Posted on 08/26/2005 5:55:38 AM PDT by grundle
but you have to consider you are building equity no matter how much it costs. Tenant rental income is income no matter how you look at it.
You instantly get a $10,000 (or so) raise AND you use it to reduce your mortgage payment (at least mentally) by 1000 a month.
For more tenants, more income. And they figure tenant incomewhen you apply for a mortgage- so you qualify for a bigger loan.
It is worth it- I have 12 units now ($1.2 million in assets) and I hope to have 100 within 10 years
Thats $10 million in equity if they do nothing but break-even every year.
i've seen this with a couple of my friends. one was married with 2 kids, had a barely functioning van, lived in a rented house that was perpetually months late in rent, got welfare assistance for food, housing, and cash as well, would work just often enough to keep welfare coming in and get the huge tax refunds for his kids, but he had the big screen tv, playstation 1 and 2, his cell fone, satellite, x box, tons of dvds, and always a couple cases of beer in the fridge.
the other had opportunities for a decent job, but only worked 3 months out of 4, lived with his sister, who worked even less, and they got welfare, were always a month behind on rent and were getting something different turned off every month, but had the projector, the ps2, couple of computers (broadband internet almost never went off) and all the alcohol and pot they wanted. but this was how their mother was too. she was union and had good money coming in, but somehow never had money for bills, yet could pay for all her toys.
me? i learned my lesson watching them, as of next month my only debts are my house and my jeep (last credit card payment goes in the mail in a week), i make enough money to pay for everything i need, plus some extras (satellite and dsl) i put away 1/10 of my income to retirement and save 1/8 for emergency, and don't buy anything i can't pay for in cash. maybe i don't have all the cool toys that some of my less paid friends have, but i never get shut off notices.
I live in a middle class neighborhood, homes ranging from $135K to $170K and don't see any of that.
Though 2 of my neighbors have custom bikes from West Coast Choppers.
Your right, right after I posted that I started doing the math.
I just would not be able to get a second mortgage on a rental property.
Although, I never really looked into it much, maybe they would give me the money.
My assumption was that you needed a lot of equity to secure a second mort.
All you need for another mortgage is a down payment- if you buy a double then the rents for two units pretty much covers the entire mortgage.
Keep doing this till you have a few dozen units and you are a rich man.
Oh and my favorite saying: "If it was easy, everyone would be doing it"
Why in the world would you ever rent to a 'cracked out gang mommy' in the first place? I don't know about MA law but, here in CA, you aren't required to rent to anybody who happens to come along.
I'm definitely not an elitist.
This thread is strange - judging people with no money for spending what little they have on TVs. They can't take vacations, can't afford gas, probably don't have a nice place to take a walk. Most probably don't like to read. They rent so they don't spend time fixing up their place. It's depressing, yes, but very understandable to see how a TV would be most desirable.
Sorry.
I misunderstood your post.
I do that sometimes unless I get help.
I am with ya 100%. So are those paycheck to paycheck loan places I see all over downtown.
I am not judging anyone. All I was saying is I have never owned a large screen TV. Books are my vice!
Ten years ago a 32" TV *was* a big screen!
REMORSE
A painful sadness
Can't fit big screen TV through
Double-wide's front door
Yup and 10 years ago my TV was a 25" :-)
On that one, I will note that those cars depreciate madly fast. If you can do your own work, buying a used one and doing your own maintenance and repairs is a way to get high-end European motoring on the cheap.
I love my '99 A8.
Now, if he bought it new off of the showroom, he was crazy.
That's just half of it - because if you are not buying the goodies, but are instead putting the money away for retirement - just wait until you retire and they don't have the money to retire because they've spent it. Your money that you sacrificed to save will be "redistributed" to help those people, regardless of the fact that they bought instant gratification goodies instead of saving. Ever think that maybe "those people" are the smart ones?
My FIL has been on that plan for 40 years+.
He retired from his day job about 6-7 years ago (lab manage at his local hospital). His 2nd job was his rental empire.
He now has 30+ small rental houses that probably average in the $50-$60k range, most of which are paid for.
We've got two, that make nice line items in the investment portfolio. One is paid for.
Those places are especially odious too - they make a fat living here and in Norfolk, hoovering money out of 18-year old military enlistees and their families. I suppose they're there if you've got nowhere else to turn, but too many kids get in trouble just by virtue of their inexperience.
As long as they are spending their money and will never spend mine I couldn't care less what they deem desirable. But, if they are going to rely on me for present or future income, I should have a interest in what is "desirable". And investing in improving their job prospects or income (training, education, investing in a CD) is what I would call desirable.
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