"Hobby" investors

[John K.]

I'm always curious what kind of tips/strategies people have who do income real estate rentals as a hobby, by hobby I mean you have a full time day job, and you do it on the side. How many can someone successfully manage while keeping a day job?

[Jon Holdman]

I wouldn't consider owning rentals a "hobby" any more than I would owning stocks and bonds.

My estimate is a rental property takes about 20 hours per year. The bulk of that, over half, is in dealing with a turnover. Most of the rest is the annual accounting to get info together for the CPA. I'd say when you hit about a dozen, you'd be dealing with a turnover all the time. Even though most phone calls take only a couple of minutes, its a lot of interruptions. I only do showings once a week, and give everyone the same time. But it often takes several showings to get a tenant. So you would be showing almost every weekend.

A PM will charge you 10% plus half a month for a turnover (14% with one turnover per year), that's $1680 on a $1000/month rental. For 20 hours work that works out to $84 an hour. I'll put in the 20 hours.