MGH PA
Gold Member
I've been toying with the idea of picking up a rental property as a long term (i.e. 15-20 yr) investment. I'm 31, I have good job with a pension plan, plus I've been contributing to a TSA since I was 22. My wife has a great job and we've been putting 9% into a 401K for the last 8 years as well. I don't feel like I really NEED more diversification, but I think it can't hurt. My dad doesn't like rentals, and many people I know recommend to stay away from them unless you can afford to pick up 5+ to make the cash flow offset potential vacancies or major repair issues.
I would be primarily doing this for equity building, but would still want to maintain positive cash flow as much as possible. I would only buy on a 10yr note, so I would be paying it off 10 years before retirement at which point I would have even more cash flow and equity building, or I could just sell. If the first rental worked out well for a while, I might even consider building onto that.
I would be focusing only local, and I'm handy enough to do most repairs, but of course emergency repairs and big list items would have to be hired out.
I would form an LLC to keep my personal liability to a minimum as well as allowing me to maintain a separate savings for repairs/vacancies.
So, those with rental experience, if you didn't really NEED the extra investment, is it worth the hassle? I know tenant screening and tenant laws really drive a lot of the major factor in people's experiences (as does the location of your rentals).
I would be primarily doing this for equity building, but would still want to maintain positive cash flow as much as possible. I would only buy on a 10yr note, so I would be paying it off 10 years before retirement at which point I would have even more cash flow and equity building, or I could just sell. If the first rental worked out well for a while, I might even consider building onto that.
I would be focusing only local, and I'm handy enough to do most repairs, but of course emergency repairs and big list items would have to be hired out.
I would form an LLC to keep my personal liability to a minimum as well as allowing me to maintain a separate savings for repairs/vacancies.
So, those with rental experience, if you didn't really NEED the extra investment, is it worth the hassle? I know tenant screening and tenant laws really drive a lot of the major factor in people's experiences (as does the location of your rentals).