so WHY real estate after all?

[Mary Joe]

This post is not about creative real estate deals. I am the conventional "BUY HOLD RENT IT OUT" long term investor.

I am terrified after reading the PROFESSIONAL TENANT FROM HELL sticky post. And on top of that, the 50% rule (which from my experience is very true) plus the hard labor that you need to put in dealing with tenants, is it still worthwhile to get into real estate investments?

I am new here, please correct me if I am wrong. My understanding is that the 50% rule doesn't even include mortgage. So for those who do not own the rental property outright, there will be ZERO left for the landlord after making the monthly mortgage payment.

Since most people have a 15-30 year mortgage, that means most landlords will be working for FREE for 15-30 years before they start seeing some NET PROFITS on the rental ppty. In other words, all that landlords can hope for is pretty much capital appreciation after 15-30 years of hard labor.

If that is the case, wouldn't it be easier to just put the money in REITS and earn 2-3% a year?

BTW, the PROFESSIONAL TENANT FROM HELL stick post is really frightening. I read all the posts in that thread but I do not see a lot of recommendations as to how a landlord can preempt something like that from happening or how to cut the losses promptly.

I could only find 2 recommendations from comments in that thread:

1) do a better job screening the tenant - yes I agree.

2) take photos of the conditions of the ppty before tenant moves in. Well this is fine in most instances, but when dealing with a professional tenant, I am not sure how this is going to help. It sounds like if the tenant knows how to abuse the legal system, he can drag you through the mud for years before you even get to present the photo evidence to the judge.

It sounds like landlords are pretty much at the mercy of the professional tenants if they are unlucky enough to be stuck with one.

So am I missing something? Why are people still so enthusiastic about becoming a real estate investor or landlord? Are there other passive or semi passive investment options out there?

The reason I look into real estate is that I know I can't work forever, there will be a time when I am unable to work and will need to rely on some kind of passive income to support myself. But one bad tenant can wipe out everything you have worked so hard for. Are there other passive or semi passive investment options out there besides real estate?