Hi everyone,
I'm getting a lot more comfortable in the stock market, but I'm new to real estate investing.
Quick question - is this a good idea or a bad idea?
I'm looking at buying a property with 25% down, and given the amount it could be rented for, the monthly cash flow will only be approximately $150 positive. The property is around $100,000. Is it worth buying with only $150 / month positive?
I did factor in a maintenance reserve of $140/month, which may be high, so the actual positive cash flow may be more than $150 positive. On the other hand, it seems to me that house fixes add up fast, and could easily run $1700/year. I am not in a position to do most of the work on the house myself, as I'm too involved in other things.
Right now I have a brilliant stock market mentor who is a multi-millionaire and is regularly getting 15% return in the stock market, and he's teaching me how to do it, and it's going really well so far, but even he admits readily that the stock market can be risky, and so that's why I'm wanting to turn to real estate - to diversify.
Still, though, I just cringe at the idea of paying repairs, closing costs, and other fees involved in real estate. Also the potential vacancy factor -- all of this just have the potential to KILL the returns!
The goal, though, seems sound - I am 33 years old and with a 30 year mortgage on this rental property, it would be throwing off $150/month positive until I'm 63 at which time it would be paid off and I could sell it or just use the rental income to live off.
Ok, so, any thoughts? Thanks.