Comments (scroll down to add your own):

1. I’m interested in this topic as well, though there seems to be a lot of pain (time, dealing with tenants, etc.) associated with being a landlord. I think buying cheap, fixing up a place, and then selling it quickly may be the way to go.

   Comment by FMF — May 16th 2005 @ 9:28 am

2. I agree that there might be a pretty major p.i.t.a. factor involved with managing rental properties. Ideally, I’d like to get into a situation where I could have the property managed. However, it seems unlikely that you’d be able to pull that off (at least not profitably) unless you’ve owned the property for awhile… After all, mortgage payments stay the same over time, whereas rent generally increases. After a few years, the rent that you’re generating should support the outsourcing of the grunt work. In many ways, it seems like the ideal situation for getting your feet wet would be to rent out your old house after you move. Assuming that there’s a decent rental market in your area, and assuming that you’ve been in the house for at least a few years, local rental prices should have appreciated relative to your mortgage payment, perhaps allowing you to put the property under management right away without having the management fees kill you.

   Comment by nickel — May 16th 2005 @ 10:30 pm

3. I can, unfortunately, speak from experience on the topic of rental property. It is very much a business, not an investment, and it is also very much a life style. Of course, the majority of renters are upstanding, honest and all around good people. Unfortunately, it seems to be a general rule that these people will always rent from someone else and not from you! In practice, a lease is worthless. If a tenant signs an iron-clad lease for one year and wants out after 2 months – they’re out of luck, right? Wrong! They will just call you every other day at all hours with small complaints until it becomes clear you are better off letting them out of the lease. I own and live in a 3-unit house and that has worked out pretty well. We rented out our old house and it was a disaster and is now on the market to be sold. Being right there seems to make it a lot easier, but living in a multi-family property isn’t for everyone, either.

   Long story short (oops, too late) – being a landlord can be a time consuming, frustrating and difficult job. And make no mistake that is very much a second job – not just an investment. It would be very difficult to turn a profit with a management company. Not only do you pay them their monthly fee, but of course you also pay every time they send in a repairman or what ever else they do.

   If you have the time, personality and inclination, there is certainly money to be made in rental property. Unfortunate, if it does not work out, it can be a very long and expensive lesson.

   Comment by Jason — May 17th 2005 @ 9:29 am

4. Jason,

   Thanks for an informative post. That’s definitely food for thought.

   –nickel

   Comment by nickel — May 17th 2005 @ 12:15 pm

5. Some suggestions for real estate books, these are all for rental, not flipping:

   Rental Houses for the Successful Small Investor by Suzanne P. Thomas

   -Great beginner book, no pie-in-the-sky get rich talk. Just nuts ‘n bolts info from a experienced woman investor. Best if you are gonna go the single family route.

   What Every Real Estate Investor Needs to Know About Cash Flow
   by Frank Gallinelli, Frank Gallinelli

   -Have not finished this book, but this is the part that most new investors neglect, cash flow analysis of the property before they buy it.

   Make Money with Small Income Properties
   by Gary W. Eldred

   -tons of great tips on getting the most out your property, avoiding pitfalls. Easy to read and packed with info.

   Every Landlord’s Legal Guide (Every Landlords Legal Guide) — by Marcia Stewart

   - must have book if you do get investment property, includes a disc with 20 forms including rental/leases. Landlords are the most sued people in real estate; keep your bee-hind out of hot water with this book.

   Avoid all books by supposed “gurus” like Robert Kiyosaki (Rich dad, poor dad) & carlton sheets (Mr. No-cash down infomercial). Here is a link rating all the gurus:

   http://www.johntreed.com/Reedgururating.html

   Also, go to a local landlords/REI club, its $15 at the door for non-members. Lots of info there.
   Look up the RE classes at your local community college, there should be some for REI; I am taking a class on property management now, it great, only $65.00. Thirdly, go to the Creative Investor website and join the forums (http://www.thecreativeinvestor.com) it’s one of the best on the WWW for REI. Good luck.

   Comment by d_Random — Jun 3rd 2005 @ 4:55 pm

6. There are a number of great resources and techniques out there to get the most out of real estate. The tradition method of buying, holding, renting and selling actually is not the most lucrative. Conversly, the buy to flip market is currently taking a dive. Short sales and subject to purchases to invest in real estate may currently be your best opportunity.

   -Alan

   Comment by Alan James — Feb 3rd 2006 @ 1:45 am

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