May be some viability in this strategy but it is also taking "leverage" to very high levels. RE tanks or economy goes into slowdown and you are talking several months of vacant properties.
Also in real estate ownership one does not know the "invisible expenses" that are incurred while running the ops. Worst invisible expense is the "mental stress" (bad tenants, bad property needing repairs, property management issues like corrupt condo management etc.) which creates inefficiencies in other areas of life like main profession, family life etc.
Would prefer REITs invested via tax free accounts.
If I had to do over again and knowing after so much time invested in learning to trade commodities profitable, I would have done real estate in different way. But being that a relative did real estate, gave me start up monies and ton of his experience, it was no brainer to buy in certain ways. But no matter how much you plan, problems occur as you wrote and some months I was handing over my gov't checks to mortgage companies. I specialized after that and stopped buying middle income homes and stayed in lower mid income to higher low income and seldom had problems as I once started. You learn eating beans no fun. I always bought properties as if I was going to move into them one day, so unless it was close to free, didn't buy major stressed homes or gang land areas. But at the time I was putting down $5500 and good 8 years before attempting to learn day trading, seemed to be the thing to do. I grew up with relatives who for most part were craftsmen of home building, worked my rump off for free for them to learn how to do for myself. Education is seldom free. Worst deal I ever done was buying 160 unit apartment complex, was so happy I was getting huge discount, then 911 happened and 90% of tenants went to war, never dawned on me they could leave when they got orders. Went to the bank that held the mortgage and they certainly didn't want it so they worked with me, by then I had many other properties and solid relationship with them. Two years later found a buyer, and basically lost, another lesson, you find your niche, stick to it.
I never "earned" while owning them, depreciation certainly helps so you can breakeven till they get paid off, but at some point, you can't depreciate land value and inflation the rents don't go up as much as you like them to be. Being I reside in city with huge military bases, always shortages of homes, which has even larger shortage of HUD quality homes, houses seldom vacant. You have to know so much like in trading.
As far as Quality of life, grew up certain way and that was always be working, divorced long ago, can't have kids, no siblings and parents past long ago. Not happy unless I am working, and most of the time, most consider me to the biggest asshole around cause look at value differently than most, seldom ever going to overpay, believe in balance but won't cheat anyone on purpose/make it right if done without knowing. Those who have worked for me either quit and say I am an a-hole and if they worked hard I give them very good references. Not here to be a fucking friend, it is business like anything. You don't like me, am glad.
And if tenant asks for copy of lease, most states require owner to give them a copy.
