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[quote=Anonymous][quote=Anonymous]

This is Cheese Lady.  OK, so you make roughly 5% return, after all expenses.  Are you sure you are taking into account months when some units are vacant?  that would bring down your return even more.  This is a respectable return.  What are the prognoses for long-term appreciation?  Some places have good growth potential, some are just saturated, already had their golden years, and won't skyrocket further.

And this property manager, what does he do?  Just collect rent checks?  I mean, you still have to deal with leaky pipes and cutting checks to repairmen, no?

I love real estate.  So, I get you when you basically say you feel its your calling.  You enjoy it more than watching passive investments in the stock market, eh?  You would probably make more money if you had a *touch* more of the slumlord in you--you probably put in very nice fixtures rather than the cheapie "rental" versions.

BUT, you are definitely overinvested.  RE is a great hedge in some ways, and depending on location, can really cushion any market freefalls.  But RE can also start to tank too, and with few exceptions, won't have great growth in the long run compared to stocks.  Since you guys seem relatively young, I would recommend investing in equities and broadening out.  If you are not that psyched, you can take the conventional wisdom and invest in an array of broad index stocks (domestic, international, growth, big companies, medium companies, small companies) and just ignore them.  Avoid trying to play the market and invest in individual stocks.  Great way to lose a bundle.  Try to steel your nerves and invest regularly, not just at market peaks--that can really eat into your growth.  Invest regular amounts in regular intervals, doing so even when the market is tanking and people are divesting like rats off a sinking ship.

At the end of your working life, hopefully you will have a very sizable goose that will continue to spit out eggs that you can live on comfortably til your dying days and secure the futures of your children and children's children for years to come.

Best of luck to you and your prosperous future![/quote]

Cheese Lady, you rock. This is OP. I don't have a catchy name - maybe "slumlord wannabe?" :-)

Your advice is wonderful. I am going to sit down after kids are in bed and really research your advice about funds. I admit that since I love RE so much I've really neglected learning about other parts of the market. I'll put and end to that soon (I just find it so intimidating!) But you're definitely helping.

As far as vacancies, I am not exaggerating when I say that it rarely ever happens. Three properties are within 2 blocks of the Shaw metro and the other 2 are in Columbia Heights in good locations. Generally I have new tenants lined up before the old ones depart, and have it vacant for merely days while I re-paint and make repairs in-between. In 11 years, I can think of one time that one apartment went vacant for 1.5 months. Really, it's been wonderful.

The property manager is full-service; he handles repairs, inspects every few months, and even facilitated replacing that old kitchen. I don't do the slumlord thing but I don't install granite either - "builder grade" and "decent quality" are my buzzwords when making repairs and improvements. I do insist on making repairs immediately and replacing worn-out fixtures and appliances. A little money spent goes a long way towards getting, and keeping, excellent tenants. I recently lost a tenant that had been in one of my group homes for 7 years!

Since you've been so generous, can you tell me what you would do with the added info that I am 39, DH is 52, our kids are 6 and 8 and although we've been trying for another kiddo it looks like we may be done. Anything you would do differently with that info?

Again, thank you. I really appreciate the guidance. Some people would be too nervous to be landlords but I find it easy - the investing stuff is what I find totally intimidating! That and health insurance stuff. :-)
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