Does anyone live off rental property while full timing?

If you've been managing it yourself, you need a property management company to take over in your absence. My experience, it is a job, depending on extent it can be a full-time job, and if you are not there to do it, the job doesn't take care of itself. It doesn't take long for tenants to trash your property, and even the best tenants have demands that need immediate attention.

Finding a good property manager? That's another question.

I'm not so sure about selling off. I would almost rather donate and take the tax write offs. But I'm in a really bad market, the bubble burst 30 years ago with an industry collapse, and again 10 years ago when the last big employer left town. I'm holding some properties with actual market value less than 1/5 of what the county assessor puts on them. Some things are just local, I know nothing about your market.

FWIW and in case you can glean any ideas from it:

We built our net worth through properties over 30+ years, to enable us to retire, not being entitled to any form of pensions! Bought building lots, built and sold, renovation business and bought revenues to rent out etc etc. We sold our last revenue in May 2005 (had enough dealing with vacancies whilst trying to find the "right" tenants, and then the "hard luck" stories and lack of respect how they treated our properties). Then in Apr 2006 our market was going ballistic, so we ordered a condo to be built for eldest daughter to live in and pay reduced rent than market rate = worse thing we ever did, as took two years to deliver in July 2008, by which time she was onto different things and the wheels had fallen off the economic bus so to speak = negative equity. Finally sold it this August 15th, after being 9 months on the market for $50K less than we paid for it (ouch, can you feel we're hurting after a decade of ownership!). Anyway, long story short the times and real estate market places are a changing, and we too have seen how little attention property managers place on looking after others rental units for the most part - think of them operating on a "numbers game". If we can't be hands on ourselves to manage it, and in more confident economic times whilst doing so we are so glad and relieved to have now sold the last two this year. There's a lot to be said about peace of mind at times over money we've ascertained, especially as we've got older, more cynical and burnt a few too many times. Believe me for us the relief versus the tax bill we had to pay was worth it. Feels great right now.

We are trying to sell our last property (going on the market 17th Oct) in Fla, and then for a little higher return than we'd get in the banks, we're going to carry interest only, on our main acreage for our youngest daughter and her soon to be husband. They are going to save the difference they'd be paying down on a mortgage as principal and then as and when they are comfortable they can at any juncture apply for their own mortgage and buy it outright from us at the price as if we'd sold it to them today. Really doesn't matter, as when we get called to the old pearly gates she'd get it all anyway. In the meantime the money they pay us as interest (more favourable than bank deals) gives us more than if we'd put it in the bank on a full sale basis, and they get a better deal than through the banks financing commitments etc. WIN-WIN.

The rest of our savings/accounts we are putting into a self directed "Couch Potato" set up, with a goal of returning at least a 4% return ideally but average 5 & 10 year returns has been showing much much higher than that including considering real lower returns the past couple of years. So ........ there's never any guarantees on anything in life, but we are seriously of the mindset after getting over the disappointment on low interest rate returns, that "peace of mind" being debt free, and property maintenance/billing free is priceless.

Good luck Joel on whatever you decide moving forwards.

FTW.

You will pay a lot of taxes if you sell off.
We use a propery management company. They do a good job and more than earn the 10 per cent of gross rent they charge. The best part is their access to carpenters, plumbers, electricians and whatever Handyman you may need.

Thanks for the replies. It seems that the consensus is to sell off . If I cash out, I can't think of another investment that has built-in inflationary increases both to the principal value and the income.(rent)

I have one rental property and if I wasn't local to it, I would use a property management. Hard to do anything long distance when you are on the road.

Find a respectable one... usually some real estate agents/offices also do rentals. Generally 10 percent of rent. Tack it on to the rent and no impact from a monetary perspective, until they don't pay. I suspect the rental agency will take their 10 percent regardless, so be prepared for that.

Mike

hotjag1 wrote:
I had 5 rental houses for about 15 years. Everything went pretty well during the years that I was working because I was close by and always in the near vicinity of the rentals.

When I retired, I informed my renters that I would be in the southwest during the winter months. I was amazed at how many of the renters started having "hard luck" problems and were going to be late on the rent when I was gone for the winter. They knew I wasn't going to drive 1500 miles to try and collect the rent if they were late, or try and do a long distance eviction.

I started selling the houses one by one until I got rid of all of them. In other words, being an out of area landlord didn't work for me. I've heard every excuse in the book concerning hard luck stories and being late on rent. It tripled when they knew I was out of the area. I would suggest getting a property manager, or sell them.

EXACTLY X2

We did for 10 years. We had 5 duplexes and had 9 apartments rented. We did everything ourselves, but had a tenant who collected rent and took care of small stuff. If it wasn't something he could fix, he had phone numbers to call. That worked okay for us. We, however, did all the renting, so if someone moved out during the winter months, it sat empty till we got back. It worked well, but as we got older, we didn't want to do that much physical work and we also wanted to travel more in the summer.

We started selling off 3 years ago. Sold 2 one year and 2 the next, all to the same family, all for cash. Easy peasy. We have one left, the one we have used for storage, etc. We are going to work hard at getting it cleaned out this next summer and ready to sell. Same buyer wants it as well as the tenant in the back apartment, so still have a cash buyer in the wings.

We were very reasonable on our rents so didn't have problem tenants. Didn't want to use a property management outfit. Saw apartments where they were involved and they didn't take the care we did with ours. We wanted to maintain the care and quality of our units. They still look nice.

It can be done, but I have to say. . . it's a liberating feeling to be done with it. This summer we visited with the family who bought all of ours and they were complaining about all the work they had waiting for them. . . Better them than us! We put the money in investments and can draw as much as we need out every month.

Dale

I have a handy man who does it all. works ok. we don,t tell any body but him where were going, but my people are all long term renters in the ten plus year range most fix things themselves. if you got good people? go for it.

I had 5 rental houses for about 15 years. Everything went pretty well during the years that I was working because I was close by and always in the near vicinity of the rentals.

When I retired, I informed my renters that I would be in the southwest during the winter months. I was amazed at how many of the renters started having "hard luck" problems and were going to be late on the rent when I was gone for the winter. They knew I wasn't going to drive 1500 miles to try and collect the rent if they were late, or try and do a long distance eviction.

I started selling the houses one by one until I got rid of all of them. In other words, being an out of area landlord didn't work for me. I've heard every excuse in the book concerning hard luck stories and being late on rent. It tripled when they knew I was out of the area. I would suggest getting a property manager, or sell them.