Re: this is a whole new world to me - Posted by Sean
Posted by Sean on June 07, 2005 at 08:40:14:
You have the basics right, but there are lots of details… Yes, you can buy a property, rent it out and the renter will pay down your mortgage over time… However with that property and tenant come things like Management and Upkeep of the property, screening and finding tenants, managing the tenant, getting your check out of them every month… Vacancies, evictions, etc etc etc…
Now housing is tight in the Bay Area, so finding a strong tenant is probably not as tough there as it is other places, but its still an issue… its also an area where home prices are getting beyond the price most folks can afford to pay… which I don’t care what economist says what about it, that’s usually means the markets going to go down… now long term holding it doesn’t matter as much, because eventually property values go back up and your mortgage will continue to pay down. The down side can be when the market slows down so much that your rent isn’t enough to cover your mortgage and taxes, let alone maintenance and other issues.
I know a family who is in the service, and they basically bought a fixer upper everywhere they were stationed. They would buy it, fix it up, live there, and when they were transfered would rent it out, and buy a new fixer upper in the new place… they did this every time they were moved. They retired after 20 years in the service with a small but respectable portfolio and cashflow, as well as his pension.
The plan is very solid and does work, but it is work… not 9 to 5 perhaps, but still work.
Thank you for your service, and don’t let the ignorant folks like Asparuh get to you… Ignorance is bliss, and love is blind… its not your issue some folks are burdened by both.