Sell or Keep Properties?

[Boogerman]

Sell. Use homeowner exemption on one house to exclude gain from taxes. If you desire, do a 1031 Starker Assisted exchange on the other into your dream hobby farm. Gray area of tax law, can you live in and eventually sell the exchange property under homeowner exemption? Talk to a good accountant and tax professional for that advice; if your appatite for small risks is good, it can work out well. This is from personal experience; worked out real well for me but do your own research and get good advice. When I did it; hadn't been litigated yet; statute of limitations went by and I'm clear now. Haven't researched new case laws lately.

The income level you describe is terribly low for the investment you have; you can do much better by reinvesting profits in something more appropriate and/or in a payment free residence to live in. Plus, you get rid of the headache and problems of 1000 mile separation.

 

[Old Man Roger]

Sell. Use homeowner exemption on one house to exclude gain from taxes. If you desire, do a 1031 Starker Assisted exchange on the other into your dream hobby farm. Gray area of tax law, can you live in and eventually sell the exchange property under homeowner exemption? Talk to a good accountant and tax professional for that advice; if your appatite for small risks is good, it can work out well. This is from personal experience; worked out real well for me but do your own research and get good advice. When I did it; hadn't been litigated yet; statute of limitations went by and I'm clear now. Haven't researched new case laws lately.

The income level you describe is terribly low for the investment you have; you can do much better by reinvesting profits in something more appropriate and/or in a payment free residence to live in. Plus, you get rid of the headache and problems of 1000 mile separation.

I thought taxes were one of the things that didn’t have a statute of limitations? I could be wrong, not a tax lawyer..lol

 

[Boogerman]

I thought taxes were one of the things that didn’t have a statute of limitations? I could be wrong, not a tax lawyer..lol

3 years to audit a return, generally. 6 years to audit in the case of a basis underreporting on a capital gains transaction, or other "gross understatement of income". Not attorney, this advice for amusement purposes only! Like I said first post, talk to good accountant and tax professional for advice on the risks. My accountant said "not litigated yet, you too small to make good case law, so unlikely you be chosen for test case".

 

[Youngandfree]

I'd refinance and cash out the equity out of those and keep renting them. No taxes on that cash.

 

[75gmck25]

I sold my rental house in March of this year and had quite a few folks give me advice about the Starker 1031 Exchange option.

The exchange investment does not have to be identical, so apparently one popular choice is to sell the house and invest the money in a good quality storage unit company. I assume that in most cases you are buying just an interest in the unit and business, so someone else worries about the staffing, maintenance, etc.

 

[evildky]

I will repeat, you have some expense for that income, it is not all profit.

$300,000 invested in a mutual fund on the stock market, going off past history will return close to 10% at least I have done it for over 30 years. Drop that number in an investment calculator at 9% and it returns an additional $3.6 million on 30 years. and no work or expense involved.

This is a gross misrepresentation of the math. his cashflow for this year is likely less than the cash flow for next year. the thing people fail to understand about real estate is there are generally three sources of revenue.
First cashflow, lets say for arguments sake the total net yield is 4% annually
Second, appreciation, which averages about 4% per year although we have seen monster returns int he past few years, we are likely to see some contraction soon.
Third debt reduction, the bank is happy to partner with you by way of a mortgage, most people will opt for a 30 year loan, I prefer the 20 year because after 5 years the principle had reduced by about 20% which s to say 4% average per year (obviously the yield is less on a 30 year and if you continue with that 20 year the second set of 5 years yield mush higher.
Fourth, tax reduction. Yes you must claim the net income form the property but you get to deduct or depreciate all your expenses with said property you additionally get to depreciate the house over 27.5 years wiht math's out to around 3.5%.
This yields about 15% annually.
No it's not for everyone, but all the wealthiest people are in real estate. the English monarchy is essentially a real estate investment company that is centuries old with real estate taken by force.

