr is pretty good income, plus you will have SS in the future and assuming your BF has income as well.
Best of Luck in your FIRE journey. Keep us posted.

 

[Time2]

Yes, I’ve really never done the analysis regarding whether I’m using my asset as the best Avenue. Fir returns…maybe I just kinda have an attachment to the house I’m renting out I should probably learn more about investing while I’m here … my goal right now is to just is to get a job and put allll of that money into building our new little property in Joshua tree and then FIRE retire if I choose live off the 5k rental income… I forgot to mention my 401k which I coukd tap into in 9 more years if needed … sooo many ways to think about doing things. But I love learning from you guys! It’s all food for thought

Do you know what the gain on your rental is, i.e. what you can sell it for minus selling expenses vs bought it for?

 

[mickeyd]

Hello from a newbie

Welcome here.
Remember what you paid for all of this good advice. Just sayin...

 

[Biracialgirlie]

I gotta

Do you know what the gain on your rental is, i.e. what you can sell it for minus selling expenses vs bought it for?

I gotta Crinch those numbers

 

[Biracialgirlie]

Welcome here.
Remember what you paid for all of this good advice. Just sayin...

Thanks

 

[Biracialgirlie]

Pacergal

Welcome!
You are debt free, have potential rental income of $5K in the future, and sounds like your retirement place will be paid for at the time. I think you will do fine. 60K/yr is pretty good income, plus you will have SS in the future and assuming your BF has income as well.
Best of Luck in your FIRE journey. Keep us posted.

Thank you!!!

 

[Biracialgirlie]

Ugh

Welcome! I was a landlord once, for a year. The tenant stopped paying rent, and I used his deposit to cover repairs. Owning rentals with positive cash flow is great, but IMHO, you need to have $ on hand for eventual repairs, damage, unrented periods, etc. Most of us here, don't consider FIRE a movement, and most of us wouldn't try to cut it as close as it appears that you're trying [few Lean FIRE folks here]! Best wishes, but just ensure that you've answered all of the questions in the following thread:
https://www.early-retirement.org/fo...-answer-before-asking-can-i-retire-69999.html

Cheers!

Landlording can be soo. Stressful… I can’t get over the fact that there are soooo many people that don’t pay their bills thanks bill ;-)

 

[Timeisprecious]

Welcome, Girlie! Nice that you joined us. As others have said, lots to learn here. Keep coming back.

 

[Biracialgirlie]

Thank you

Welcome, Girlie! Nice that you joined us. As others have said, lots to learn here. Keep coming back.

And your name, timeisprecious, ties in perfectly !