The pursuit of passive income: Is it time to become a landlord?

If you visit personal finance or investing blogs on a regular basis, you've probably read countless articles on the virtues of passive income. After all, many personal finance experts believe that passive income is the key to early retirement, financial independence, and permanent wealth. But, what is it exactly?

A Definition:

Investopedia describes passive income as “earnings an individual derives from a rental property, limited partnership or other enterprise in which he or she is not actively involved.”

In addition to rental property, typical sources of passive income can include money earned from investments such as mutual funds, dividend-paying stocks, Real Estate Investment Trusts (REITs), and asset-backed securities. Unconventional forms of passive income can include earnings from copyrights, patents, and licenses or even royalties. The birth of the Internet also created a generation of entrepreneurs forging their own path toward passive income via the Internet, including Pat Flynn from Smart Passive Income. Except, according to Flynn, blogging is just part of the game.

“Although a blog isn't passive in nature, it's one of the best platforms for launching other passive income opportunities.

-Pat Flynn

Simply put, passive income is the opposite of active income. The money you earn at your 9-to-5 job is not passive income, nor is the money you earn through your side hustle or garage sale. Real passive income is earned in your sleep and regardless of the amount of effort you put into it. And that's why the idea of passive income has always been so popular. J.D. even wrote about passive income back in 2006, which seems like a lifetime ago.

“Passive Income is money that you earn without having to work for it. When you earn interest on a savings account, you are earning money passively; it accrues whether you're working or not.”

-J.D. Roth

The pursuit of passive income through rental property: Is it the right time?

One of the most popular ways to generate passive income is to buy (or finance) an income-producing rental property and become a landlord. And, according to a recent study from the Joint Center for Housing Studies at Harvard University, now may be the perfect time.

According to Harvard researchers, the percentage of households that rent is on the rise, up from 31 percent in 2004 to 35 percent in 2012. That may not sound like a giant surge, but it is when you're dealing with the entire population of the United States. To keep things in perspective, the Harvard study claims that the total number of renting households surpassed 43 million in 2013.

Researchers blame the increase in renters on a convergence of factors, including a record number of foreclosures in 2008 and economic troubles caused by the Great Recession. However, it also points to certain benefits that make renting a popular option. Some of the benefits of renting named in the study: greater mobility, protection from fluctuations in the housing market, and freedom from home maintenance and repairs.

The fact is, renting has simply become the best option for many. In fact, recent reports show that rents have skyrocketed in many parts of the country due to increased demand, so much so that the cost of renting has moved out of reach for many middle-class families. And while that's bad news for those who simply want an affordable place to call home, it's a real estate investor's dream.

My Experience as a Landlord

Becoming a landlord might sound tempting, but — trust me — it's not as glamorous as it seems. It's also not nearly as passive as many think it to be, despite what Investopedia or others claim. As someone who has owned and managed two single-family rental properties for almost a decade, I must confess that the income I've earned has been anything but effortless. The truth: It's actually been a lot of work.

For example, we've spent far too many weekends painting and cleaning our properties in between tenants. We've driven to and arranged countless meetings to discuss remodeling projects and repairs. We've had to deal with a whole host of random issues such as late rent payments, feuding neighbors, and secret pets. Once, one of our properties was even left in total shambles — with oil-stained carpet, missing doors, busted windows, and broken everything.

Using Passive Income for Early Retirement and Financial Independence

On the other hand, we do expect all of our hard work to pay off sooner or later. The fact is, both of our properties should be completely paid off in about 12 years. By then, we'll be 46 years old and (hopefully) on the homestretch of our journey to retirement. Since we'll have two children nearing college around that time, we plan to use our monthly rental income to help pay for their higher education. After that, we'll keep it for ourselves and use the earnings to supplement our own income and early retirement plans. Our properties currently rent for around $1,800 total, but that's only because I've promised not to raise rent on either of our long-term tenants. But they'll move out eventually. And when they do, we hope to pull in at least $2,200 per month or more.

Want to Become a Landlord? Consider This

Since real estate markets are vastly different in different parts of the country, I couldn't possibly write something that applies to everyone. On the other hand, if you're considering purchasing an income-producing property to secure your own stream of passive income, there are certain things you should know:

  • You need plenty of cash — Banks have tightened lending standards significantly over the last decade, which means that a down payment of at least 20 percent is almost always required. If you can't afford to come up with the down payment, then you probably can't afford to own rental property in the first place.
  • You are taking a risk — Many people think owning rental property is always a money-making endeavor. However, that couldn't be further from the truth. Investing in rental property has plenty of risks including nonpayment, property damage, prolonged vacancies, and more.
  • Bad things do happen — When you're a landlord, “no news” is typically good news. However, there's a reason why so many people are hesitant to get into the game. We've all heard rental horror stories and the fact is that many of them are true. You'd be amazed at the kind of damage people can leave behind, and how much of a headache it can cause. You know the saying, “Hope for the best, but prepare for the worst.”