 

[victor252]

Didn't read all the responses but I'll just throw out very basic math.
1.08^25 is about 6.85
So if you put $1 in an investment product that returns 8% each year for 25 years, with compounding returns, you will have $6.85.

If you put $250,000 in a stock portfolio, you should have about $1.7 million before you need to put a chunk of it into short-term bonds.

Making 8% a year in real-estate is hard work that involves using leverage to grow a real-estate portfolio and manage it. Making 8% in the stock market requires no work. As long as you don't panic and sell, you'll do at least 8% with a mix of large and small cap stocks. Don't even bother actively managing it. Just invest in index funds and re-balance your asset allocation when you're in your fifties or early sixties.

As far as cashing out and having a dream home, that's not something I can speak on because I don't know you. I don't know how much you value current enjoyment over a sizable future portfolio. I'm just doing basic math over here.

 

[PoorUB]

don't sell your property. because this is a really good assest for you in the future.

What is wrong with selling it, reinvesting the money? You still have the asset.

 

[PoorUB]

This is a gross misrepresentation of the math. his cashflow for this year is likely less than the cash flow for next year. the thing people fail to understand about real estate is there are generally three sources of revenue.

15% on Real estate? I seriously doubt it, unless you hit some weird short term growth or happen to be in the right place at the right time, but average real estate is no where close to that.

My dad and I built a house 45 years ago. We did pretty much all of it and he had roughly $20,000 invested. I sold that house a while back for $175,000. Now I admit it needed some work, but a good friend that sells real estate in the area showed me similar sized homes in the area and nice ones were going for $225,000. So my Dad's $20,000 investment turned $175,000, but could have been more if he had put more money back into it and kept it up better, (which essentially would have increased the investment cost.) He still had to mow the grass, plow the snow, pay the heat and light bill, taxes, and other costs. (About 5.5% a year growth)

Now that same $20,000 invested at 8% for 45 years would have turned into about $640,000. (At 8.7% it is $850,000)

My own home, I paid $70,000 for it 30 years ago. Today it is worth maybe $225,000, but I just dropped about $10,000 in materials into it the last couple years, plus a lot of my own sweat and blood. Plus endless hours of maintenance, taxes, (About $50,000 over the years!), heat and lights over that 30 years. it works out to a bit less than 4% a year not figuring the taxes!

$70,000 for 30 years at 8% comes to $700,000. (At 8.7% it is $855,000)

If you had invested in a mutual fund on the Dow Jones Industrial average in 1998 you would have averaged 8.7%. Even the last 10 years with this crappy years it is abut 10.25%.

Keep in mind there is always some expenses in real estate. You can buy no-load mutual funds and have close to zero cost on your investment.

 

[Boogerman]

Got curious; did more research on 1031 exchange current state of law: You can 1031 exchange rentals into personal residence; and when sell exclude gain as if 1031 exchange didn't occur. The gain would be calculated from the basis brought forward in the 1031 exchange. Congress amended laws to remove gray area previously there; but came out more favorable to the taxpayer anyway.

Here link to more info:

Converting Investment Property to Your Primary Residence

www.firstexchange.com

 

[LOW1]

It depends on what you measure. If you are calculating a return on your cash down payment you can get a very solid return. The return on the gross value of the real estate may be much lower.

The recent increase in interest rates and your areas current and future rental markets may change these calculations.

 

[MBfreak]

We are GJers!
Sell all and buy lots of tools for the full amount.

