Anyone here own Real Estate as an investment?

[Syntex]

So I recently got a new job and will be making some decent money instead of just squeaking by check to check and will be debt free early next year. After I get that taken care of I was thinking of starting to put money away for retirement in addition to my 401k.

Looking at what other people invest in I came across real estate as a possible option. This seems like one of the best options assuming you do your due diligence and educate yourself in the whole process. This I find is also a bit more reliable than stocks/mutual funds since you have way more control on the situation and can still make you money even if the market takes a downturn. I am specifically referring to renting and not flipping real estate and using the properties to provide some passive income.

So BG what's your thoughts on this? Anyone actually rent or know someone who rents and can share their experiences? I would love to hear what you guys think.

[Wulfgang]

So I recently got a new job and will be making some decent money instead of just squeaking by check to check and will be debt free early next year. After I get that taken care of I was thinking of starting to put money away for retirement in addition to my 401k.

Looking at what other people invest in I came across real estate as a possible option. This seems like one of the best options assuming you do your due diligence and educate yourself in the whole process. This I find is also a bit more reliable than stocks/mutual funds since you have way more control on the situation and can still make you money even if the market takes a downturn. I am specifically referring to renting and not flipping real estate and using the properties to provide some passive income.

So BG what's your thoughts on this? Anyone actually rent or know someone who rents and can share their experiences? I would love to hear what you guys think.

Yay real estate! My quick advice for retirement investing (I'll assume you're under 50 and catch-up contributions don't apply):

1) Max your annual 401K contributions ($17,500 per year)
2) Max your annual IRA contributions; you have traditional (pre-tax contributions) and Roth (post-tax contributions) available to you here ($5,500 per year)
3) Use an investment advisor to help invest any remaining liquid capital
4) If you have a significant amount leftover after step 2, pursuing alternative investments (e.g. real estate in your case) can be fun and potentially fruitful

In the long-run, you will generally do well with a diversified investment plan that allocates capital across various asset classes depending on your age and risk tolerance.

Regarding real estate specifically, I did Real Estate Investment Banking for 5 years, have been on the buyside (REPE) for three years now, and love the asset class; that said, I still do steps 1-3 primarily with only a small amount of #4. Real estate can be a great investment, but it carries serious residual risk (I still have friends trying to sell assets that they bought back in 2007) and I generally wouldn't recommend it for someone in your position. And coming from someone who rode the market from 2007 through the crash, this is definitely not true much of the time: "and can still make you money even if the market takes a downturn". You may still be collecting a rent check, but it could take you a decade to recoup lost equity, depending on the magnitude of the market correction / crisis. I also can't stress enough how much of a pain in the ass being a landlord can be.

If you have specific questions, feel free to ask. Sounds negative, but it's really just an asset allocation issue to me; shoe doesn't fit here.

[Furionstormrage]

Wulfgang is correct. Follow his advice.

[Boyiee]

Lots of states are basically giving houses away right now.

[Buffy]

If you don't know homes either, I'd shy away from real estate.

Do you know how to recognize:

If the slab has shifted?
If the foundation is leaking?
The difference between 120 amp service and 200 amp service?
If the roof has been patched?
Are those cracks in the drywall from the house settling or a bad drywall job?
The age of the HVAC system?

Every one of the above situations has cost me money in the last 15 years.

[Quixon]

After hearing the horror stories from a few of my friends, being a land lord is the last possible thing I'd ever want to do.

[Furionstormrage]

My father in law has two small rental homes. Granted, he deals with low income renters, but man they trash the place. I do not want that headache.