Before you jump in head first, it's important to understand what you're getting into. That typically means researching the rental market in your area and gaining an understanding of current and past trends in rents and occupancy.

It's also important to figure out what you need to earn in order to cover your expenses and turn a profit. And if you don't like dealing with people or doing repairs, you can also research property managers in your area. For a monthly fee, they'll do most of the heavy lifting for you — including finding tenants, hiring out repairs, and more.

Becoming a landlord isn't for everyone, but it is a great way to earn (somewhat) passive income. And if early retirement, money for college, or financial independence are your goals, it's just another way to make them happen.

Have you ever considered buying rental properties as a source of passive income? If so, why? If not, why not?

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NicoleAndmaggie
NicoleAndmaggie
6 years ago

Land lording is active income, not passive. Unless you really luck out with a property manager.

Holly@ClubThrifty
6 years ago

I actually think it falls somewhere in-between. It’s not as active as our full-time jobs. After all, there have been months (and years) when all we’ve done is collect checks and deposit them. On the other hand, it’s certainly not passive.

Curtis@PayOffMyRentals
6 years ago

Unfortunately, too many people don’t factor a property manager into the purchase of a rental property. When you have to manage your own properties, it’s not truly “passive income”. However, when you include the costs of a Rental Management Company, Vacancy costs and maintenance fees into the equation (as we always have), then you can consider the rental cash flow as passive income. We lived in Costa Rica for 3 years without ever having to respond to a clogged toilet call due to using a rental management company. A hidden reality in most parts of the country: You won’t make… Read more »

Stefanie @ The Broke and Beautiful Life
Stefanie @ The Broke and Beautiful Life
6 years ago

I can’t afford a downpayment to buy my own house let alone start searching for a rental property :/

Carla
Carla
6 years ago

Ditto. :-/

Elizabeth
Elizabeth
6 years ago

Ditto! But I don’t see my not owning property as a financial crisis — especially not with housing prices in my country!

Years ago, one of my bosses outlined how if I invested the difference between renting and owning I could still come out ahead. The strategy was outlined in a recent Globe and Mail article: http://www.theglobeandmail.com/globe-investor/investment-ideas/the-renters-guide-to-investing/article18732568/

I like the idea of a “renter’s dividend” — especially if the money is invested in a tax sheltered vehicle.

mysticaltyger
mysticaltyger
6 years ago
Reply to  Elizabeth

I live in an expensive housing market and I have often thought the same thing. I skimp on housing by living in a small apartment and save the difference. The problem most renters have is they blow the difference on other stuff, so they end up broke or worse.

Diane C
Diane C
6 years ago

Stefanie and Carla – I was in the same boat. Housing was not affordable where I lived, so I bought a rental in the less-expensive town where I grew up. I leased it and kept on saving. After eight years, I sold it and bought a tiny condo where I lived. Four years later, it doubled in value and I sold it to buy a larger property, which I lived in for eleven years. I finally got married. Each of us sold our homes to buy one together and we were able to pay cash. It happened because I started… Read more »

counting the pennies
counting the pennies
6 years ago

Don’t give up, please. At the HEIGHT of the housing bubble in the SF Bay Area, in the 5 counties around my job, there was exactly one POS off the grid home that I qualified for and I wasn’t sure it was structurally safe. I went out of state and bought a four plex in a small town and got a manager. Last year, between savings and the profits from my rental, I bought a duplex in the SF Bay Area. It did take more persistence and disciple than I wanted to do. But it is a tangible accomplishment and… Read more »

Money Bunny
Money Bunny
6 years ago

What Curtis is saying is very true.

It’s difficult but not impossible to make money in rentals in high tax, strong pro-tenant law states but you earn it.

Also it’s a lot easier to get into a problem property than to get out of it. I was waiting to do an inspection on a 4-family and realized that everyone there other than the inspector was going to get a handout if I did the deal.

William @ Drop Dead Money
William @ Drop Dead Money
6 years ago

You’re right about one thing: landlording is NOT passive income. I think of it more as a side business.

I know a few people who ended up owning several rental properties, and it’s a full time job. Lucrative, but full-time.

