Comment by jjav
3 days ago
> 3 months of rent covers a year of property taxes where I live. Major repairs are about a couple months rent. There is still another half year of rent that’s pure profit.
You missed insurance and mortgage.
3 days ago
> 3 months of rent covers a year of property taxes where I live. Major repairs are about a couple months rent. There is still another half year of rent that’s pure profit.
You missed insurance and mortgage.
Fair. Mortgage during the ZIRP days and prior was really low though. A 3K mortgage then is like a 6-7K mortgage now. And home insurance is also relatively low, I pay like 1.5K for the whole year. Point is, it’s a great way to make money and that is why people become landlords.
> Point is, it’s a great way to make money and that is why people become landlords.
If it is, why not do it and become rich too?
It's not really a particularly good way to make money. I've run the numbers on hundreds of properties over the last two decades and I've yet to find a scenario where I could buy something and rent it out with enough profit to be worth the hassle. You'll be much better off investing in some index fund instead.
> If it is, why not do it and become rich too?
If I had the capital I absolutely would have. It’s a bit worse now but any property you bought pre-covid (at least in big cities) can be rented out for more than what mortgage costs. I remember looking at houses in the Bay Area and the monthly mortgage would be 3K while you can rent it out for 4-5K. Anyone who owned property in the 90s and early aughts are absolutely rolling in it. You can invest the profits in an index fund on top of it.
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You're assuming a mortgage.