I'm about to accept a very fine job that will pay me about 150,000 a year. I'm 26.
The hours will be awful but the money is(?) worth it. Only problem is that I'm going to hate every second of it and will constantly be dreaming of a scenario where I can finally be done with typical professional services work and have the time to do what I want. I don't even know what that is, that's how little time I have.
I've hatched a plan to become a mini real estate mogul, and live off rental income, buying 1 or 2 shit properties a year in a good city with consistent college/white student rentings. Each house would cost around $200,000 which I could easily afford down payments on with my salary. After accounting for mortgage costs taxes etc I would net about $500 a month in rent per property. I don't live that large, I'm single and will be working in a bumblefuck town with nothing to spend money on.
I figure by the time I've worked ~8 years at this job, I could have purchased about 15 of these meh-tier properties and would be banking about $7500 a month on rental income alone, which would permit me to quit my job and figure out what I want to do in life with some financial security.
My concerns are: banks, how will I convince a bank to give me not one but essentially 15 mortgages, and all of the other concerns about housing, rental markets, fucking 3D printers creating houses now.
Is this doable? Are there any other good ideas for someone like me with a high income who wants to invest right now in order to achieve hopefully lifetime financial security?
>by the time I've worked ~8 years at this job, I could have purchased about 15 of these meh-tier properties
Property would have gone up in value during that time, likely faster than your wages but so would the rents on the properties you'd have. Just something to think about.
>how will I convince a bank to give me not one but essentially 15 mortgages
Idk where you are from but in the UK banks lend on a what is called "rental cover". Which means that the rent each month, has to cover the mortgage each month by a certain amount. I think a common number the banks ask for in the UK is 125% of the mortgage payments in rent each month.
Samuel Anderson
Why not go talk to your bank directly? Put together a plan and propose the idea to several different lenders. They probably deal with people with the same idea on a daily basis.
I would be very careful of which houses you buy user. Also rent the house to several college kids at a time so you can collect $500/each room a month instead of $500/month. So you'd gross $1,500+/month instead of $500.
A lot of people who do this buy shit tier houses, stick $30k in them, and viola! Rental property.
Gavin Wood
After 1 mortgage, you will start getting shittier mortgage deals, start with 1 or 2, or better yet.... Try a 2-4 unit, and live in one.
Joshua Hill
How will you have the time to manage 15 properties?
Brandon Powell
Do you work for California University or government?
Aiden Ward
500$ for a month in a HOUSE? In my city you pay 500€ for a 1 room apartment.
Charles Bell
>tfw im in my grandmothers will to get her rental property >tfw she's 90 and still wont die >tfw im literally waiting on someone to die to start my life
Hudson Flores
I'm saying NET $500 after all expenses
Management companies at some point probably
Elijah Bailey
No
I plan on buying properties which have been recently updated and look somewhat modern. For my market I can typically get a 3-4 bed townhouse usually with somewhat newish interior for 200,000 to 275,000 and can typically demand a 1,600+ per month rent on it. Since the mortgages + taxes will be around 1,100 I'd profit about 500
Jaxson Young
500 a month isn't a lot of money. You could work part time at walmart and make that.
But it is free money so if you can live on that then more power to you.
Adam Hughes
No 500 a month isn't a lot. But my plan is to own ~15 of these properties and make it 7500 a month. For free, mostly.
Juan Green
What job did you land?
Michael Thomas
Landlord here - make sure that if you buy a property, the rent is about 1% of the total cost of the property. So, for a 200k home, the rent should be 2k / month. If it's not, don't buy it.
Also, you won't be able to get 15 mortgages just straight. the legal limit is 10 per person. And the bigger banks will not give you more than 4. So, find a good, flexible lender. (You can go past 10, but that requires a different kind of loan)
Also, I wouldn't quit until you have at least 1/3 to 1/2 of all properties paid off in full. A couple of longer vacancies in your properties could change that +500 per property to a -1500 per property in the blink of an eye.
Also, don't buy shit properties. A cheap deal is NOT a good deal.
But, otherwise, it's a good plan.
Also, get on biggerpockets.com and learn
Eli Robinson
I'm a lawyer. Some lawyer jobs pay really well, some pay shit.
I'm about to transition from a shit pay job to a well paying one
Jackson Gomez
Why not just bank as much cash as possible and invest it conservatively, live frugally. You will always underestimate the cost of homeownership and hassle dealing with renters, and college students on top of that? wew.
After 10 years or whatever you could have enough to live on investment income without headaches, retire to some tropical paradise on the cheap. You can just buy citizenship in some of those places now, globalization.
Samuel Evans
There's so few guarantees with investments that I don't want to risk it.
Rental income at least comes with a year long contract that (largely) guarantees payment at a certain rent, which lends some short term stabilty.
What happens in a down investment year if i just invest? I eat into my savings?
I'd rather stick with housing. Population will increase, millennials will be a significantly renting generation, I don't see how a sustained housing crash happens. Housing will trend upwards regardless of occasional blips.
Connor Ross
You need to look at the shiller housing Price index...
Jack Bailey
Hi can I ask what your job is OP?
Henry Bell
Why does everyone interested in being a landlord seem to have no knowledge of investing or finance?
Matthew Turner
Why does everyone who goes to threads about landlords assume the people have no legitimate reasons for preferring real estate to investments?
Brody Watson
Sounds like a plan man, but something with renting in a nice area to students.
Think about it. If that neighborhood has money, the neighbors are gonna litigate the shit out of you for having college kids around their area. Try emerging areas, areas under revitalization.
