Posted by Ronald * Starr(in No CA) on September 16, 2003 at 09:58:00:
I think your question is impossible to answer. By analogy, would you ask this question: “How good do used cars run?” “Can I buy a used car and be sure that it will work well over the next few years?”
Just so, some people make very high returns, some do not.
Besides, you are comparing having a job to having an investment. The two are different. What if I tell you that a typical rental house, bought with positive cash flow has at least 20% annual return, which is probably true. Compare that to what your friend is making. Then ask yourself, how many hours a week would I have to work on the real estate investment? The answer: an average of about 1. But, it will be lumpy, with most weeks it being 0. Some weeks it will be 10 minutes, to deposit the rent check at the bank. And some weeks it will be 60, as you prepare to rerent the property and are showing it and checking out rental applicants. But, on average, about 50 hours a year.
Make you decision not on the expected return. Ask yourself what you want to spend your time doing. If you have an activity that you enjoy doing, you will put in the effort to make it successful. You can figure out how to improve the income prospects once you have found the activity you enjoy doing.
Most people who get excited about the money-making prospects of real estate drop out in about 2-4 months, 6 months top. They are not really interested in the field or the activities. Those who are successful in real estate investing often “love it,” or at least like it.
Good Investing*Ron Starr