Richelle
Richelle
6 years ago

I think about doing this all the time. I live in a high COL area and trying to break into the real estate market requires a lot of money and my thought was that an investment property could help us afford a higher mortgage. But I am simply uncomfortable taking the risk. Being a landlord is a lot of work and the nightmare stories are truly terrifying.

phoenix1920
phoenix1920
6 years ago

Love the article. We want to do this when we pay off our house in a few years. Are there good books to help with learn this? Attracting the right tenant is key, but where do you go to do this?

Holly@ClubThrifty
6 years ago
Reply to  phoenix1920

We learned almost everything we know from several close friends who own rental property. However, the internet is a treasure trove of information on investing in rental real estate. I’m sure you could find any information you need and then some.

Mick
Mick
6 years ago

Since rents are getting so high I have to wonder if people will start buying again.
I worked as a police dispatcher for years and heard of so many problems I vowed I would never become a landlord.
It seems like the tenants have way more rights than the landlord.

Kenny
Kenny
6 years ago

Landlording has 90% pleasure and 10% pain. Some have it more and some have it less. It all depends on what % of the Landlording is being managed under a DIY (do it yourself) model. I do ALL of it myself, minus the actual contracting work. And for that I have 90% pleasure and 10% pain. I still take the calls, I still rent the apartments, I still do the paperwork, I still do the background check, and I still get rid of the people (if needed). The rest of it is done by a contractor who is a handyman… Read more »

Brian @ Debt Discipline
Brian @ Debt Discipline
6 years ago

I would not consider buying a rental property until I had my own home paid off.

Robert
Robert
5 years ago

It’s actually the other way around…
You should have an asset before a potential liability…which is what your principal residence actually is

Nic
Nic
4 years ago

Hi Brian, Honestly, I can see how for the average person that is true. However, if one is passionate about real estate investing nothing could be further from the truth. I am 36 and I currently own 34 town homes and 25 apartments. I started out 5 years ago with my first fourplex and grew it to where I quit my full time job in investment banking to be a do it yourself landlord. Currently, I employ a full time handyman. With some market timing luck I am where I am now. I never bought a house and if I… Read more »

John C @ Action Economics
John C @ Action Economics
6 years ago

Being a landlord has been challenging for us. One thing we have experienced on the opposite end of the “no news is good news” as a landlord is that we had a tenant who would call us and say “about 2 months ago the fridge stopped working” I would have much rather known when it happened so I could fix it immediately rather than waiting. When we went to fix the fridge we found other repair issues that hadn’t been brought to our attention too.

Holly@ClubThrifty
6 years ago

Ha! I think you may be right about “no news” sometimes being a bad thing. We had one tenant completely destroy our property and were completely caught off guard because we hadn’t heard anything from him for several months before that.

A-L
A-L
6 years ago

Being a landlord has helped us to have our own house. My first place was in an low cost-of-living area. But when I needed to move into the city, the only affordable places in a safe area were multi-family properties (I mainly looked at duplexes). We now live in a multi-family. We live on the main floor and rent out the ground level apartments (it used to be 1 apartment below, but we added a tiny efficiency a few months back). It brings in about $1600/month. We have a contractor who charges reasonable rates whenever repairs are needed. And since… Read more »

Holly@ClubThrifty
6 years ago
Reply to  A-L

I tried to talk my husband into buying a multi-unit and living in it for years but he never caught on to the idea.

I think that’s awesome. It sounds like you made a great decision, financially and otherwise.

Andy
Andy
6 years ago

I was a landlord in portland oregon for a few years. The house behind ours was abandoned after the lady had passed away. She had a reverse mortgage on it and the elderly brother of the deceased said he was threatened by Bank of America not to touch the house. Calls to Bank of America said they didn’t think they own the house. So the house was abandoned for about 1.5 years and random squatters moved in. The front flower box was filled with used and unused condoms, there were huge piles of electronics (cell phones) probably leaking chemicals into… Read more »

El Nerdo
El Nerdo
6 years ago

I’ve been having trouble with this notion of “passive” income because it seems that the tax definition and the practical definitions diverge. I don’t understand this clearly and I’m only putting forward my doubts for possible clarification by the GRS hive mind. From a practical perspective, seems to me there is nothing “passive” about rental income, unless you get a property management firm that takes your income and turns it into their fees, ha ha ha. Otherwise there’s a lot of sweat & tears (hopefully not blood). On the other hand, seems to me that dividend or bond or royalty… Read more »