Ola

 

[Greeny]

It's a gamble on a couple fronts. We can't know what the market is going to look like when we want/need to sell. You could end up with a nightmare occupant. I did.
I had a rental for over 20 years. A lot of that time I was overseas, all of that time I was out of state. I had a couple headache renters the first couple of years, but it was manageable. I had a good property manager. Then I got a good tenant, she was there for about 20 years. Took good care of the house and yard, never a late rent payment. She aged and got dementia and about a year ago, her son and DIL moved in to care for her. The yard filled up with trashy toys and swings and playpens. The city sent notice they were going to fine me and bill me for cleanup. Missed the first rent payment in April. Missed a rent payment in May. Sent an eviction notice. Learned my tenant no longer lived there and the son was in jail. The DIL and three dogs were squatting there now. She wouldn't pay rent and refused to leave. She wasn't paying any other bills either and the power, water and gas were shut off mid June. In July the house caught fire in the garage. FD got the fire out pretty quick, the garage was a loss, but the rest of the house only had smoke damage. Squatter refused to leave until charities helped her out, Red Cross, Salvation Army, local churches, etc. City, Police, Sheriff wouldn't help, said it was a civil matter. Had to go through courts, waiting for a hearing date. Judge found in my favor and ordered eviction in Oct. She still refused to leave. Police wouldn't help, referred me to the Sheriff, who was too busy to do anything till the middle of Nov. She finally left just before the Sheriff was going to forcibly remove her.
Overall, it worked out ok for me. The long time tenant paid off the mortgage. The insurance was very generous and the settlement was more than we could have sold for, even before the squatter trashed and burned the property. The plan now is to get out of the landlord role, sell the property for whatever I can get for it, or even give it away and let the next owner deal with the cleanup.

 

[BarryWells]

Looking for input from those wiser than myself. I own two townhomes, one is a rental making income, one is occupied by me at low cost. I bought them as investments and the property values have appreciated significantly since purchase in 2018/2019. My original plan was to keep the homes until I retire and they're paid off, then either sell or continue to rent for additional retirement income. I don't particularly enjoy being a landlord, but it's worked out so far.

I've recently moved out of state to occupy a vacant family home for free for at least the next year. I would really like to purchase a long-term home with some acreage to start a small hobby farm in the near future.

Details:

• Rental is bringing in about $750/mo average
• Other house could be rented out to bring in additional $675/mo, otherwise it costs $400/mo to keep empty
• Selling both homes today would put a liquid $315k in my pocket after fees (estimate based on recent comps sold in same neighborhood)
• Annual income from my employer is $85k gross
• I am 30 - 35 years away from retirement age
• Home values are up and acreage isn't cheap

So the questions start rolling in. Should I sell now, capture the profit off the investment and put into a personal home? Put profit into a fund and let sit for the next 30 years for ROI instead of actively land-lording? Should I keep renting and use residual income to help secure a third mortgage for personal home? Sell one, keep the other? etc.

There is an emotional component to this too - managing properties by oneself is pretty taxing, especially when you work a demanding full time job. Living in the same state is no longer feasible (choosing to be closer to family/friends again), so I'm now 1000+ miles away. Property management companies are very expensive, and add another layer of people that need managing/direction. The good news is the HOA takes care of all exterior maintenance/landscaping. I'm a 2hr plane ride away, but not close enough to justify taking care of all the maintenance myself like I normally do. So profit would disappear if I let others manage/repair, but the homes would still be building equity.

Because rents are high in the area, my total income is well into the 6-figures and income taxes are high. I'm unable to save much more than $10k per year liquid after I cover housing expenses, taxes, minimal personal expenses, contribute to 401K, HSA, and personal investment account. I also feel I have to maintain a 6-month emergency fund on hand for all expenses incase I lose my job, can't get renters in, HVAC blows up, etc. So saving for a minimum down payment/closing costs on a third house with acreage will likely take me 3 - 5 more years at the current rate, and it would be a real grind (minimum enjoyments). If I take profits from the sale and dump it into a personal property, there's a chance the mortgage would be small, possibly non-existent if I could find a good fixer-upper.

Conclusion: Life has been a largely unenjoyable grind for the past 5 years. It has paid off so far, but I feel I'm ready to invest in more personal endeavors. Would I severely impact retirement by selling homes now? Or should I leave everything alone and just keep scraping money together for my future home?

