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I May be a Landlord by Year’s End

by My Journey to Millions

I have thought about owning rental property for a few years.  Other than in a goals and objectives post I never mentioned the desire on the blog, because it never felt like an actual possibility.

The first problem is that the pure cost of purchasing an investment property on Long Island would be significant. I am not sure where they get their numbers, but one estimate has the median house price on Long Island at $364,000! Even a 15% down payment could buy a house in other parts of the country.  This problem probably would have taken care of itself with a few partners (I had some buddies already express interest).  The second real problem is that I am worthless when it comes to home repair.  Unfortunately, the aforementioned buddies are also worthless, and worse yet, we are all very busy.  As such, almost every repair would need a professional.

Notwithstanding, these very two major speed bumps I believe that one day I’ll own an investment property or two on Long Island, however, that may be years away.

So…how am I going to be a Landlord by Year’s End?

My brother-in-law is a very talented contractor outside Philadelphia.  Him and another contractor buddy were talking about how they wanted to diversify their income and thought owning property would be a good opportunity to do that since they can fix any problems that may arise (eliminating one concern).  However, they don’t have the cash or the credit (since they are both self employed with short histories)…but I have both of those things!  Well cash not so much of but I have investments that I can liquidate.  The other concern noted above is also eliminated so the prices I saw were one-half of Long Island prices.

I don’t have the answer yet as to how the logistics will work, but I do know it should be an interesting year!

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Lazy Man and Money 02/27/2014 - 10:02 am

Sounds like all the pieces are falling into place. I am worthless when it comes to fixing things. That’s why I found a good handyman. It eats into the investment, but depending on the condition of the property, you might not need him that often for at least a few years.

Evan 03/02/2014 - 10:42 am

We’ll see! The first thing I need is the brother in law to find a place since I don’t know the alright places within the town we are looking.

Larry Ludwig 02/27/2014 - 1:11 pm

that could work very well. I’m trying to find good deals in the LI area and it’s been very diffcult.

Evan 03/02/2014 - 10:44 am

What areas are you looking into on LI?

Blinkin 03/01/2014 - 9:41 am

I have a love-hate relationship with investing in real estate. On one hand, I’ve seen a lot of people invest in real estate successfully. But, most of these people started growing their empire decades ago.

Whenever I get the itch to become a real estate investor, I remind myself of the available REITs out there and the liquidity that they offer as well.

I’m going to live vicariously through you. Definitely keep us posted on your progress.

Evan 03/02/2014 - 10:49 am

Thanks! I go back and forth on the subject…I have for years. I think what makes this opportunity so interesting to me is that it alleviates two of my biggest fears.

I have seen my dad struggle with some ridiculous tenants and it has really made me a cynic but like you I have seen so many run their real estate the right way. As far as the decades part, it would seem to me that the rental world would be supercharged (b/c of built in leveraging) as compared to passive income from an investment account (dividends or reits)

Ben 03/09/2014 - 5:28 am

Exciting! In guessing you intend to manage the property yourself too?

It would be cool to see the returns on investment comparing self management and using a property manager/professionals

Evan 03/17/2014 - 2:15 pm

“Exciting! In guessing you intend to manage the property yourself too?”
– I would have the brother in law handle the managing of the property as I’ll be a few hours away.

“It would be cool to see the returns on investment comparing self management and using a property manager/professionals”
– I will call for prices before I sign with the brother in law b/c for the most part that is what he is bringing to the table. If it is $20 a month to manage the property I wouldn’t make it a 50/50 split!

Ben 03/17/2014 - 4:03 pm

In Australia, where I used to live, property managers charged about 8% of the rent.

I suppose though that your brother in law will be providing other ‘handy’ services such as fixing things at no cost. A substantial saving compared to hiring contractors.


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