Posted by Madison on March 4, 2009
I got an email from an old business associate this week. It’s always nice to hear what people have been up to… and even more interesting when they have a personal finance idea to share. He’s a real estate investor, and it turns out he is looking to expand.
I’ve been interested in real estate, but more from the sidelines. I’ve never wanted to get into it myself because of the hassles. However, the idea of partnering with him has me considering it. We’re going to meet to talk about the idea soon.
In the meantime, I’m busy learning everything I can about real estate investing, starting with the Mr. Landlord free newsletter.
I’ve also been checking out many of the resources listed in 65+ Online Tools and Resources for Real Estate Investors. If you’re currently a landlord, or have considered it, I’d love to hear your thoughts!
I’ll keep you updated on the status of the business venture… now, on to the personal finance articles of the week!
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6 Comments
Thanks for the link!
I’d be very careful before getting into real estate investing. You need to make sure you’re financially secure, and that you’re ready to deal with the hassles – even as a secondary owner.
My father owned a piece of real estate with some friends, and it ended up being nothing but a nightmare. If you’re careful, it can be a good deal, but if not you can regret you ever got into it. Good luck!
I agree with the first comment – be very carful and understand what you are getting in to. You may have to spend time tracking down rent payments. You will get phone calls from your renters to fix things in the evenings and on weekends. Also, you can have problems with how renters treat your property.
My in-laws had several rental properties and you would not believe the way some people leave a rental unit when they move. Their nephew even stole their refrigerator when he moved out!
I’m a landlord. I own a 2 family where I live in one apartment and rent out the other. If I had it to do over again, I still would have bought a rental property, but I would have made sure the math worked better.
My site has a handful of articles about my experiences. Two pieces of advice:
1. Make sure that the mortgage is no greater than 60% of the expected rent.
2. On being a landlord: Ask yourself if you can stand toe to toe with another adult and say, “No.”
Thanks for the link, and I hope the list of resources was helpful. Investing in real estate can be scary, particularly at first. But if you don’t over-extend yourself and take it slow, it’s actually a lot of fun and, over time, very profitable.
I do not like to blatantly self promotion in a comments section, but if you go to my site, you will find posts on how to inspect investment properties and an ebook on that topic.
That being said, my experience has been that investors need to carefully examine a home, and plan out costs. I see renters of homes becoming more discerning, acting like they are owners, so they want a “perfect” home. No home is perfect, so the investor has to be a good communicator when dealing with them and the repairs. The other big concern where I see some RE investors failing is to keep up with the current laws dealing with landlords/renter’s rights. Many states are doing what I see here in Texas, implement laws to clearly define the relationship between renter and landlord and what is required in the home. States seem to be rushing more of this legislation through their congresses since they see more people becoming renters, and they do not want to see their constituents having problems do to this increase.
Thanks for the link, and I hope the list of resources was helpful.