We just don't have the time to manage rentals
...
If i had the time I would be digging into RE!!!
What is your impression of the time required?
Because I'd wager it's less than you're putting into the stock option writing, and much less risky.
Good luck KBecks. Hope you make oodles of money. :)
(not to totally hijack this topic, but…….)
Thanks, it is an interesting experience and not a get-rich-quick type of thing. I am not day-trading and I spend a few hours a week reading, planning, and investing. I also spend a few hours a week learning and planning about improving our personal savings rate and saving money / living well on less. It's been a great experience so far.
With the options, I'm just getting started. It's all very new and I don't know how well it will work. Originally when I was looking at real estate, I looked at a duplex down the street and estimated the rate of return to be about 7%. I also attended local REIA meetings where the very confident leader says it's fairly easy to make 20% day in, day out, all day long. I am not sure I believe that, to be honest. I am paying a flat annual fee for advice, so there is a cost to it, and I am trying to be careful and work in small amounts as I learn. It is not day trading, btw. My goal is to see if I can reach a target of around 12% annualized. This in my opinion might be comparable to what I could get in a real estate investment (assuming I would not have a sweetheart RE deal fall into my lap). My progress is really like making $100 here, $200 there on put-writing. I also consider this comparable to when RE investors target getting a minimum of $100/door/month profit.
The options are in addition to a long-term stock portfolio. In Robert Kiyosaki's books, he mentions real estate as one way, and stock investing as the other path but he stresses that if you are going to do stocks, you better understand options, and that's why I'm specifically going in this direction.
You have to understand my husband wants nothing to do with real estate, he has his day job and dreads the thought of a honey-do list related to rentals. I have a small business that I enjoy and it brings in a little bit and has some room to grow. One of my goals of options investing may be to accumulate enough to outright purchase a rental. I don't know.
I have been listening to Dave Ramsey (perhaps the total opposite of Kiyosaki, and I think it's good to get different perspectives,) and just read an interesting discussion here about paying off the mortgage with a linked study. Right now I think our priority will be to pay off our mortgage early from increasing our personal day-to-day savings rate. (we will still have accumulated assets growing in the market). Ramsey says that you should pay off a rental 100% and not go into debt (opposite Kiyosaki, who is
unafraid of embraces leverage). I am just starting to learn about using minimal leverage or at least access to leverage on margin to work with some more advanced options, like bull call spreads and synthetic longs. This is all one big huge learning party, taking small steps here and there.
I can let you know how it's going in a few months when my first written options expire. So far I've made an average of just under 6% on contracts that last 4-6 months each. Interesting stuff!!
It's my hope that when my husband retires from his day job, he might take up an interest in real estate, but if he doesn't, if he wants to do other things, then I have a Plan B that looks pretty decent. :)