Buy land in coastal Nicargua

 

[PoorUB]

It's a gamble on a couple fronts. We can't know what the market is going to look like when we want/need to sell. You could end up with a nightmare occupant. I did.
I had a rental for over 20 years. A lot of that time I was overseas, all of that time I was out of state. I had a couple headache renters the first couple of years, but it was manageable. I had a good property manager. Then I got a good tenant, she was there for about 20 years. Took good care of the house and yard, never a late rent payment. She aged and got dementia and about a year ago, her son and DIL moved in to care for her. The yard filled up with trashy toys and swings and playpens. The city sent notice they were going to fine me and bill me for cleanup. Missed the first rent payment in April. Missed a rent payment in May. Sent an eviction notice. Learned my tenant no longer lived there and the son was in jail. The DIL and three dogs were squatting there now. She wouldn't pay rent and refused to leave. She wasn't paying any other bills either and the power, water and gas were shut off mid June. In July the house caught fire in the garage. FD got the fire out pretty quick, the garage was a loss, but the rest of the house only had smoke damage. Squatter refused to leave until charities helped her out, Red Cross, Salvation Army, local churches, etc. City, Police, Sheriff wouldn't help, said it was a civil matter. Had to go through courts, waiting for a hearing date. Judge found in my favor and ordered eviction in Oct. She still refused to leave. Police wouldn't help, referred me to the Sheriff, who was too busy to do anything till the middle of Nov. She finally left just before the Sheriff was going to forcibly remove her.
Overall, it worked out ok for me. The long time tenant paid off the mortgage. The insurance was very generous and the settlement was more than we could have sold for, even before the squatter trashed and burned the property. The plan now is to get out of the landlord role, sell the property for whatever I can get for it, or even give it away and let the next owner deal with the cleanup.

That story makes investing a great deal!

My neighbor bought a house, intended to rent it. I helped him get in shape and he rented it to the first POS that came along. The guy moved in, paid rent for a couple months, then stopped paying. He finally got him evicted. It was a mess and he painted replaced the carpets fixed holes in the walls and put the place up for sale! I forget, but he told me what the loss was on the deal.

 

[Beelzeboss]

FWIW my wife and I sold our investment apartment about 2 months ago to load up our offset account to combat these crazy interest rates. House prices are dropping dramatically in Australia at the moment, we didn't pick the top of the market but I think we got out at the right time.

 

[finn]

My friend was up to eight rental houses last fall.

He got sick of having to evict people and having to clean up after tennants who thought it was ok to cook meth in the kitchen sink.

He sold them all and used the proceeds to invest in equipment for his little construction business.

Sort of funny, or maybe sad about the string of bad renters that pushed him over the edge, as we had a deep discussion a couple of years prior,where he described all the hoops he was jumping through to insure he had good renters.

Another couple we know have rented their suburban DC house out for about thirty years. They live in Chicago, so they have a management company take care of it. They have been through a half dozen management companies, each great compared to the last one…until it isn’t.

The one story I remember is the February they got a call from the neighbor alerting them that water was running out of the second story, turning the front of the house into an ice sculpture.. I think damages came to about $80k.

 

[teagueo]

I've been debating cutting my rental property loose too. Originally got it to pay for my living expenses in Thailand (~$1,000USD/month).

I picked up a 4 unit in Youngstown, OH for 110k and after mortgage and bills, it nets around $1,500/month. You tend to make higher profits in these hood areas but the renters can be heinous.

I'm out of state and just got a property manager but they **** too...I guess the key is to not get too attached to the outcome and let it roll, make some money!

 

[evildky]

15% on Real estate? I seriously doubt it, unless you hit some weird short term growth or happen to be in the right place at the right time, but average real estate is no where close to that.

