Is this a bad time to start rental property investments?

Question

I get a feeling that there are no real opportunities in the single family home market due to below reasons.

Almost 50% of your rent goes away towards expenses like property management, taxes, maintenance, capex, tenant placement and all that stuff.  On top of it, if you end up having issue like roof, eviction, etc you are literally making loss and potentially have negative cash flow for long time.

Should we even bother looking for investment properties in this stage of the cycle?  I know bigger pockets podcast keep saying there are opportunities, but are they real for average investor in bp?

Russell Brazil · Answer

It is a bad time, and tomorrow will be worse, and the day after that worse, next year even worse, year after that will be even worse.

Joe Villeneuve · Answer

Good, bad and ugly isn't based on the calendar...it's based on the market you're looking in.  You're just looking in the wrong market.  Not all markets are the same.  Not all markets stay the same.

You invest when it's good, where it's good, because it's good there...not because the overall economy says it's good or bad there,...or then.

Frank Wong · Answer

Hi Raj,

You said, "I get a feeling that there are no real opportunities in the single-family home market due to below reasons".

What that tells me is, you don't know what you are doing.  Focus on leveling up your investing game and learn how to analyze, find, and buy rentals.   Cycles matter but not to the extent that you think it does. Money is made in up, down, and sideways markets. There is always deal to be had.

It's always a bad time to invest in any market cycle if you don't know what you are doing.

Mike Dymski · Answer

https://www.biggerpockets.com/forums/223/topics/697605-retired-at-the-age-of-28-with-a-lambo?page=1#p4119274

Ask David from the post above.  He started investing in 2016 and is now retired...all during a time period where we answered hundreds of posts just like this one asking if it was too late in the cycle to start.

Nathan Gesner · Answer

Chinese proverb: The best time to plant a tree was 30 years ago. The second best time is today.

There's never a "bad" market. You have to learn how to make money in the market that you have today. Keep working on your education and building your financial foundation while you figure out your niche.

Mike Dymski · Answer

You are getting creative with your answer...101 ways to answer this repeat question.

Mike D'Arrigo · Answer

@Raj Kannan I'm not clear why you feel it's a bad time to invest based on the reasons you've given. All of those expenses and risks that you mention exist at any time in any market. That's not going to change. The key is to invest in affordable markets that cash flow and the numbers work. Keep in mind that people have been investing in real estate for generations and were doing so when prices were at their peak and interest rates were much higher than they are today. I wrote a Bigger Pocket blog on this very topic, You can find it herehttps://www.biggerpockets.com/member-blogs/3992/83758-is-it-still-a-good-time-to-invest-in-real-estate

Lee Haenschen · Answer

I feel the same way.....but I tend to look at things from a negative stand point. Me and my wife are miserable at what we are doing for a living. Working from 7am to 10PM 7 days a week. We WANT so bad to get into real estate but can't stop working or else life will fall flat (financially) We are scared to get started because what happens if we need the money we've saved for our first house flip deal or rental deal. And low and behold....I got a large tax bill this year for my business that I couldn't pay and had to dip into that savings. Would have been up a creek if we had used the money for what it was intended for.

The market moves SO fast around here. If a house looks vacant....it's under renovations the next time I pass it. I don't even have time to write down the address much less inquire about it and the deal has already been done. I can't get my foot in the door because of the pit vipers that do this 24/7

Camilla Clement · Answer

I hope not.  I too, am just starting out and hope to find some financial freedom.  I feel like there always can be good opportunities in bad times and good but I am interested in what the experts say!

Tyler Bushey · Answer

If you buy right, it's always a good time.  If you buy wrong, it's never a good time!

Is this a bad time to start rental property investments?

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