All Forum Posts by: Naveen kumar Vadlamudi

I've kicked the tires on a mid term rental in Champaign-Urbana, IL. I grew up in the area and know it well. Urbana has one of the only Level 1 trauma center hospitals in the state located outside of metro Chicago, the university is a source of furnished housing, and Champaign county is one of only a few counties in IL with a growing population. 

Taxes are high and the growth is pretty meager, but if are looking for a place sub $200k that has some real year 1 cash flow, it's not a terrible option. Take my half hearted investment for what it is - I ultimately decided not to invest there but can see the merits.

One more note from a guy that is financially independent. It's pretty unlikely that you'll hit FI in 5 years unless you have paid off properties. Even if you had a dozen mid term rentals in a cash flow market (which would probably be $2-3M of property), you're probably only going to net $4-5k/month hoping to avoid the big capex expense like a roof or furnace. The truth is that real estate doesn't pay you well when you need the money. It's like the properties know you depend on the cash flow and something breaks. The only real cash flow to live off of that I see is a short term rental purchased 2+ years ago, a long/mid term that has been owned for 5-10 years, or a paid off property.

It's still a worthwhile goal that you should pursue, and I don't know your starting point. I would, however, just urge you to lengthen your time horizon. Also, buy the properties that you would want to own the most 10 years from now...not the best year 1 cash flow performer.

@Naveen kumar Vadlamudi this thread on college rentals may be helpful:

Nearing 1,000 College Tenants - Here's What I've Learned