Re: Nothing quick about getting rich with real est
Not only is the nothing quick about getting rich with real estate, there is nothing guaranteed about it either. A little over a year ago, I bought an investment house in my hometown of Portland, Oregon. It's not the best market for rentals, but it's where I live(d).
Everybody told me how brilliant I was, how there is lots of money to be made. That is true. Lots of money HAS been made, by the loan broker (complete scoundrel), my realtor (well meaning but has no clue about taxes and operating costs), my lawyer (who sold me three LLCs at $800 a pop to "protect" me), my accountant (who charged $1000 to do the taxes because he had to fix my creativity in quickbooks), and my property manager (whom I had to hire when my job took me to the east coast).
I had done my best due diligence beforehand, made very conservative estimates and projections. However, every single category of expense has been two to ten times higher than my predictions. Part of this is due to the unexpected move. But most of it is due to "professionals" giving best case scenarios to get me to jump in. If I hold this property for ten to thirty years, I will almost certainly see a reasonable return on my investment. However, based on my new, even more conservative projections, I will likely not see returns any higher than the market average. And it's a giant pain in the ass to manage. Rental income is classified as "passive" income for tax purposes, but it could not be farther from passive. I'd say maybe passive-aggressive, but if I put that in my quickbooks, I'll be in for another $1000 charge from my accountant.
I am strongly considering selling the property and getting back into normal investments. I can't make enough to justify the effort and the liability exposure.
To anybody considering investment property, I strongly suggest you do real research that includes interviews with people who are like you: presumably just working chumps who decided to buy a house or small multi. Do not allow yourself to follow advice of those who will make money when you bite. They will all tell you what they told me: "You are so brilliant."
Buyer beware.
PS I think the market growth will likely slow, so no matter what, if you invest now, you are "buying high". Think twice, and for each thought, think twice again. Think at least 2 to the tenth times. Think once for every percent of profit you think you're going to get.
PPS Because I am dumb but not a complete idiot, I may see a few thousand dollars in profit after this whole event. However, that is not enough to make it worth the time and tears. I can just say: Education is always expensive.
PPPS Good luck to all of you. May you fare better than I have.