Everybody is Getting Into Real Estate
Maybe I am exaggerating a little, but it seems like every blogger that I read is getting into real estate. As a landlord myself, I can’t help but notice these things. It makes me wonder what the implications might be. I suppose it could mean that the price of real estate is nearing a bottom and that now is a good time to get in. Just check out all the bloggers that are getting into the landlord business:
Philip Taylor at PT Money is planning on renting out his home. This is actually the way that I got into real estate. Our first home would not sell and needing some extra room after kid number 6 was born, we were looking for something bigger. In order to do that, we could show the income from renting on the mortgage application which cancelled out that expense. It has been an interesting experience.
Crystal at Budgeting in the Fun Stuff is building a new house, renting the old one, and may just take in boarders. It sure will help offset the cost. Too bad I can’t charge my kids rent, yet. I suppose if they bounce back, I will be doing just that.
Money Reasons is checking out the possibility of investing in real estate. Sounds like a duplex may just be in the cards. I would be cautious in a town with only a few major employers. One of them goes out of business, and the vacancy levels skyrocket, homes are foreclosed and property values drop.
Sandy at Yes I am Cheap even got money from her 401(k) to buy a second property.
Like I said, I am not sure what this all means. I do know that I would like to own some more real estate. Is it something about having an investment that you can touch and see? Is it because most people get the concept of owning property and renting since we are either a tenant, own a home, or are a landlord?
My Real Estate Philosophy
For me, real estate is a long term investment. It should all be paid off in my mid-60’s even if I don’t end up trying to pay off the mortgages early. Then the rents will be used to replace income from working allowing stock investments to grow as long as possible before having to take mandatory withdrawals.
To protect my investment, I have insurance which protects me from natural disasters just like you would want to have on your own home. There is also provision to replace lost rents should anything happen.
In the short term, my goal is to simply break even on cash flow and allow the tenants to ultimately pay for the mortgage. Unfortunately, there is a lot of excess housing supply in my area and rents can’t be raised. In fact, the general trend has been negative, but I have been able to stand pat. It has been that way for the past decade. I consider myself fortunate that I have decent tenants.
Maybe someday, I will go into more detail about my real estate experience. In the meantime, I am sure that there will be plenty of real estate discussion in the blogosphere since it seems like everyone is getting into real estate.
Are you looking to invest in real estate?
These are the carnivals in which my blog has appeared this past week: