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A guy I used to work with once told me that instead of buying a $100k rental house, you should buy three $30k rental houses. We're in a LCOL area, and him and h

A guy I used to work with once told me that instead of buying a $100k rental house, you should buy three $30k rental houses. We're in a LCOL area, and him and his wife easily made over $200k in salary alone, so why he spent his free time managing all those rental houses is beyond me. He had over 20, and managed them all himself.

LeifCarrotson 8y ago
20 rentals at $1000/mo is $240k/year. Granted, that's definitely not all profit, but it's a lot of cash flow.
coldtea 8y ago
>so why he spent his free time managing all those rental houses is beyond me. He had over 20, and managed them all himself How much time do you believe it takes to "manage" those 20 houses? A month a year at most. (Source: have friends with low 10s of houses).
- Gpetrium 8y ago
  That is highly dependent on the quality of renter and quality of your property. One of the key values of having multiple rental is the economies of scale, for example: * Property advertisement - Preparing material and advertising for 1 property can be more expensive than multiple properties * Material for fixes - Purchasing material for 1 property can be more expensive than multiple properties * Vacancy - The cost of vacancy for a single rental is higher than having multiple rentals. The other rentals may off-set the cost of the vacancy lot for a period, without requiring external cash flow. * Experience - Multiple properties will give you the opportunity to experience different issues and allow you to take proactive steps to diminish certain risks.
AmVess 8y ago
That depends on the local market and what you can charge for rent, and what your tolerance for pain is. When I first started buying houses to rent, I had a rental unit in a LCOL area, and I spent a lot of time dealing with tenants and rent issues. It was a constant problem, so I sold the house. I might have broken even on the venture. I ended up with a handful of starter homes near nice schools, and had a much higher class of renter as a result. Far less work, vastly fewer headaches. I also had a FT job, so didn't have the time or energy to chase down rent checks.
twblalock 8y ago
You can pay property managers to deal with the day-to-day management of the properties, vetting new tenants, collecting the rent, etc. You can still come out ahead. I know a few people who do this and they don't spend much time on their rental properties.
bequanna 8y ago
I have 29 myself. I self-manage my properties and work a full-time remote job. A few weekly calls during the workday. A few evenings or weekend daytime meetings with prospective tenants or maintenance staff each month. So, ~$1 to 1.5k per hour of work. Not a bad paying side gig.

LeifCarrotson 8y ago

20 rentals at $1000/mo is $240k/year. Granted, that's definitely not all profit, but it's a lot of cash flow.

coldtea 8y ago

>so why he spent his free time managing all those rental houses is beyond me. He had over 20, and managed them all himself How much time do you believe it takes to "manage" those 20 houses? A month a year at most. (Source: have friends with low 10s of houses).

Gpetrium 8y ago
That is highly dependent on the quality of renter and quality of your property. One of the key values of having multiple rental is the economies of scale, for example: * Property advertisement - Preparing material and advertising for 1 property can be more expensive than multiple properties * Material for fixes - Purchasing material for 1 property can be more expensive than multiple properties * Vacancy - The cost of vacancy for a single rental is higher than having multiple rentals. The other rentals may off-set the cost of the vacancy lot for a period, without requiring external cash flow. * Experience - Multiple properties will give you the opportunity to experience different issues and allow you to take proactive steps to diminish certain risks.

AmVess 8y ago

That depends on the local market and what you can charge for rent, and what your tolerance for pain is. When I first started buying houses to rent, I had a rental unit in a LCOL area, and I spent a lot of time dealing with tenants and rent issues. It was a constant problem, so I sold the house. I might have broken even on the venture. I ended up with a handful of starter homes near nice schools, and had a much higher class of renter as a result. Far less work, vastly fewer headaches. I also had a FT job, so didn't have the time or energy to chase down rent checks.

twblalock 8y ago

You can pay property managers to deal with the day-to-day management of the properties, vetting new tenants, collecting the rent, etc. You can still come out ahead. I know a few people who do this and they don't spend much time on their rental properties.

bequanna 8y ago

I have 29 myself. I self-manage my properties and work a full-time remote job. A few weekly calls during the workday. A few evenings or weekend daytime meetings with prospective tenants or maintenance staff each month. So, ~$1 to 1.5k per hour of work. Not a bad paying side gig.