Madison MoneySports - Personal Finance Thread

[D_Eclipse9916]

I'd ideally like to get to a point where I'm maxing out my 401(k) and roth and also donating a flat rate of 5% of my annual income. I attempt to get into investing every few years and sock a bit of money into an index fund but I think I'd rather get into real estate investment right now. I've been thinking about doing it for a few years but buying property and renting it seems like a better long term investment. It's been good for me and my first property anyways.

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Property investment is a lot of work.  Not quite as passive as I had hoped as I have had lots of turnover this year.  Profitable? Yes, charging 90 day termination fees and then having someone move in the day after has been really good this year; but its taken a bit more time.

Real estate is REALLLY long term and fraught with expense and the first couple years are lean.  Excluding termination fees I am netting ~8% this year on my original investment after expenses, 12% including termination fees.  This is including having to replace a pool (although I did negotiate 90% of it into a reduction in sale price), a dishwasher, and a washer/dryer between my properties.  Plus your mortgage stays relatively flat while rental prices increase. 

I have found though that it would take a hell of a lot of properties (and far more than I can get mortgages for) to really make it a day job.  It is a great diversification for your retirement though instead of having your entire nest egg in the market.