Book Review: Building Wealth One House at a Time

Over the last couple of days I read the book "Building Wealth One House at a Time" by John Schaub.  I can most accurately sum up this book in the phrase "common sense".

There's a lot of common sense advice in this book.  I really like how the author laid out the book.  In it, he describes how you can get rich slowly even by buying at retail prices (although when you become a more savvy investor, you will want to buy at least 10% below retail).  Personally, I like to buy for as little as possible, in the best neighborhoods I can with the money I can afford to spend.  It's definitely a delicate mix.

"Even an empty house can make you money.  It will appreciate as much as a full one." This is true, but an empty house also costs you money, and depending on the expenses you have, it may cost you more than appreciation (depending on how fast it is appreciating).

"It will take 14.4 years for a house that increases in value at the rate of 5 percent a year to double in value."  If you're looking for appreciation, you can look back in time and chart trends on appreciation rates in your area.

The author speaks about buying the right house in the right neighborhood that's the right size.  "The overwhelming majority of home buyers prefer at least a three-bedroom, two-bath house.  Renters have the same preferences."  This is okay if you can get homes like that in your area.  In my area, the majority of homes have just one bathroom, and sometimes you can get homes that have 1.5 bathrooms (my own home has 1.5 bathrooms and I rarely use the half bath). Even 4 bedroom homes in my area have 1 bathroom at times.  So you do have to look at the market you're in.  If all homes are like this, then people won't be expecting much else.

The author talks a bit about how to find good deals, and how to afford them.  He is somewhat against owning property out of state.  Chapter 19 talks about why he feels that owning property out of state is a mistake (mostly because you worry about the properties too much). This may have been his personal experience as he owned property in 10 states and sounded like he worried about them a lot.  I say, if you are going to worry about owning property that isn't local to you, then don't do it.  If you have a team that you can trust and who can take care of things for you, then by all means, do it.

His list of steps to get a house rent-ready are also common sense.  At the very top of the list is "get the property clean and in good repair".  There are so many times when people come to my open house showings and remark about how nice the place smells, and how clean it is.  That tells me that this is different from what they are seeing in the market.  If I'm differentiating myself by that one small thing, that means it makes it easy for me to rent my places out.

SO KEY:  "When the rental market is soft, lower your rent, not your standards."  If you rent to people who can pay the money up front, but they've had evictions, then you have problem tenants with money. The problems are less likely to go away than the money is.  Money can go very quickly!

There was only one thing I didn't agree with the author on in the book.  He believes in allowing people to get a key from you (or a lockbox code) and view the property themselves.  I will never agree to that.  I want to personally meet the people that are interested, and I want to be around when they tour the place to answer questions and explain more about the property.

So I would give this book an A rating.