Reply to Why are people so obsessed with rental properties yielding positive cash flow?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]I can only tell you what I do and say it works for me

I have 4 properties I manage myself. I’m a SAHM so this is my “job”. My annual PITI for all homes is $33,000 and my gross rental income is $123,900. I used to set aside 12k/yr for repairs, but stopped doing that because I haven’t had much and have 40k sitting for that.

Until recently I used to invest the profits in index funds. I’ve since pulled that and have it sitting in cash looking to pick up a 5th property when the bubble bursts. [b]I have enough for a cash buy[/b]. The real estate income invested monthly for the last 10 years has created incredible opportunity.

My goal is to get this 5th property and hopefully be bringing in a gross of 160k/yr and at that point my DH will retire from his w2 job. The rental income will be a nice supplement to his 401k. [/quote]

And you would be a fool to do so. It significantly lowers your leverage. Better to spread it around as down payments on multiple properties. If you pay cash for an income property you will likely do worse than a total stock market investment. The reason real estate can sometimes have better returns in only because of leverage. [/quote]

Not that poster, but I’m a realtor and I have about a dozen investor clients. Quite a free of them are cash buyers. Especially now. I’ve had calls from alll of them waiting on opportunity now that rates have increased. I’d not say any of them are foolish, they are incredibly successful.[/quote]

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