Retirmentbuff
Retirmentbuff
6 years ago
Reply to  El Nerdo

I was wondering about this too and think what we are really talking about is income producing activities other than wages. I invest and have several rental properties and one business we co-own with my parents. They take work to run so not entirely passive. Being a silent partner in a business you own a % of could count as fully passive income. Our rentals were managed by family and we have all put in some sweat equity. Eventually we got to the point where having a property manager made sense which cut down on the demands massively. I’m a… Read more »

BrentABQ
BrentABQ
6 years ago

Being a landlord is not passive, and if you try to make it passive its not that great of an active investment. Can you liquidate easily? Is there a lower bound to your losses? What is your expected rate of return and std deviation? If you are in a possition where your tenants stop paying and need to be evicted in a way that involves the courts your property could be incomeless for a long time possibly putting the property into foreclosure. You could lose everything from a single bad tenent.

El Nerdo
El Nerdo
6 years ago
Reply to  BrentABQ

@Brent

I think the confusion comes in part from the IRS categorization of earned, passive, and portfolio income.

http://www.taxbraix.com/tax-articles/difference-between-earned-portfolio-passive-income.html

It seems that per the IRS rental is “passive” even if you have to spend half of your life minding your property.

InvestAsian
InvestAsian
6 years ago

I honestly don’t get why more people don’t invest in REITs instead of rental property. Not only do REITs invest in commercial and industrial property, which generally have a higher return than residential property.. but the small fee that the fund takes is definitely worth not having to deal with the hassle of tenants, and getting to focus on other endeavors.

Money Bunny
Money Bunny
6 years ago
Reply to  InvestAsian

REIT’s do not have some of the tax advantages for high earners in the 25% bracket, and for low income people it’s the hands on component and leverage that really helps them with making the investment a better proposition.

Retirmentbuff
Retirmentbuff
6 years ago
Reply to  InvestAsian

Because they are different. REITs and actual property are two different things. REIT stocks (they are stocks) have historically behaved differently from the stock market as a whole to work as a diversifier, but it’s not the same as owning property outright. Rather it’s a means of diversifying your stock portfolio but not everyone is looking to buy addition stocks and want to hedge against the market by owning an investment property. A huge difference is that outright ownership of investment real estate would inevitably be concentrated in a few properties in one or a small number of locations and… Read more »

Pete G in SD
Pete G in SD
6 years ago

I don’t often weigh in, but this is definitely one near (and not so dear) to my heart. We bought a 2 bedroom 1 bath house about a half block from the beach in 2002 which we lived in until it got too small for us. Our first renter was terrific – a USN LT that had just completed medical school and was doing her internship at Balboa (Naval) Hospital. However, she was dating a guy that was crazy enough to intentionally set fire to the house – imagine a call at 11 pm on a Friday saying (seriously) “the… Read more »

Ruckster
Ruckster
6 years ago

It’s all about making the numbers work with rental properties. Always factor the cost of mortgage plus property taxes plus insurance plus maintenance versus the price you can charge in rent. If it’s a high demand rent area your risk of a vacancy goes down.

Even if the housing market goes down 10% in a yr you will still likely be able to charge the same in rent.

It’s a great way to diversify your portfolio and keep up with inflation.

Curtis@PayOffMyRentals
6 years ago

Because REITS don’t pay for your equity position like tenants do.

Remember, the tenants buy the house for you. When you EVENTUALLY own the house and clear the mortgage, you win. You make money.

Don’t kid yourself, Rental Real estate is a long-term proposition. If you can treat it like a business, get a rental management company to MANAGE your properties, it becomes passive income. Even a properly managed stock portfolio requires time to investigate , purchase, manage and occasionally sell your investments. That requires time and effort, aka: Work.

Elizabeth
Elizabeth
6 years ago

Good post! I have a question though: What about income tax on rental income?

I have a friend whose looking to buy a home and rent her condo. In order to do it, condo fees, property taxes, utilities, etc. would have to equal what she can charge in rent. However, she hasn’t factored income tax into the equation. I’m not sure how that works – I’d be curious to hear from some of you landlords out there!

