Originally posted by @Yoni Weisbrod:
Originally posted by @Ian Walsh:
I have actually found that people with normal incomes seem to be at the most risk when they have between 3-6 properties. People that own 15+ tend to have less risk if they purchased correctly. This isn't risk relative to the market, because I am assuming that the person purchasing buys low enough where cash flow would be safe even in a market dip. This is for people that have normal income rates and run into 2-3 evictions at one time when only owning 4-6 properties. The turn overs and evictions seem to be too much for these people and there aren't enough properties cash flowing to offset the financial burden. This is just my observation.
Wouldn't owning 15+ homes just increase the risk of evictions proportionally?
As you increase volume the results become more predictable. More predictable means less risk while maintaining the same returns. Or even better returns because you have scale and can use that scale to get discounts (buying in bulk, full time staff, etc) and run your business properly. Lots of landlords out there with 5 units and do a half assed job about it. But if you have 100 units you can properly manage this or negotiate a management fee much lower then the guy with 5 units.
So since its compounding returns as you expand and grow, even a few % here and there adds up to a large amount over time.
