My husband and I are currently in a debate about which is a better scenario. The number of properties is not relevant. I was actually using Steve’s Fasttrack of 145 as a benchmark for this discussion.
Obviously we both understand the risk factor. ie 5 properties vacant under the 100k umbrella is better than the same amount under the 200k.
So here is where we both come to loggerheads. I said there is an inherent demand for rental with the cheaper properties as the rental would be lower. Therefore you get students/first time renters etc. I also put forward to him the fact that the more expensive the property becomes you are moving into a market where most people that can afford the rent may in fact be able to afford a mortgage and would therefore buy.
We were also discussing the “Renters from Hell” post by Steve. So my husband’s argument is supported by the fact that cheaper rental properties may also attract the not so favourable tenant who trashes the place or leaves without paying rent etc. This in turn would eat into your positive cashflow.
We are stuck on a few stalemates but we can’t go forward without some unbiased input on this matter.
Would appreciate other views on this subject.
much appreciated
4wallsHi 4walls
We sound as though we are at similar stages of our investing strategies, and with similar questions. The only thing I wanted to add was, don’t pre judge people without the facts.
We were also discussing the “Renters from Hell” post by Steve. So my husband’s argument is supported by the fact that cheaper rental properties may also attract the not so favourable tenant who trashes the place or leaves without paying rent etc. This in turn would eat into your positive cashflow.You don’t need to be a low income earner to trash a house, look at rock/movie stars trashing hotel rooms, cricket and footballers demonstrating poor behaviour on planes and in hotels. Tenants from hell can be found in any income bracket. So if we don’t try we won’t make any mistakes at all … but will that increase my wealth – NO.
You’ve got to be in it to win it.
Good luck with yours.
Cheers
Leigh K“If you will take on your self-doubt and laziness, you will find the door to your freedom.”
-Robert KiyosakiTheEnjolLady,
Yes, don’t mean to sound like a pompous git. I now recall a conversation I had with a realestate agent around3 years ago. A major high profile corporation had rented a house for one of its executives. He had had a major party and done some real nasty damage to the house. The rent wasn’t cheap.
I guess I just got the wrong impression from reading “renters from hell”.
No offence was meant if anyone was reading my post please.
Anyway would still love input on this argument in the fors and against. Lets delete the comment about renters of cheaper properties and their behaviour. After all, we too were once VERY low cost renters.
Many thanks and best regards
4walls4walls
I hope I didn’t imply you were a “pompus git”[
] well snobby at least[]. I really just ment don’t a.s.s.u.m.e!The other comment I was thinking about earlier was, that when you are buying in rural areas a rent of $80 or $110 is only relative. In the country rent is cheaper without any reflection on socio economic status. (It’s getting a bit late to be using such language)[
]And I also enjoyed that renter from hell story! But that is part of the risk, all investment has a component of risk, it is just how well you assess your risk that counts.
Cheers
Leigh K“If you will take on your self-doubt and laziness, you will find the door to your freedom.”
-Robert KiyosakiMy thoughts are how you can use the “tennant trashes the house” scenario to your advantage…
I know Dolf DeRoos jokes about getting comprehensive insurance so that any time he wants to get to “repair” his property for free he just moves a biker gang into his property and waits for them to “do their thing”! No disrespect intended to bikers, so much as to get the brain ticking over how this risk could be mittigated or even benefitted from… [
]Quasimodo
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We are all but half formed images of our true potential.
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] well snobby at least[
]
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