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Updated about 14 years ago on . Most recent reply

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Paigow Chan
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$30,000 saving

Paigow Chan
Posted

We bought a North Las Vegas house for $270,000 in 2005 and the plan is to move there 10+ years later to retire.
But like the most of Americans that we just glad we still have job now and have to delay our retirement.
The house in Las Vegas only worths about $100,000 now.
With the current rent that we still need to put out $400+ to cover the mortgage.
Not to mention the months we couldn't find the tenant and the money we spent to fix the damage from previous tenants.
That house is like a black hole to drain our saving and will be continue for many years.
We won't walk away from this property, no short sale nor foreclosure, as long as we can cover the lose.
I currently have almost additional $30,000 saving and am thinking to buy another house in Las Vegas, and hope to balance out our lost.
I mean with the low interest rate (may not really low for investment property) and low home price, we can get positive rental income to cover the rental from another property, but I understand there will be risk when we cannot find a tenant.

My questions are:

(1) Do you think if this is a good idea?
(2) Is anyone familiar with Las Vegas housing market? Is 2011 a good time to buy?
(3) Can I find a house with $150,000 ($30,000 down payment) in a good location, then rent it out for $1,100?
The house we may stay after 10 years. I always dream to have a house in the hillside to overlook the lights in Las Vegas Strip.
(4) How is the rental market in Las Vegas?
(5) Do we plan too early for our retirement? Should we invest $30,000 in some where else (where?) to get a better return?

Thanks.

Most Popular Reply

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Mike McKinzie
  • Investor
  • Westminster, CO
1,197
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Mike McKinzie
  • Investor
  • Westminster, CO
Replied

Andy

Another person afraid of "long distance" land lording. Why? Owning rental property is not a hobby that you need to attend to on a continuing basis.

I own 30 properties across six states, Virginia, Colorado, Texas, Oklahoma, Arizona and California. The very LAST thing I want to look at is a house I own or the tenant living in it. I have owned houses for 20 years and never seen them or talked to the tenant.

I remember a seminar I went to decades ago and the speaker said that he had known real estate investors who drive by their rental property EVERY DAY and brag to themselves that they OWN that house. They treat it like it is one of their children. BIG MISTAKE.

My time is better spent taking my wife out on a date, playing with my children or enjoying a real hobby versus showing property to a prospective tenant, unclogging a toilet or doing a lockout.

I used to manage my properties and other people's properties. I had a 2 year old drown in a pool of a house I managed. I had tenants growing pot in the backyard. I had a husband murder a wife in one of my rentals. I have had to take the GARDEN HOSE into one of my rentals to wash it out. I have pulled down wallpaper and had live Cockroaches rain down on my head. I have had to let the DEA into a rental I was managing, via a search warrant. Etc., Etc., Etc.,.... You name it in land lording and I have probably been through it.

I have the knowledge, experience, intelligence and ability to manage my properties, but I don't LIKE TO DO IT. Just a couple of months ago, I had a tenant go around my Property Manager, call me and complain about a rent raise. I told her that if she didn't like the rent raise, she was free to move. I then immediately called my Property Management Company and told them what happened and that I did not want it to happen again. I told my PM company to tell the tenant that if they call me again, their rent will be DOUBLED. The tenant has not called back.

I have said it before and I will say it again. Having all your rentals in one market would be like having all your 401K invested in Enron.

Diversification is a powerful tool to help with your real estate investing. While I agree flipping is better when it is local to you, long term investments can be spread out so you can take advantage of multiple markets.

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