Look up bigger pockets they have a ton of podcasts you can/should listen to. Start with the older ones, the show is going through changes currently but it’s still a great resource in general.Thanks for the awesome post! I have some questions here:
I just turned 34 and make about 298K, I have a regular full time job and plan to go back to school for better income in the future. I never spent much time studying rental property as a method of investment mainly because I am afraid of all the "hidden cost" that will eventually turn the investment into a loss. (Tenants, lawsuit, maintenance cost etc). I am mostly doing stock and retirement saving, and so far I am doing reasonably well. I don't have debt except for mortgage and I tightly restrict my monthly cost to about 4K/month (food, mortgage, tax etc. included). This hobby probably costs me 10-20K a year.
Do you think the time for this rental property investment thing has passed? I also thought about the vending machine idea, but I have heard mixed reviews about doing that. For an average Joe like me, what are some of the online information sources that you think would be solid?
The former hosts of their main/original podcast has his own posxast now, better life with branden turner. The other host is David Greene, I don’t know the name of his show off the top of my head, those two are great resources as well.
You said household income, that implies that you are married, would you be doing this with your wife? Or separately. Do you have kids or plan to have kids? That’s a big expense if you are. If you have 300k a year you have plenty of income.to get started. Investing in stocks and retirement is ok to a point, but it’s always good to diversify and cover yourself incase shit hits the fan with one invested stream you still have others
And to answer your question, NO, it’s not too late. It’s always the right time to invest in real estate, but what changes is how you invest and what are your goals.
Do you want monthly cash flow, or do you want long term appreciation? Maybe a split of both.
If you invest in an expensive growing market you might with a minimal down payment on a million dollar home like the Bay Area, you might only make a hundred bucks a month after your expenses and cap ex(money set aside for repairs and maintenance like roofs hvac and water heaters that all eventually meet to be replaced ) but in 15-20 years your property values might double, or triple. On the other side of you but a 100k house in the Midwest, in a small town without much growth potential you will
Likely see more cash flow monthly but less long term appreciation .
Real estate is a numbers game if you have the money to put a larger down payment, you will see higher cash flow due to the lower mortgage cost. If you can’t put much cash down, your play is equity building and appreciation. The point is to make the numbers work for you.
100k tired up in a 300k house is a pretty safe place to park some money and if you can get 10% return you’re usually beating the market if you just have that money sitting in a mutual fund.
I’m not going to get into remodeling and arvs and flipping but if you can find a property that needs some tlc you’ll get a better deal and you can build equity by upgrading the property.
Also you need to remember rates change when and you can always refinance when they go down, that will just increase your cash flow so if it works now at 7% it will just be better for you at 5%
worst case, if your never refi, rents will still go up and your cost generally stays the same unless you refi or pull equity.
But if you do the number right, and your mortgage, property management cost and cap ex saving add up to 1000 dollars a month and you can rent the property for 1050 a month, that’s a win. Not a home run, not life changing, but it’s a win and in 5 years time after you’ve increased rent 10% per year( less if you wanna be nice but 10 is the standard, I do 5) you’ll see the benefits of the investment start to snowball, especially as you add more properties to your portfolio, and if that property value goes from 100k to 150k over the same time, you have equity in that property where you can refi, or pull a helco and use that equity to fund more properties and investments
Vending machines ect take time and are not passive, but it’s a great way to start if you don’t have the money to buy real estate, I bought mine during Covid, I knew a old guy who had 50 of them and just wanted to cash out when they were sitting empty so I kinda lucked into that one. But you need a location that’s the tricky part. But if you can find a location and have the time and energy to hustle, you can start making some extra cash to eventually move into other investments
