All Forum Posts by: Account Closed

Thanks for all your great responses! This is a nice community.

@Philip: What do you mean by "a couple of years until your llc can use the rental income?" Are you saying my goal should be to buy more properties, so I should not touch the income? Or are you saying I can't use the income for some other reason?

Also, if I have multiple tenants in one property, what is the increased danger versus multiple properties with one tenant each? All I can think of is disasters or defects with the property that I'd seek insurance against.

@Rebecca: When you say to "seek out other landlords in your area," do you mean to invest in, or to get advice from? What are some examples of the "lots of problems" you're thinking of?

@Dawn: I've definitely calculated the returns, given the prices on houses in the area and the average room rents on Craigslist for the same area. It's substantial, but I'd rather not get into specifics.

@Ewa: I may borrow to buy more houses at some future point, but I want to have the confidence of managing one property successfully before doubling or tripling the work and being in debt to lenders.

@Sam: Thanks for that. Yes, I'm willing to do those things. This makes me more confident that I can succeed.

I've made enough money to buy a large multiplex house with lots of bedrooms. It's actually not that much, since I've found an area where housing prices are low and monthly rents are high. I want to rent out individual rooms, since the going rates for individual rooms here adds up to more than renting out the entire unit. I would be able to live off the monthly rents.

I know there are risks, and there is work involved, but all in all, the risks seem less and the dividends greater than securities investing (even with REITs), the work (and risks) seem less than starting other kinds of businesses, and the returns are definitely greater than with a guaranteed interest product like a treasury bond or CD.

Also, in my experience, every landlord I know who owned houses and rented out rooms, continued to make money throughout the recession. Maybe a tenant lost their job and had to be replaced, maybe a tenant was late with payments, but the landlord never lost any money. At worst, they made less money for a time, but they were still getting checks coming in every month, and their expenses continued to be minimal, so their profits remained high. (They owned their properties outright, as I will.) Sure, it's possible that housing prices could be down many years from now when I want to sell, but that won't affect my monthly income, and I will have made plenty of money off the house over my period of ownership, so it's not like a lower selling price will be a loss. Even if rental prices go down for some reason, I can live off less than what the current rents would be. And I'll have insurance and an LLC to protect me from liability.

So I just have to ask, am I overlooking something? Is there a different way I could make healthy, reliable returns that I should look at?