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[quote=Anonymous][quote=Anonymous]

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. :-)
[/quote]

I assume that your husband probably does not want to work much more than another 10 years.  And during that time both of you will be pulling salaries?  And presumably, will have some sort of pension?  I would be even more diversified, then, and focus on limiting risk.  I would suggest you do some reading on bonds as well.  They can be very nice for income stream generation.

What you are doing with the rental income?  Plowing it back in to investments, or using it for living expenses?  If you are using the rents for living expenses, I would gently suggest that you are living beyond your means, since, you are living beyond your salaries.

Also, you should have some sort of plan for your kids' college educations.  I am guilty of not having done this, but you should look into some tax-advantaged ways of socking away cash for college.  You can say how sensible state school can be, but then when that Brown admissions packet shows up at your door, you are going to sell your door mat off to try to pay for it.  You can't delay when they turn 18, so you are going to need some liquid and conservative funds (cash-like) for that first tuition bill.  In the worst case scenario, you are going to have a couple of years where you could be paying $100,000 a year in today's money.  Stocks and real estate are not the best for deadlines the closer you get to the date.

Are you thinking private school for your children?  Can you carry this on your salaries only?  I am not necessarily a private-or-bust! person.  There are very good public schools, and I think an excellent public trumps a mediocre private, no questions asked.  You would think that would be plain as day, but it's not.  But I would recommend paying for private school, if going that route, by trying to swing it with your salaries and not dip into the the real estate return money.  Save that for further investment.  Compound interest is a beautiful thing!

After you have done enough research on your own and are comfortable enough to tell pro from shyster, you can consider hiring a financial consultant on a fee per hour basis (rather than commission basis) and getting a second opinion.  I am a big fan of hiring the right specialist rather than doing everything yourself, and a good financial consultant would be well worth the money.  However, you can be comfortable managing your portfolio on your own at this point, if their fees seem daunting to you.

It also doesn't hurt to have a nice stack of cash on the side too.  I would hold a year's worth of expenses (everything) in cash at a minimum.  Six months for paycheck-to-paycheck, but you can afford a bigger cushion.

With your rentals in a dependable, stable area, solid bonds for further cash flow, and stock holdings for growth, I see a good future for you.[/quote]

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