Money Bunny
Money Bunny
6 years ago
Reply to  Elizabeth

Take a look at biggerpockets. Many people have asked these questions already. It’s also a bit complicated. Many people feel that Real Estate Investing and Do It Yourself Taxes are not compatable. I had an accountant do mine to figure out the depreciation on the first year I put a property into service. Take your time, learn how it works, and seek advice from experts who are not making a commission on you “Doing the deal.” An hour with an accountant who does REI to go “Ok so this is what you should be looking for numbers wise.” is well… Read more »

Daniel
Daniel
6 years ago

I’m shocked it took as long as it did for REITS to come up, and the article didn’t even mention them! Why would I take a huge chunk of money, lose the liquidity, buy only one “basket”, whos asset appreciation value I have relatively little control over (market trends, lending rates, sell in 20-30 years one time, etc)… when I could buy an ETF such as a REIT, in which case I can put in as much or as little as I want, take it out or put money in whenever I please, and in the end, receive most of… Read more »

Curtis@PayOffMyRentals
6 years ago
Reply to  Daniel

Because you’re not understanding that REIT vs. rental real estate is an apples to oranges comparison. Real estate has the huge advantage of leverage and tenants who pay for the investment. REITS don’t give you those advantages. I’m not against REITS. I’ve owned them, but it’s not the same. It’s obvious that rental real estate investing is not advisable for the majority of investors, but it’s misguided to dogmatically state that it’s a bad choice or that it automatically becomes a full-time job. There are right ways and wrong ways to hold and manage investments.

Komrad
Komrad
6 years ago

I’ve consider it, but there are a few obstacles. 1) no free time – I’m always swamped at my day job , so that I don’t take more than a 10 minute break and eat lunch at my desk. I tend to get home around 8 pm, and that’s when I have dinner and take care of personal business before heading to bed to start the work day all over again. There is no time to go house-hunting , handle maintenance or other landlord-related tasks. 2) I’m on-call 24/7/365 , so I might want to work with a tenant on… Read more »

Peter Guest
Peter Guest
6 years ago

Great article. I was excited to see a broad view that also outlined the potential downside of being a landlord. I have always thought that owning rental property is far from ‘passive’. Maybe ‘semi-passive’ income would be a better term.

Gabe
Gabe
6 years ago

Great article. My wife and I have been talking for months about this topic.

I agree that it can be a real headache. We are still years aways from having the money for a downpayment, but when we do the leap I will definitely take on a property management company. Even if it eats in on our profit, I just do not want the stress from it, since I will want to continue with my regular job too.

Matt
Matt
6 years ago

I have 7 rentals and I reckon that I spend less than 1 hour per month on them in total. That’s passive enough for me. Property managers rock!

El Nerdo
El Nerdo
6 years ago
Reply to  Matt

I’m curious–what’s the return on equity on that?

Laura
Laura
6 years ago

For us, no. If you’re raised to be handy or are young and energetic enough to learn it without pain, great. But we’re tired baby boomers who can barely do basic maintenance and find it hard just to handle our own house. It would suck eggs to have to do it on another property too.

Did anyone happen to see this: http://money.cnn.com/2014/05/22/real_estate/home-buying-salary/index.html?iid=HP_River . We live in Boston and won’t be buying another property any time soon.

Ben
Ben
6 years ago

Another good article. However, I think that getting a property manager will make it more passive, as others in the comments have said. You don’t need to deal directly with tenants, and for the small fee, the property manager takes care of it all. You just need to keep the property up to date every few years with a paint job and other tasks. Also, with Interest Only loans on the properties, you can lower the repayments to make it closer to cash flow positive (obviously depending on a lot of factors). I recently bought my first property using a… Read more »

No Nonsense Landlord
No Nonsense Landlord
6 years ago

I have a few rentals, and it is definitely worthwhile. It is going to allow me to retire about 10 years early.

Bruce
Bruce
6 years ago

Please, keep the landlord horror stories coming! Nothing could be better for those of us who are serious about buying and renting out properties, than newbies being scared to death! Now, some comment suggestions: 1. When rentals are a topic, all comments from those who have never owned one should be screened out. Those “opinions” are not valuable to an honest discussion of the risks and rewards. 2. If you are worried about coming up with a 20% down payment (more, in many cases for investment homes), an easier way to do it is to rent out your current home… Read more »

Elizabeth
Elizabeth
6 years ago
Reply to  Bruce

Great comment! I was wondering about the taxes and ROI. I like your point about buying a home first. (I currently rent). I can’t see myself buying a rental property right now, but when I buy I’d like a place where I can rent out a room or two. When I combine households with the love of my life, it could then be a rental property. As for #1… I find it helpful to hear from people who aren’t landlords because it’s interesting to hear why people do and don’t do things. If people are going to accept everything they… Read more »

Bruce
Bruce
6 years ago

BTW, nice article, Holly.

