For this topic I will be posting a month by month exposé if you will of what it takes to run–and the intestinal fortitude required to maintain a rental property, or portfolio of properties.
I’ll also give you and idea of the income generated, gross and net so you can get a realistic view of what one might expect with a buy and hold strategy.
I have been buying in rougher areas. Not war zones or anything close. But areas where management is a little more hands on, exciting, and the returns are higher–but so is the risk.
You’ll see plenty of that. It also makes for some pretty good stories along the way.
I feel it is here, I can also make a difference, for now. Tenants tend to like me, and will share the details of their life and use me as a bit of a social worker at times, good or bad.
I also take care of my tenants. I don’t do slum-lording, nor do I tolerate the people who do. You deserve the opportunity to make some money when you invest, but never forget, it’s people you are dealing with.
Losses come with all investments. You take them in stride, and move to improve.
BUY AND HOLD STRATEGY
My strategy is comparable to a typical stock portfolio. But with strippers, meth, guns and a ton of other fun crap thrown into the fray.
Go hard and fast for decent cash flow early. Buy on discount, in up and coming areas preferably–or areas that have a strong economic base.
Build up equity with the debt pay down, and trade up for “better” properties that can eventually be handed off to a property manager for truly passive income.
The “improved areas” will also allow for potential additional long term income through appreciation.
Though that is never factored in.
There are also the numerous tax benefits with real estate that don’t exist anywhere else.
Eventually, the idea is to sell them all off for a more liquid asset, hopefully during a bull housing market.
If not, the rental market will still be strong, and I’ll wait.
Don’t be confused, I provide great, safe, affordable housing. I tend to over improve properties far beyond tenant expectations, but I do it smart…at least I think I do.
I take pride in that. It’s not all about money.
You know you’ve over improved and impressed when a potential tenant will rip the top off a pizza box to give you their info, in hopes of securing a unit. The things that end up impressing are often inexpensive little upgrades.
I also keep my income streams diversified through other investments and opportunities, but real estate is a real game changer if you do it right.
You be the judge.
’Exposed’ Blog Post Brew?
Duvel. A strong blonde, golden pale ale, with good ABV. We might as well be sipping the good stuff–times could be lean ahead…