Thanks for visiting my site! All you say is true, and clearly I don't try to hide or sugarcoat any of those issues on my blog. In fact, I try to be as transparent as possible, since my goal is to build trust and credibility over the long term with my readers and clients. Allow me to make a few points in response. First, all day-to-day work in my portfolio (including evictions) are handled by my property managers, so the actual work I do on the portfolio amounts to no more than a few hours per month, mostly communications with my managers. Second, despite the ups and downs of the business, my cash flow is quite reliable on an annual basis. I publish a detailed annual report showing the full financial performance of my properties to illustrate that. (Scale in a portfolio helps to even out the inevitable bumps at any one property; I have 25 properties, so there's nearly always at least one "problem" somewhere in my portfolio, but the overall picture is fine.) Third, leverage in rental real estate is very low risk if you stick to 30-year fixed rate mortgages. People get into trouble when they venture out of that lane into riskier loan products. In fact, the ability to get 30-year fixed rate loans is one of the things that makes rental investing so lucrative. Fourth, historical data attests to the fact that rental demand is quite recession-resistant, and rents are remarkably stable and almost never go down materially. You say rental investing isn't for the faint of heart. I suppose that's true, but no more true than it is for stock investing, which I assume is much more familiar to most Humble Dollar readers. Smart stock investors know to expect wild swings in the market, but the best strategy is to hold on for the long term, even when the dips are gut-wrenching. The same thing is true with rental properties: there are plenty of ups and downs, but if you hold on for the long term, you're very likely to do well.
Yes, that's true (though it's nearly all in sweatpants, which most would not consider a normal work week. ;-)
But my busyness is actually the point of the article: it comes as quite a surprise to me, and does not align with what I expected at the outset of this experiment. Which is perhaps instructive for others considering retirement (at any age).
I think it's easy to get hung up on the word "retired". It's a word that comes with a lot of baggage and associations (which is why I frequently put it in quotes when I write about it). How about we just say I quit my first career and started a new phase in my personal a professional life, in which I have more choice, freedom, and flexibility? There, fixed it. ;-)
Fortunately, I still have a decent amount of earned income through my coaching business and my bookkeeping side-gigs, so I'm not giving up anything in social security benefits at this point. Even if I were, it wouldn't be my main focus, since I intend for my investments to provide all the financial security I need in old age.
Comments
Thanks for visiting my site! All you say is true, and clearly I don't try to hide or sugarcoat any of those issues on my blog. In fact, I try to be as transparent as possible, since my goal is to build trust and credibility over the long term with my readers and clients. Allow me to make a few points in response. First, all day-to-day work in my portfolio (including evictions) are handled by my property managers, so the actual work I do on the portfolio amounts to no more than a few hours per month, mostly communications with my managers. Second, despite the ups and downs of the business, my cash flow is quite reliable on an annual basis. I publish a detailed annual report showing the full financial performance of my properties to illustrate that. (Scale in a portfolio helps to even out the inevitable bumps at any one property; I have 25 properties, so there's nearly always at least one "problem" somewhere in my portfolio, but the overall picture is fine.) Third, leverage in rental real estate is very low risk if you stick to 30-year fixed rate mortgages. People get into trouble when they venture out of that lane into riskier loan products. In fact, the ability to get 30-year fixed rate loans is one of the things that makes rental investing so lucrative. Fourth, historical data attests to the fact that rental demand is quite recession-resistant, and rents are remarkably stable and almost never go down materially. You say rental investing isn't for the faint of heart. I suppose that's true, but no more true than it is for stock investing, which I assume is much more familiar to most Humble Dollar readers. Smart stock investors know to expect wild swings in the market, but the best strategy is to hold on for the long term, even when the dips are gut-wrenching. The same thing is true with rental properties: there are plenty of ups and downs, but if you hold on for the long term, you're very likely to do well.
Post: Not What I Expected
Link to comment from November 8, 2023
Yes, that's true (though it's nearly all in sweatpants, which most would not consider a normal work week. ;-) But my busyness is actually the point of the article: it comes as quite a surprise to me, and does not align with what I expected at the outset of this experiment. Which is perhaps instructive for others considering retirement (at any age).
Post: Not What I Expected
Link to comment from November 8, 2023
I think it's easy to get hung up on the word "retired". It's a word that comes with a lot of baggage and associations (which is why I frequently put it in quotes when I write about it). How about we just say I quit my first career and started a new phase in my personal a professional life, in which I have more choice, freedom, and flexibility? There, fixed it. ;-)
Post: Not What I Expected
Link to comment from November 8, 2023
Fortunately, I still have a decent amount of earned income through my coaching business and my bookkeeping side-gigs, so I'm not giving up anything in social security benefits at this point. Even if I were, it wouldn't be my main focus, since I intend for my investments to provide all the financial security I need in old age.
Post: Not What I Expected
Link to comment from November 8, 2023
Thanks John! For me, "clearly written" is high praise indeed. ;-)
Post: Not What I Expected
Link to comment from November 8, 2023