My dad and I built a house 45 years ago. We did pretty much all of it and he had roughly $20,000 invested. I sold that house a while back for $175,000. Now I admit it needed some work, but a good friend that sells real estate in the area showed me similar sized homes in the area and nice ones were going for $225,000. So my Dad's $20,000 investment turned $175,000, but could have been more if he had put more money back into it and kept it up better, (which essentially would have increased the investment cost.) He still had to mow the grass, plow the snow, pay the heat and light bill, taxes, and other costs. (About 5.5% a year growth)

Now that same $20,000 invested at 8% for 45 years would have turned into about $640,000. (At 8.7% it is $850,000)

My own home, I paid $70,000 for it 30 years ago. Today it is worth maybe $225,000, but I just dropped about $10,000 in materials into it the last couple years, plus a lot of my own sweat and blood. Plus endless hours of maintenance, taxes, (About $50,000 over the years!), heat and lights over that 30 years. it works out to a bit less than 4% a year not figuring the taxes!

$70,000 for 30 years at 8% comes to $700,000. (At 8.7% it is $855,000)

If you had invested in a mutual fund on the Dow Jones Industrial average in 1998 you would have averaged 8.7%. Even the last 10 years with this crappy years it is abut 10.25%.

Keep in mind there is always some expenses in real estate. You can buy no-load mutual funds and have close to zero cost on your investment.

Your compounding your stock investment without subtracting for the tax penalty.

As I broke down, it's not a simple as a 15% return, and each property is different. Most of mine have seen far greater appreciation than cashflow, fortunately I own enough doors to make a living. First house I bought in 96 for $40k is now worth about $250k, that's about 8% annualized average appreciation compounded monthly. Just appreciation, not cashflow, not accounting for the fact that I'm depreciating the property and not counting for the increased return due to the use of leverage.

The second investment home I bought in 98 I paid 8 $80k now worth about $180k, that's a little less then 4% annualized average appreciation, again, not counting for cashflow or the fact that I'm depreciating it or the increased yield due to leverage.

Not every house works out as well, generally higher rent relative to value means higher turnover, higher turnover cost and less appreciation.

Real estate is not right for everyone, but it's how I feed myself.

If I had bought the DOW for average price in 96 of 5700 that would be worth $34k today, that's about an 8% annualized return compounded monthly. Assuming you just bought the dow and made no trades or splits that resulted in a tax event, and you had no additional cashflow from it, you could then sell that asset and pay the gain, you could not exchange it for a like kind investment as you can with a 1031 in real estate. but it's completely passive and can be exchanged for dollars wiht the click of a button.

 

[PoorUB]

Your compounding your stock investment without subtracting for the tax penalty.

You will pay tax on your real estate when you cash out too.

Look, no argument that you can make money on real estate, it just is not that wonderful as many make it out to be. There are many things that can go wrong, stupid renters is probably number one. Stocks go up and down too so it is not a perfect deal either, but I would sleep a lot better with my money in some stock based mutual fund that ******* in rental property.

If it matters I managed rental property for a while until i decided I had enough of dealing with people that thought the world revolved around them and they didn't care about anyone else. I would not want to think about these people in my property and what they are doing to it!

 

[yeldogt]

People are forgetting that the rental properties are not costing the value of the house ... when I bought my Philly row homes for 50k they did not cost me 50k. I could not sell them and pocket 50k to put it into the stock market or other investment. On average I put 10k into them ... most had a tiny positive cash flow.

Time is your friend .... I had more than one so the risk was spread out. I also used a HELOC early on so any misstep just added some additional cost to the line. Over time if you buy correctly and get the right tenant (that requires buying the right rental house) -- positive cash flow grows and the value of the house grows.

