Those of you doing 1031s, do you just leap into a new property without any inspection or other contingencies so you can complete the transaction in the right amount of days?

Anonymous wrote:Owning rental properties is not passive.

THIS, Really hard to find good management companies or people and sadly I have learned you have to micromanage until you trust, step back and then tune in and step back. They absolutely will try to take advantage. As the homes age, there are so many issues. Plus appliances are made poorly these days which means more repairs and replacements. I could go on and on. As the PP said, it is not passive income. Collecting dividends is passive.

Anonymous wrote:

Anonymous wrote:We owned 5 rentals. We rented our first house when we moved out and then bought 4 more post subprime housing meltdown. All were bought with 20% down and 15 years mortgage. We paid additional principals and paid them all off in 8 years just before we retired. The rental income covers all our expenses now and we haven't touch our 401/iras since retirement. Our retirement accts actually have gone up 50% since we retired 5 years ago.

i hope you’ve done roth conversions because is what you say is true you are going to get a beat down with RMDs

why can't he do a 1031 exchange and then into Roth IRA?

Anonymous wrote:We owned 5 rentals. We rented our first house when we moved out and then bought 4 more post subprime housing meltdown. All were bought with 20% down and 15 years mortgage. We paid additional principals and paid them all off in 8 years just before we retired. The rental income covers all our expenses now and we haven't touch our 401/iras since retirement. Our retirement accts actually have gone up 50% since we retired 5 years ago.

i hope you’ve done roth conversions because is what you say is true you are going to get a beat down with RMDs

Anonymous wrote:It's a pain in the butt. I'm an attorney, and I self-manage 4 units that are nice enough to attract young doctors. I also have young kids. The last thing I want to deal with is another broken appliance, complaints about the water pressure, or the neighbors' dog. Cash flow is pretty good because I bought into real estate in my twenties, 1031'd along the way, and mortgages are at 2.8%. It will cover half my retirement expenses most years. I ignore appreciation because the properties will go to my kids, and they can sell at the stepped-up basis or hold on to them.

yup. This is my plan buy, borrow, die. We’ve done som many 1031exchanges and so much depreciation on top of depreciation that the only way to get rid of these is to die. However i have been amazing publicly with tenants. Not many issues or complaints.

I have a TH bought pre covid and refinanced to low 2’s 30 year rate. Considering to rent it out when we move to a SFH, based on comps we will cash flow $500/mo after taxes and tax breaks are taken into account. Additionally our principal pay down would be $800/mo. Appreciation is the wild card but assuming 3%/year this is only moderately outpacing the returns we’d get if invested the equity into the S&P 500. Feels like it’s not worth the hassle to be a landlord

We owned 5 rentals. We rented our first house when we moved out and then bought 4 more post subprime housing meltdown. All were bought with 20% down and 15 years mortgage. We paid additional principals and paid them all off in 8 years just before we retired. The rental income covers all our expenses now and we haven't touch our 401/iras since retirement. Our retirement accts actually have gone up 50% since we retired 5 years ago.

We rented a NoVA home we moved out of, but then we decided to sell it. It wasn't that we hated being landlords, it was more because there was a lot of appreciation in the house and we weren't going to keep it forever and wanted to avoid the tax hit.

I think investing in rental properties is a good idea if 1) you can handle the work of being landlords, and 2) the properties you rent out are in a high-demand area without a lot of empty comparable rentals available as competition. We rented our house out ourselves, using Zillow to find the tenants. FWIW, this can be a lot more work than you might imagine, so be prepared for that. We had a huge amount of interest, but not all of it genuine, and that took up a lot of time to deal with. Sounds like you think you will have access to tenants without having to find them on Zillow or something similar though? My DH is handy, so he handled most repair issues himself. When we looked into management companies they all wanted a month's rent to find a tenant and another month's rent to manage the property, and that seemed like too much to us, it would have cut into our profit, so we handled everything ourselves. It was very easy -- but only because we found a great tenant and they renewed.

We are lawyers, and so I think that helped when we drafted the lease. I looked at a variety of forms, and then cobbled something together that made the most sense for our property/situation.

Keep an eye on interest rates -- it might not necessarily make sense to pay "cash" for the properties. Or at some point if rates go down, and rents go up, you might want to pull cash out by mortgaging.

This can be a great way to make money, as long as things go smoothly. But it's a nightmare and can end up costing you money if things don't. So there is risk involved. For us, we mitigated risk by requiring a very high credit score for people to even apply, which you can do in VA but I'm not sure you can do in jurisdictions that are less landlord-friendly like DC.

I don't regret selling the house we were renting out, but given the state of the world I thought long and hard about it, because I liked the idea of having that money in real property. It's a gamble though.