Owning residential rental property and self manage?
Major apartment developer: 'There is an acute crisis headed our way' say it ain't so...
- Thread starter S2007S
- Start date
Self manage is similar to running a small business and/or doing full time job. Risk profiles are also different. Leverage ratio is also lot higher and has unsystematic risk than total stock market.
Self managed investment properties are not a passive investment they are comparing to like total stock market, Treasury bonds and bills.
Absolutely false.
I’ve had multiple rental properties for the last 6 years.
A beach bungalow 3 beds/1bath first house off the beach that rented weekly from Memorial Day- Mid September then became a seasonal “winter rental” from Oct-Apr.
In 5 summers I had to go to the property a total of 4 times. Zero in the winter (except the winter I had the bathroom and kitchen upgraded before I put it on the market. Stopped in maybe three times).
All rentals were done online through VRBO, prepaid with deposit to cover damages that I would return (never had to keep a dollar).
My cleaning lady would leave a key for them in a spot on the porch. Never once had an issue (I would only rent to families, NEVER to a group of 20-something’s like so many other beach houses would do).
Another yearly rental 4 beds/2 baths I’ve been to exactly twice in three years. Once because the tenant’s were away and I was having a new refrigerator delivered, once for a leak in the ceiling that my handyman took care of.
Another yearly place 3 bed/2bath was the only exception. My first time being a landlord- I didn’t properly vet the tenant and she turned out to be a pain in the ass deadbeat.
Got her out and the new people who have been there (in their third year now) are fantastic. Had to go there once this past January when the heating unit was on its last legs during that crazy cold snap in the NE in early January.
All my properties are within 10 minutes of my home and I have a fantastic retired GC who does any handyman work that I need.
Believe me, I know there are horror stories about being a landlord. But after my first tenant I learned to properly vet applicants and hold out for well qualified tenants.
I get paid by check or cash on time and in full, have had as close to full occupancy as you can hope for, no major issues, and the properties have all appreciated nicely.
Been some of the best investments I’ve done and mostly passive IMO.
Buying solid properties, keeping them in good condition, having a trustworthy handyman, and GETTING GOOD SOLID HARDWORKING TENANTS are the keys to making landlording a passive business and not a part time job.
You are also saying same thing. It is full time job, it is different than investing in passive stock market index or buying treasury bonds.
I didn't say owning investment property is a bad investment, but i am arguing whether it is passive investment and definitely it does not archive half the volatility as stock market index.
I also talk from experience. I own two residential investment in city center and am partner in commercial real estate properties.
Here are the residential real estate companies which manage apartments. Look at their volatility, it is certainly more than stock market index.
That’s the exact opposite of what I wrote.
I doubt I spend the equivalent of one full workday throughtout the YEAR on my properties COMBINED.
Re-read what I wrote
Comparing being an owner/landlord of a handful of single family rental homes and apartment REITS is like comparing apples and oranges.