G
Guest6814
Guest
Hello Everybody,
I'm seeking advice from those who may have more experience in this area or have already addressed this question.
Here is a brief introduction. While working a professional day job and looking to expand my family's means, I got into writing/self-publishing as a potential Fastlane business. It has grown somewhat, and has scaled up just a bit over the years. At the same time, my wife and I were carrying out an unwitting Fastlane business: real estate. We owned a home that kept increasing in value, despite being a money pit for us. After years of struggling with our property taxes, roof damage, plumbing repairs, rats, and things that kept breaking down in a 90+-year-old house, we recently sold it. After the escrow closed, we paid off credit card debts and other debts, and are now sitting on a nice, tidy sum.
In a short time, my wife and I catapulted from a struggle to a much greater degree of material ease. Though not quite at $1,000,000, we are closer to that level than ever before. Now, when we need simple things like new shoes towels, we can actually afford them. Obviously, letting our money just sit in a savings account indefinitely is not a great idea, so we're looking into better options. The material that @MJ DeMarco provided in UNSCRIPTED is great information. We're also considering real estate as a possibility.
We have learned of an opportunity to purchase investment property in another city, where housing is a lot cheaper than in our city. For a pretty small percentage of our current savings, we can buy a house in the other city - with no mortgage - and charge tenants around $1,000-$2,000 per month in rent. Presumably, a property management company would take care of maintenance issues, so we would have to pay them something. Still, we may take in $500 or $600/month in profit.
The questions are:
1. Is it worth the investment, or is it a better idea to focus on market investment (ETFs or other products)?
2. If it's worth the investment, then what percentage of investment do we place into markets and what fraction goes into real estate? Maybe two or three houses would be a good idea.
3. Is it smart to purchase real estate in a distant location, sight unseen?
A possible risk factor may be the difficulty in getting tenants. I have no knowledge of the real estate supply vs. demand in the other city, and it would be a shame to drop $100,000 for a house that nobody occupies. On the other hand, maybe there is a high demand for housing in the other city, and finding tenants will be no problem.
I'm also skittish about real estate investment for rental income, because my parents tried it around 30 years ago, and were cheated. Their tenants didn't like the idea of paying rent, and the local regulations favored tenants; in the end, it was a losing proposition. However, the circumstances in this case may be more favorable.
Lastly, how has the C0VlD-19 epidemic impacted the real estate market? Are people still interested in initiating new rentals?
Please forgive the novice nature of this post and the questions. I am new to possessing wealth at this scale, and new to investing in a serious way. If you have experience in this area, and can provide some insight or advice, please reply. I would appreciate any information that can help us make the best decision.
Thank you.
I'm seeking advice from those who may have more experience in this area or have already addressed this question.
Here is a brief introduction. While working a professional day job and looking to expand my family's means, I got into writing/self-publishing as a potential Fastlane business. It has grown somewhat, and has scaled up just a bit over the years. At the same time, my wife and I were carrying out an unwitting Fastlane business: real estate. We owned a home that kept increasing in value, despite being a money pit for us. After years of struggling with our property taxes, roof damage, plumbing repairs, rats, and things that kept breaking down in a 90+-year-old house, we recently sold it. After the escrow closed, we paid off credit card debts and other debts, and are now sitting on a nice, tidy sum.
In a short time, my wife and I catapulted from a struggle to a much greater degree of material ease. Though not quite at $1,000,000, we are closer to that level than ever before. Now, when we need simple things like new shoes towels, we can actually afford them. Obviously, letting our money just sit in a savings account indefinitely is not a great idea, so we're looking into better options. The material that @MJ DeMarco provided in UNSCRIPTED is great information. We're also considering real estate as a possibility.
We have learned of an opportunity to purchase investment property in another city, where housing is a lot cheaper than in our city. For a pretty small percentage of our current savings, we can buy a house in the other city - with no mortgage - and charge tenants around $1,000-$2,000 per month in rent. Presumably, a property management company would take care of maintenance issues, so we would have to pay them something. Still, we may take in $500 or $600/month in profit.
The questions are:
1. Is it worth the investment, or is it a better idea to focus on market investment (ETFs or other products)?
2. If it's worth the investment, then what percentage of investment do we place into markets and what fraction goes into real estate? Maybe two or three houses would be a good idea.
3. Is it smart to purchase real estate in a distant location, sight unseen?
A possible risk factor may be the difficulty in getting tenants. I have no knowledge of the real estate supply vs. demand in the other city, and it would be a shame to drop $100,000 for a house that nobody occupies. On the other hand, maybe there is a high demand for housing in the other city, and finding tenants will be no problem.
I'm also skittish about real estate investment for rental income, because my parents tried it around 30 years ago, and were cheated. Their tenants didn't like the idea of paying rent, and the local regulations favored tenants; in the end, it was a losing proposition. However, the circumstances in this case may be more favorable.
Lastly, how has the C0VlD-19 epidemic impacted the real estate market? Are people still interested in initiating new rentals?
Please forgive the novice nature of this post and the questions. I am new to possessing wealth at this scale, and new to investing in a serious way. If you have experience in this area, and can provide some insight or advice, please reply. I would appreciate any information that can help us make the best decision.
Thank you.
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