Best way for $4K rental income a month that is mostly hands off?

[Cole Evans]

What is the best way to earn $4K of rental income a month that is as ‘hands-off’ as possible?

I live in the UK, approaching 70 and have £200K ($260K) to invest.

I am no stranger to being a landlord and have two properties that I rent out already. I could probably sell these to increase my amount to invest to £500K ($660K). I just want a solution that is as hands off as possible and can generate $4K a month in rental profit.

I’ve been looking at properties in the UK, but they either tend to be quite expensive or generate low rents. Would I be better be looking of in the USA or another country? If so which areas?

I have a secondary goal of retiring in the USA, although I am not sure how feasible that would be as I don’t have US citizenship. I know there are schemes where investing $500K in real estate projects can provide a green card, but they don’t seem to generate $4K a month in income.

I would appreciate any input or ideas just to get started with some inspiration so I know where to get started with looking. Thanks!

[Chris Grenier]

Hi Cole that is certainly one broad question! 

Well to keep a broad answer, in America (most major metro areas) the rule of thumb is 1% of property price is the rental goal. So hypothetically $260K would get $2,600/month rent. (that is factoring in no mortgage or leveraging the funds). 

In certain areas like Detroit, Buffalo, Cleveland, rent vs. property price is much higher but it is a totally different ballgame. 

The simple answer would be to find a reputable turn-key provider and then leverage the properties once acquired! 

P.S. I use to live in Kettering (North Hamptonshire), so very familiar working with UK Investors, any questions let me know! 

[Aaron Mazzrillo]

Buy a NNN leased small commercial property. Something like a Wienerschnitzel or small strip mall. There is a really active commercial broker on this site, but I forget his name at the moment. I bet he can find you something.

[Steve Vaughan]

I don't think even d- areas in the midwest could provide $4k net rental income (profit, right?) with $260k.  

Do you plan on using debt? Is $260 the down payment on say, a $750k asset?

I can get $4k/mo net on 2 of my smaller apt buildings, but that would be closer to $750k if I was motivated to sell.    

I remember someone looking for $2k net per month on a $200k hard investment (no debt) in Seattle.  The answer was to lower expectations to reality or play 10 perfect hands in a row of blackjack or 10 perfect futures contracts in the market.  Slim chance, basically.

I don't think $4k net is possible on $260k without good leverage/financing @Cole Evans

[Michael J.]

This is a very generic rough answer but if you want $4k profit you need to hit at least ~$8k of rent coming in.

If you have $660k and pay all cash for a SFH $50k and it rents for $850 a month. That would very roughly give you $400-$425 Of profit, if there is no mortgage, per house or about $5200 a month for 13 houses at $400 actual profit a month.

Of course the area is important but there are plenty of decent cities in the USA you can get similar numbers. Having a GOOD PM lined up would be imperative. Numbers like this would most likely be marketing for deals and value adding. I don’t think you could get turn key properties with these numbers so it may violate the hands off rule but at least the potential is there with some of front work.

Whatever you do don’t get caught with your capex pants down and think most of the rent is profit 😬

[Cole Evans]

Thanks for all the help. It seems doable, and it looks like both turn-key and commercial are areas worth considering. But the USA is so vast. What's a good way to find a good region to start researching?