I did not keep adding more and more rentals ..... I built up a nice manageable group and let them ride. The rents paid off the notes ..... this did not maximize the return it was what I wanted to do. Years ago I wanted the equity sitting there as it allowed some other things I did on the personal side (banks like seeing that equity)

Fast forward 30-40 years and you end up with paid off houses that someone else paid for. A 50k house that sold for 400k ... only cost you k10 to purchase and generated many many 10's of thousands in it's lifetime is a good way to make some $$

 

[mikeyr]

land is always the best long term investment, especially if it has a rentable house on it. But I would sell for the reason you stated, its not fun being a landlord. I had a house I was renting with a "you want fries with that?" type of job to pay the mortgage, that is to say nearly 100% income. I hated being the landlord and looked into management companies, in the end being 65 I decided to sell. It might be better financially to keep it, but the freedom it gives is worth it. The only reason to keep them is your age, rentals at your age are a great way to build wealth, its only on paper but it counts later. I do believe there is a age point where building wealth is no longer the primary thing, like me who at 65 decided i have enough to retire and decided to enjoy a stress free life. Now I only work to pay for my garage time and cars but soon wont work either.

 

[dcg9381]

I'd refinance and cash out the equity out of those and keep renting them. No taxes on that cash.

Have you looked at current interest rates? Let alone on investment properties... My guess is 8+% now on investments.
Many of us are "locked" to properties now. The market is down (harder to sell and off-peak pricing). Interest rates have doubled or more - even if we could sell, if we don't pay cash the same property value costs a lot more.

We've never owned a single rental property with 100% no late pays, but some of those investments doubled or more in value over 10 years...

As far as I'm concerned, there is no "right answer" here.

 

[evildky]

Have you looked at current interest rates? Let alone on investment properties... My guess is 8+% now on investments.
Many of us are "locked" to properties now. The market is down (harder to sell and off-peak pricing). Interest rates have doubled or more - even if we could sell, if we don't pay cash the same property value costs a lot more.

We've never owned a single rental property with 100% no late pays, but some of those investments doubled or more in value over 10 years...

As far as I'm concerned, there is no "right answer" here.

I closed a loan on investment properties about 30 days ago for 6%. It would be about 3/4 higher today. The banks are charging less arbitrage on portfolio loans as the demand has plummeted. The thing to keep in mind is all that interest you pay, is deductible anyway against the rent that would be taxed, you also reduce the taxable amount by depreciating the property. It's not for everyone but you cant beat real estate for wealth building.

 

[Youngandfree]

I closed a loan on investment properties about 30 days ago for 6%. It would be about 3/4 higher today. The banks are charging less arbitrage on portfolio loans as the demand has plummeted. The thing to keep in mind is all that interest you pay, is deductible anyway against the rent that would be taxed, you also reduce the taxable amount by depreciating the property. It's not for everyone but you cant beat real estate for wealth building.

And you still have a huge pile of cash that didn't get added to your income taxes. If there is that much equity like the OP says, then covering the higher interest amounts shouldn't be a problem.

 

[Youngandfree]

I purchased my current home in 2012. If I sold it today I would profit approx $250,000.

My end goal has always been rental properties and passive income. This is the only house we own. Our all in expenses are $1,100 but they are renting at $2,300, which is a nice chunk of change each month.

My dilemma is do we sell or do we hold the property as a rental? My other dilemma is if we do sell, I do not want to buy in this market. It seems counterproductive to sell a low risk property just to buy a high risk property.

We could live at my parents home for a year (it is their vacation home not their main home). But i would hate to go too long without a place of our own.

Would you sell and reinvest the profit or hold as a rental?

I'd hold the rental, cash out refi, and use that cash to use as down-payments and buy more. Cashing out that equity is tax free cash and keeps the monthly cash flow coming.

 

[ultravonder]

I sincerely appreciate everyone's input. I know it's been a few months since I posted this, but just wanted to give an update - I decided to sell the home I was occupying and keep the rental property as an investment. I took the proceeds from the sale (~ $200k) and will be closing on a small farm property tomorrow. There will be some renovation projects, but I am really looking forward to having a "real home" while still generating some rental income. I will manage my long-term tenants for the time being, as we have a good working relationship even with some distance. Now on to planning renovations and a garage build!

