Income property
 

How many of you own income property? Has it been a worthwhile investment or has it ended up being a hassle? Every time I discuss it with somebody who currently owns, or has owned income property I get an eye roll and a statement of regret.

I have (and currently do) and will be adding to my portfolio as I can. The key is to realize it is NOT a passive investment like mutual funds, etc. It is a part-time business and needs to be treated as such. But if you have the time, funds, and acumen, there is no better way to build wealth IMO.

I have an LDS neighbor that does it. My parents rent out their old house.

Both have had problems with bad tenants. Both now only rent to LDS, and do so at reduced rates. Actually my parents are copying my neighbor.

If you have unreliable tenants who are paying a high rate, if they stop paying or damage the house or do something stupid, and your house goes empty for four months or you don't get paid for four months....then you're not doing so well.

Both have decided that it is too expensive to have bad tenants.

I think it is a federal thing that you don't have to pay capital gains on your homestead, provided you have lived there for three years. So there's a downside to renting your house out after you move to a different house.

Also, at least in Texas, property taxes are higher on non-homestead homes.

I think it is a terrific investment if you plan on doing over the long haul. It is NOT for everyone. You will deal with deadbeat renters and you will deal with many small fixes and home improvements.

A good friend of mine is making a decent living but he owns 5 different properties. If he were to sell now, he would bank about $600,000. If he holds on to them over the next 10-15 years, he will retire to a very nice life. If you don't mind being hassled and dealing with people, it is well worth it. If that kind of stuff bothers you though, it may be too much trouble for you.

A good property management company is priceless.

That's what I meant by it is a business, not a passive investment. And like any other business you might consider getting into, you have to decide if it fits you.