RE Buying for Passive Income Streams

8 Replies

So I have been reading and researching about this REI field and found this website and corresponding youtube channel, very helpful. But wanted to ask you guys a few questions:

1- I am in DC suburb area, since this area is expensive, for passive income(rental property) it's easier to rent out and rents are a lot higher, but prices are high too. Should I buy in DC area or move farther, where of course price is cheaper, but rents are low too? So it's more of a trade off?

2-For a beginner, should a rental property be within 2hrs drive of where I live or really doesn't matter?

3-If I can afford 15 years loan should be safest or it doesn't matter if I do 30 or 15 - fixed ones?

Thanks for all of your help and advice, I am sure I'll have some follow up questions. :)

1. I would take your cash and invest it out of state in some rentals. Cash flow $250 a house for a $15k investment. Then rent a place to live in DC.

2. It doesn't matter. You will have a PM who will manage the whole property for you.

3. Longer the better, to reduce your monthly payments, which means more cash flow. 

If you have follow up questions please connect with me and we can chat. 

Antoine Martel, thanks very much for your kind response. I appreciate it.
1- Yeah, out of state prices are a lot cheaper than DC and surroundings. I means, there are areas around here which are cheap, but they are not sough after neighborhoods. Another follow up question to this, is it safer to pay off my current house where I am living? So, that in case if I have no tenants, will be able to take care of the mortgage payment.

2-Many people suggest to not use PM, if property count is 1-2, because it affects cash-flow and hence, buying within 2hrs of existing place?

3- Again, reason why I said 15 is, because if I pay off my existing house, I can do double payment towards newly acquired rental place. Plus, better rates?

Now, in my ares there are no multi-family homes and I am NOT really interested in a condo. Between single family and a townhouse, I am leaning towards a townhouse. Is it a safer choice or I should be choosing a SFH.

Thanks again for all of your help and advice.

1- I am in DC suburb area, since this area is expensive, for passive income(rental property) it's easier to rent out and rents are a lot higher, but prices are high too. Should I buy in DC area or move farther, where of course price is cheaper, but rents are low too? So it's more of a trade off?

It depends how important cash flow is for you. You want to make money somehow on a property- so either appreciation or cash flow. If there's no cash flow near you, which I don't think there is, then you're down to appreciation but that can be super risky. Most people I know living in expensive markets, myself included (LA), buy out-of-state where they can get cash flow (if they aren't investing for appreciation)


2-For a beginner, should a rental property be within 2hrs drive of where I live or really doesn't matter?

Speakingof out-of-state...here's an article that gives pros and cons of investing locally to you and non-locally- 

https://www.biggerpockets.com/renewsblog/2015/11/1...

3-If I can afford 15 years loan should be safest or it doesn't matter if I do 30 or 15 - fixed ones?

Completely depends on your goals. There's not really a wrong answer here. If you want to maximize monthly cash flow, go with the 30-year. If you aren't in a hurry for anything and not trying to buy a ton of properties, go with the 15-year just because there's no reason not to. But if you are trying to scale, you might want to save that extra payment a month to dump into more investment properties. So, depends on your goals.

Hope that helps! Reach out anytime if I can be of any help.

@Ali Boone , thanks very much. That's very helpful advice in terms of '3' and makes total sense. Let me have a read on '2' article and think I have an answer for '1' too.

One last question, I have read at many places trying to do everything on your own can be overwhelming. For anyone who has 1-2 investment properties, do you guys maintain it on your own or higher contractors and PM for everything and if so, what source do you suggest?

Thanks again.

Haha...sounds good!

Any advice about :

One last question, I have read at many places trying to do everything on your own can be overwhelming. For anyone who has 1-2 investment properties, do you guys maintain it on your own or higher contractors and PM for everything and if so, what source do you suggest?

Thanks again.

@Syed Shah I am from DC as well and after having a few buy and holds I went over to investing in notes which is great passive income and your the lienlord not the landlord so you don’t have to deal with tenants toilets and termites.

I would be happy to discuss more about them with you offline.

@Chris Seveney , thanks for your advice and input. I am glad, you are local. Let's please connect and I would love to explore and learn a bit more from you, if that' alright by you? Since, I am not closing any of my options and keeping an open mind about everything. Thank you. 

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