Holly@ClubThrifty
6 years ago
Reply to  Bruce

Thank you =)

Fabienne Raphaël
Fabienne Raphaël
6 years ago

Rental property owner does not mean landlord. Landlord is active income, not passive. I agree. This article is useful information and I’d certainly look it up before starting a buying process. But I would also take it a step further. There are many different ways to create passive income and buying real estate is one of them. But if you become a landlrod, it is not passive at all. How to avoid that ? Choose the right management company for your building. There are many types of companies in any given market. That is why you need to choose them… Read more »

Lucas Hall
Lucas Hall
6 years ago

I’ve been an independent landlord for about 10 years, with 5 properties.

For about 2-3 days during Move-in / Move-out, I’m super busy – working 22 hour days to ensure a smooth transition.

However, for approx 9-10 months of the year, I sit back and automatically collect my rent online. For most of the time its a super passive job, but when it’s crazy, it’s crazy.

If I average it all together, I think I spend about 6 hours a month on all 5 properties.

Bruce
Bruce
6 years ago
Reply to  Lucas Hall

Great comments, Lucas. I agree with all you say. Someday you will be a “millionaire” next door!

Another landlord

Gerry
Gerry
5 years ago

It has crossed my mind often, investing in a rental property to supplement my retirement (social security). But for all the negatives mentioned in the story, and then some, I’m not a land lord. I never considered maintaining a rental property (another form of home ownership) to be passive.

Victoria
Victoria
5 years ago

If you are considering a new means of income by becoming a landlord (like I did when I reached 40) then use an online tool like https://www.ezlandlordforms.com/rental-property-investment-calculator/ to work out just how much money you can make through renting your property.

solinea cebu
solinea cebu
5 years ago

I know men and women who have had fantastic accomplishment with flipping houses but as I realize it the significant worry surrounds fluctuations in the industry. Even a fantastic investment property purchased low can then be hazardous if the market place bombs. The final factor anyone desires is to be stuck with a millstone about their neck, in particular if you’ve stretched yourself to make the buy in the 1st spot.

George Lambert
George Lambert
4 years ago
Reply to  solinea cebu

Good point on flippers. In today’s market, though, you need to put income first with growth second. Opposite what we had before the 2007 blow up. The plunge in U.S. home prices during the financial crisis should be a continuing reminder that bets on housing can sour in a hurry. So buy the cash flow – not what some seller or real estate agent claims you should pocket when selling. This strategy doesn’t depend on home values continually going up, which sets it apart from the house-flipping speculation that cost many home buyers dearly when the market collapsed. George Lambert… Read more »

Early Starter
Early Starter
5 years ago

Great article and as is usually the way – better discussion. My wife and I are fortunate enough to land two well paid jobs straight out of university so we decided very early on to invest in property. We now own 3 single family properties (3 x ~$240,000) on 15 year repayment mortgages. Our aim is early retirement so we are not bothered about seeing any returns just yet – Capital growth is key for us. We are now looking for property number 4 🙂 When we build enough capital in each of the properties we will refinance them, release… Read more »

Annelise
Annelise
4 years ago

Interesting read here. The ease of the whole rental/landlord game to me lies in these two things: (1) making your property as foolproof as possible and (2) finding a niche market of responsible tenants. Fool-proofing means durable finishes that stand up well to more than the usual wear and tear. Make the finishes in the house cheap, durable and easy/cheap to replace or refinish if necessary. It takes some upfront work, but I look to buy a shell of a house for super cheap on the foreclosure market and then redo the inside with cheap durable finishes (that still look… Read more »

Katie Ryan O'Connor
4 years ago
Reply to  Annelise

This is really good advice — thank you!!

Investor 1
Investor 1
3 years ago

Yea, so I’m 57, have (12) properties. If I get bad renters, it is mostly my fault. I’m a sucker, but I enjoy providing solid clean housing for people. I try and rent to dual income couples. Pets are a problem, small children are worse. I guess the bottom line is, build up your credit, establish a relationship with a bank, usually a local community bank, find a realtor to hunt down properties in an area within (45) minutes of your house. Typically, an area where your city or town is growing, get (3) or (4) exits beyond that. Buy… Read more »

No Nonsense Landlord
No Nonsense Landlord
3 years ago

I finally quit my job and am living 100% on rental income. It is possible, and I am doing it.

Buy properties right. Fix them up and get quality renters. Pay off mortgages.

KYLEE23TURCO
KYLEE23TURCO
3 years ago

Practical post – BTW , others have been needing a IRS 2350 , my
business partner filled out and esigned a template form

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