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[quote=Anonymous][quote=Anonymous]

What is the total value of the properties?  What is your rate of return?  If it is over 10% after expenses, you are doing phenomenal.  Compare to the rest of your portfolio--stocks, bonds, etc.  Unless your real estate returns are doing great, and this is your specialty as an investor, I would advise you to diversify.

Also, what kind of mortgages do you have?  Any ARM's?  If so, given the uncertainly in the coming years, I would advise you to pay them off before the rates potentially skyrocket.  If you have a 30-year fixed at 3.5%, making excellent returns, and real estate is not disproportionate in your portfolio, then by all means, go buy some more.

But isn't long distance management a major pain?  Who wants to hire and pay a plumber when you are miles away?[/quote]

OP here, thank you - these are great questions.

Total estimated value of the properties (equity): 1.25 million (2.85 million before mortgages are taken into account). The mortgages are all fixed - one is 30/year at 4.5 and the rest were just refinanced to 15/year at 4 (good rate for investment properties I think).

Rate of return: I'm honestly not sure how to calculate this. We make 20K in rents/month, pay $13,500 in mortgages, and pay the property manager $1,600. Repairs and improvements probably take 2-3K/month on average (just installed a new kitchen in an older property, replaced a roof, etc. We try to make sure the properties are in great shape so we can expect great tenants.)

This is absolutely our specialty. We do it ethically and well. We really feel strongly about running a solid business.

That said? We really have very few other investments - we have about $175,000 in retirement accounts and $40,000 in 529s for our boys who are both younger than 10. My husband is now a State Dept employee and we're maxing out the retirement account there but that's really it.

Long distance management isn't ideal. We lived within 15 blocks of all the properties for 10 years, then we joined the Foreign Service! So off we went. The property manager is good, not great, but things are going pretty well. He's finding new tenants quickly, managing the bills well, and agrees with my philosophy of keeping the places in very good shape so that we can attract, and keep, very good tenants. I'm home on R&R at least once a year and do a sneak inspection to make sure he's keeping things in good shape.

I really appreciate your advice! Based on what I wrote, would you pay down or continue to add? Thanks again![/quote]

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