 

[HoosierMark]

FYI I sold a rental property in 2021 and showed a significant income last year of let's say $300K. Recently we got our medicare notice that our supplemental insurance cost was going up about $7,000 for the year. We appealed it and because it was an income property and we provided the paperwork they cancelled the increase. Bottom line is if you sell income property or stocks talk to social security about it.

 

[loganb]

I sincerely appreciate everyone's input. I know it's been a few months since I posted this, but just wanted to give an update - I decided to sell the home I was occupying and keep the rental property as an investment. I took the proceeds from the sale (~ $200k) and will be closing on a small farm property tomorrow. There will be some renovation projects, but I am really looking forward to having a "real home" while still generating some rental income. I will manage my long-term tenants for the time being, as we have a good working relationship even with some distance. Now on to planning renovations and a garage build!

Congrats!

 

[Old Man Roger]

FYI I sold a rental property in 2021 and showed a significant income last year of let's say $300K. Recently we got our medicare notice that our supplemental insurance cost was going up about $7,000 for the year. We appealed it and because it was an income property and we provided the paperwork they cancelled the increase. Bottom line is if you sell income property or stocks talk to social security about it.

And even a tax exempt capital gain will effect ACA subsidies.

 

[psiv92]

I sincerely appreciate everyone's input. I know it's been a few months since I posted this, but just wanted to give an update - I decided to sell the home I was occupying and keep the rental property as an investment. I took the proceeds from the sale (~ $200k) and will be closing on a small farm property tomorrow. There will be some renovation projects, but I am really looking forward to having a "real home" while still generating some rental income. I will manage my long-term tenants for the time being, as we have a good working relationship even with some distance. Now on to planning renovations and a garage build!

Congrats! If you haven't already looked into it, there's quite a few software platforms that you can use as a complete interface between you and your tenants. Instead of dealing with phone calls and stuff the tenants can put in maintenance requests via an app or web portal and you just get an alert. It might take away some headache from managing it.

Good luck!

 

[Shocker]

Hey @ultravonder , glad you are keeping the rental. I am curious where it is located, size, amenities etc.

I invest in real estate. Specifically a vacation rental and we are doing quite well with it. No way I would sell it as I couldn't replace them with anything that cash flows as much as ours does. Even though it is worth roughly 3x what we paid for it. It is a lake front place in Idaho.

 

[Mainiac Mat]

The housing market is tanking fast and we are likely on the cusp of a very significant recession.

If you're going to sell, sell fast. It may already be to late.

 

[Hobby_Man22]

You aren't making much off these properties. I'd sell and invest in a cd.

 

[Hobby_Man22]

"stress" ... hard one to define. Another is "risk tolerance". As I got older it was clear to me that I was able to handle a fair amount of the first and I was at least moderately high on anyones scale of the second. That said ... I hated getting new tenants and any phone call drove me nuts --- not what they were calling about. I work for myself ... so any thing that changes my plans drives me nuts. I learned early on that being able to have rentals in my life -- I needed to figure out how best to have them on some sort of auto pilot. This does not maximize profit ... the guys I knew who made the most owned student housing, multi family and singles/ multifamily rentals in lower income areas. All required way too much input for me .... I'm on the golf course Saturday morning.

I also started early with a heloc checking ... I used the heloc as a bank. I got it to pay off a high mortgage on one of the properties (rates were high years ago and are always higher for a rental buy) -- once opened it was used to pay all the bills. All the rent payments went into the Heloc -- it smoothed everything out. I never worried about the balance -- property A need a roof .... heloc. B needs something .... heloc. Overtime the balance is falling ... no stress. There are lots of small thing that you can do to make things easier .... they all tend to lower income.

my goal was nice properties later in life for retirement -- that others paid for

I think having a wife would be way more stressful than a rental.

 

[Blk88GT]

I think having a wife would be way more stressful than a rental.

The rentals go home in the morning though.

 

[Metal-Marc]

Thanks in advance for any help!

Thanks!

But I'm not giving you the push you want...

 

[NUTTSGT]

Resolved and spammer banned.