Owning real estate in America = Overrated?

[Contrarian Expatriate]

As far as investing in houses to rent out goes, I've heard of too many horror stories about tenants not paying and trashing the place before being evicted. My dad rented out the house which I had lived in for the first few years of my life. The first two tenants were great and always paid on time. His third tenant always paid late and then finally stopped paying altogether. When my dad had the tenant removed, he went into the house and found big holes knocked in the walls, buckets of paint poured on the floors, lighting fixtures ripped out of the walls, one of the toilets had a big crack in it, among other damage. After spending over $10,000 on repairs, he sold the house and vowed never to be a landlord again.

I used to own some rental units. Would never do it again. The property managers can be as big a headache as the tenants. Total crap shoot.

I 100% agree. I am all about private equity real estate now whether it is thru equity crowdfunding like Fundrise or real estate syndications that pay each month.

[jamesbond]

Real estate prices continue to climb in desirable areas thanks to a housing shortage.

My real estate agent said there has been a housing shortage since the housing market collapsed in 2008. Now with the corona virus and millions of people out of work, expect the housing shortage to continue indefinitely.

[CannedHam]

As far as investing in houses to rent out goes, I've heard of too many horror stories about tenants not paying and trashing the place before being evicted. My dad rented out the house which I had lived in for the first few years of my life. The first two tenants were great and always paid on time. His third tenant always paid late and then finally stopped paying altogether. When my dad had the tenant removed, he went into the house and found big holes knocked in the walls, buckets of paint poured on the floors, lighting fixtures ripped out of the walls, one of the toilets had a big crack in it, among other damage. After spending over $10,000 on repairs, he sold the house and vowed never to be a landlord again.

I used to own some rental units. Would never do it again. The property managers can be as big a headache as the tenants. Total crap shoot.

I know of two people who are/were involved in rentals.

One did it in addition to his full time job as an actuary. Eventually sold his three rentals at a $50k loss because he was so fed up with being a landlord. It took him 6 months to evict a nonpaying tenant once. One of his former tenants trashed the place causing $10k of damage. And this guy had two small kids on top of a full time job.

Another guy I know does it as his full time job. He knows the tenant/landlord laws inside and out so he doesn't need to consult a lawyer every time there is a dispute. His wife does the books, taxes, showings, and processes payments. He does like 80% of the repairs himself. Financially he does very well, but he works very hard, long, and irregular hours.

[CannedHam]

Real estate prices continue to climb in desirable areas thanks to a housing shortage.

My real estate agent said there has been a housing shortage since the housing market collapsed in 2008. Now with the corona virus and millions of people out of work, expect the housing shortage to continue indefinitely.

That's what we are seeing here as well.

2008 was a different beast because the oversupply of housing was part of the reason the whole economic downturn happened. A lot of those properties were bought up at bargain prices 2008-2012 by large landlords and have been converted to rentals ever since. That plus the downturn in new construction has caused prices to skyrocket starting around 2018 over here.

It's going to take a lot for prices to come down. And now there are more programs available to prevent foreclosures (eg mortgage forbearance).