Entertaining the Thought of a Rental Property

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A lot of PF bloggers out there either already own rental property, or are looking to invest in a rental property.  Owning a rental property has been something that I’ve always considered.

Background

Back about 5 years ago, when I was still a student, I befriended my land lady, and she advised me to own real estate as soon as I was able to afford it.  She also offered to share her experience and help me out with getting started.

A month after I started my full-time job, we got together for dinner and I raided her brain on what I needed to know to get into the rental market.  I walked away from our conversation excited and scared stiff.  At that moment, I really wasn’t ready to take the risk that came with owning a rental property and the real estate market.

But I also came away with it knowing that in order to make anything happen, I needed to save money.

My PF Journey So Far

Shortly after my meeting with my land lady, I started to think more about where I wanted to be financially.  Even if I couldn’t get into the real estate market, I wanted to figure out my finances.

I paid off my student loans, and started to read PF blogs.  I learned about investing and what an RRSP and TFSA were and maxed out my company match every single year. I learned to track my expenses (using this awesome tool!) and started my own PF blog to share my journey and keep me on track to financial freedom.

Why I am Thinking About a Rental Property

I’ve spoke with quite a few individuals who currently own rental property. I asked them about how they do it, what they look for, and I’ve had pretty positive feedback.   These are individuals who do their research and take a calculated risk when they think it’s worth it. It seems very do-able.

As you know from my monthly budget recaps, I spend very little money on rent, every month.  Especially for living near the city!  I try to have a bit of fun, but also funnel extra money into my investment and savings.  It took me  a while to get comfortable with buying RRSP, and TFSA for my investment portfolio.  I was so scared that I would lose all my money!

With a rental property, I’d approach it the same way.  Similar to how I approached my investment portfolio, I want to do my research first, so I can make a decision that is within my risk tolerance and comfort level.

What are your thoughts on investing in rental property real estate?  Do you have any experience owning any rental property?

Cheers,

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9 Comments

Filed under Finance, Goals

9 responses to “Entertaining the Thought of a Rental Property

  1. Ugh. I’ve had so many awful experience both with landlords and with fellow flatmates that I am really put off it all.

    For some reason Kiwis love investment property even though many are cashflow negative.

    Investing in property has never appealed to me, though T is a lot keener on the idea than I am. In Auckland, I reckon we’ll be lucky to get on the ladder with a house of our own, let alone an investment property.

    There are heaps of great resources out there and I think as long as you approach it the right way – logically not emotionally, taking into account factors that will appeal to renters, not necessarily yourself – you’ll be fine.

  2. I don’t have rental property experience so much as I have a home that I’ve had friends live with me in. Given the poor behaviour I’ve seen out of some of them you’d think I’d be scared to own a rental property, but I’m not. What I’d like to do in a few years is sell my home, and downsize to two smaller condos. I’d live in one and rent the other. I love the idea of secondary income, and once the mortgage on that one is paid off I can take the rental money and put it towards another rental.

  3. I would love to eventually own rental property, but not until after I owned somewhere that I would live in. I think it’s a good investment, especially long term, but there are certainly some downfalls to being a landlord.

    My mom and stepdad own a rental condo and it’s difficult for them to keep up with renters, but there are also agencies for that!

  4. I am no where near a place where I can handle being a landlord, but I’ve definitely entertained thoughts about doing it. Right now I’m on the fence. Sometimes it seems like easy, passive money, and other times it seems to more of a hassle.

  5. I’ve often thought about one – I have my own apt which I rented out when I moved away briefly for grad school, and it was such a pain that I’ve kind of shied away from doing a rental property. However, with depressed real estate prices (though they are coming up) some can be a great investment!

  6. mochiandmacarons

    Thanks for the plug :D

  7. Real estate investing (rental property, and flipping) are my dream jobs. That being said, you have to be very, very, very thorough on your interviewing potential renters.

  8. To give you an honest answer, it depends on your local market. Look at the rent v own in your own local market and start doing the math.
    I am a REALTOR in a college town in Texas. Since our rental market has such high demand, it is MUCH more affordable to own here and therefore, owning rental property is an excellent investment avenue. I put down very little on my own home and yet market rent on it is almost DOUBLE my house payment(taxes and insurance included)!
    Feel free to email me anytime; I would be glad to do a guest post to answer FAQs if needed.

    Carol
    antiquetexan.blogspot.com

  9. I’d always planned on owning rental property but only after sorting my primary residence, so really I feel quite behind in that aspect of my life and financial plan. It’s not the worst thing ever, I’m just aware that if I’d made a wise rental property decision, it’d be another income stream to fill out my portfolio.

    I don’t like being wholly dependent on savings and a job, it feels too unstable.

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