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August 13, 2011, 12:32:34 AM *
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Author Topic: rental real estate is for wealthy people?  (Read 58 times)
Warrior
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« on: July 21, 2011, 06:31:37 PM »

I watched tv shows where usually people rent their property over the mortgage payment,then the property pay itself but how hard is to accomplish this business in real life? investment properties

thank you
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Frankie_M
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« Reply #1 on: July 21, 2011, 09:53:08 PM »

You have to buy the property right. That means you have to find a bargain. Then it works real fine.
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Landlord
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« Reply #2 on: July 21, 2011, 10:58:29 PM »

That is what I do.    100% of my income is rent these days.
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Jose
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« Reply #3 on: July 22, 2011, 12:50:24 AM »

For the wealthy people? People who make 1million a year?

I had the similar question when I read at Forbes Magazine that a guy bought his first house for 10k in the 1950s and today that individual owns 44,000 apartments units,  40 million sq-ft commercial property,  3 resorts and much more.

During the last year I have heard that "right now is the best time to buy a house" and " do not buy, it is better to rent, wait 1-3 more years." It all depends in the market you want to buy. For example, I know an individual who bought a duplex (3bed 1bath each) in Palmdale, CA for 70k in 2009. Last month, I spoke to him and said that he is almost done paying the property (30k left). He hopes to pay the property by Feb or March of next year. If his plan goes like he wants---if none of the two units become vacant or if he does not have to make a costly repair-- he would probably be getting 0-$1500 (rent-property taxes, insurance, and repairs) of income each month.****


What I have heard from people is: Rental properties are an investment (bad outcomes or good outcomes). RESEARCH AND RESEARCH AND RESEARCH (Economy, rent prices, crime, development near property, etc.). PROS:Population growth and economy forecast=good long term investment (6-10 years). People lost their home and cannot buy right now and only option is to rent. Renting for some is more convenient. Because of the housing collapse many do not see buying a house as something good, so they will rent. Their is a lot of people wanting to rent=rents stable or going up in some areas. CONS: Hassle to manage. Lawsuits. Not always have units rented.

****0 if none of the units are rented in the month to $1500 if all the two units are rented. In a year if all the units are rented, that is $18000. That is a salary of a part-time or a full-time job (minimum wage).

Check the links below, LA Times recently had a good article on rental property.
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PoohBearPenguin
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« Reply #4 on: July 22, 2011, 01:19:45 AM »

In today's economy?  Not going to happen.

Back before the housing bubble burst and millions of houses went into foreclosure, what people would do is find houses that were owned by the bank and buy them for very low prices (compared to the neighborhood), maybe fix them up a little, and either resell them ("flip" the house) or rent it out.

However it's very risky, and some areas, like Las Vegas, had their housing market devastated due to real estate investors and would-be flippers who realized they would never make their money back on the investment, and so they simply walked away, abandoning the house.  Sure, their credit would take a hit, but it beat paying thousands of dollars into a mortgage on a property that would never make money.

Today with 1000s, even millions, of houses in foreclosure, housing values continue to drop.  That makes it good for people looking to buy a primary residence on the cheap, but lousy for real estate investors.  After all, why continue paying rent when for LESS money you could actually buy a house?
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