4 ms·
Is renting out really that low risk even with a property management company? You are also now exposed to the vagaries of rental pricing and demand.
by arielweisberg 9y ago
Is renting out really that low risk even with a property management company?
You are also now exposed to the vagaries of rental pricing and demand.
- jshen 9y agoI think people misunderstand low risk. On average it easily nets out positively depending on location. The problem is the "on average" part. If due to bad luck you aren't the average, is it catastrophic for your finances, or is it just painful. I wouldn't take the risk if I were in the first category.
- klipt 9y agoReal estate has a long negative tail if e.g. the renters stop paying and trash your place when evicted.
- toomuchtodo 9y agoThat's what reserves, insurance, and a real estate attorney are for.
- lotyrin 9y agoWhen my wife did the math before purchasing in our market, you'd have to have frequent or catastrophic repairs, have crazy vacancy (>50%), or be taking in well below market rate for comparable units (or some combination there-of). It seems the kind of property management it takes to sink the rent-vs-buy gap is beyond abysmal and made us really confident that we could afford to purchase despite not being sure if we're staying in the place long-term.
- sidlls 9y agoIt depends on the market segment. It's not that difficult to pick markets where the 1% rule (rent should be ~1% of the value of the home) applies and maintenance and vacancy are minimized. That's going to be primarily middle class and upper-middle-class markets in areas that don't have absurd "values" for homes.