I'm 30.
As of 12/5/2013 I own a duplex that is rented (tenants downstairs, me and room mate upstairs). It covers 90% of the mortgage.
I have killed my clown car habit (sold vehicle I had loan on, have much cheaper AWD car with decent MPG).
My GF and I are getting more serious, as is my room mate. He would like to rent out the entire upstairs, and my GF would like me to move in with her. This is +$300 / month on the duplex rent, and -$0 to her. We've discussed how I will manage her duplex and provide handyman type work in lieu of the rent.
I have $200k in investments; 401k, IRA, rIRA, etc. My taxable accounts are producing $500/ month in dividends, which is reinvested in various index funds. I do pick a few stocks from time to time (AAPL, FB, mostly tech and finance), but not often.
Mint.com has helped me reduce spending and thus every few months I have to empty(not all the way) the savings account into one or more investments.
I am not against landlording, and would like to use it to increase my monthly income and f*ck-you stacks. The problem is the local market here (SEWI) has high taxes and mediocre rents. A friend is doing the same in Denver and profiting $600-1200/mo on homes with purchase prices under 200k. When I do the maths and include our local property taxes here, it seems the same capital would only net you $300-400 maximum. In order to seek higher returns here, you must get into riskier properties (commercial, low income, apartment blocks).
Am I crazy for flying out to Denver, going in on a property to test the waters, and expanding my rentals in a much more profitable area that is a 4 hour flight away?
Here's the options I have come up with:
I could invest the down payment money in indexes or dividend funds.
I could invest in some market spread options. Made decent money here back in college.
I could purchase more rentals in my locality and make 1% of the purchase price in monthly rent.
I could purchase rentals in another state and have them managed, making a higher return even after mgt fees.
I could pay down the mortgage and possibly refi to eliminate the $50 monthly PMI charge.
I could increase my 401k contribution from 11% to 17%, thus eliminating the monthly surplus (and also my freedom to invest as I see fit).
I could use $ to increase side-hustle of fixing cars. I love cars and motorcycles and have done well in the past fixing and selling. ($1000 profit / $3600 purchase price average over the last few years).
The reason this is posted in this subforum is that I'm leaning toward investing in rentals in another state.