How much is enough?

Question

I know this question is subject to way too many things to actually answer but philosophically, how much is enough? I read posts and watch videos of people always searching for the next big deal. Some talk about 30 units or 120 units or 250 units in their portfolio. I guess I’m less driven in this seemingly endless cycle. I’m 43, my wife is 38. We are focused on our retirement and our three young children’s futures. Where we live, $100k annual income is upper middle class. Our goal is to own (paid off) between $2m and $3m in rental property in 15-20 years. To live within our means but comfortably till then. To retire with approximately $100k in annual (net) revenue from rentals. That allows us to enjoy retirement, help our kids with college and give them an inheritance after we are gone. So for us, we probably need 20-25 units to reach that $2m-$3m Mark. Is there a reason to own more? Is there a greater practical benefit to owning more and more (other than just having a bigger business)? Just considering the balance of real life and free time and stress and long term potential risk of owning 50 or 100 or 250 units. How much is enough?

Daniel Haberkost · Answer

@Joseph Niedermeyer this is entirely based on what you’re looking to get out of it. Your goal sounds fairly on target for what you are looking for.

Many of the people who keep going well after they are financially free do so because they enjoy it. Some of the most successful investors I know who have no need to work but still buy deals are just enjoying the process/hunting for good deals.

I wouldn’t worry too much about what anyone else is doing and just focus on achieving your “why”. Just my $0.02

-Dan

John Warren · Answer

@Joseph Niedermeyer I think you are thinking the right thoughts, and these are the thoughts that many of us have. The only thing to consider with owning 30 units is that you then have to manage 30 apartments. Economies of scale sometimes push people to own more so that they can afford to do less. I know I personally would prefer to own 300 units that are professionally managed with on site management as opposed to 30 units free and clear that I have to manage.

I do think at some point enough is enough though. There is no reason, other than if you enjoy it, to continue pushing once you reach a certain level of income/net worth. There is very little benefit to being worth 100 million as compared to 5 million if you have normal desires. in life.

How much is enough?

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