Why don't more W-2 professionals invest in long-term rentals?
Hey All!
I hope you all are having a wonderful day. I wanted to ask seasoned Long Term Rental Investors what the main mistakes are that casual W-2 workers commonly do when they invest in their first one or two properties to hold on for a long time, with their ultimate goal of slow but stable wealth building, not trying to scale to as many doors as possible. As I'm based in the Bay Area, CA, I see and have talked with many people who do not have long term rental / appreciation properties. I am sure that a decent amount of people here have some decent savings to put down a generous downpayment in the midwest so financially, it is possible with the right property. My question is, why don't some people from high paying areas of the country go for these 200-300k homes in places like Cleveland, Detroit, etc if the downpayment is less than in places such as Miami, Los Angeles, and the other major cities. More specifically, for W-2 professionals who have the capital but haven't yet pursued an investment property, what do you think is the biggest thing holding them back? I'd love to hear the range of perspectives on this.
Hasan
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#1 Starting Out Contributor
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you asked a few different questions. why don't more do it? and what mistakes do they make?
returns on non-value add LTRs have gone to zero. so i don't think it makes much sense anymore for a person in the Bay Area to buy a random property in Cleveland or Detroit and lose money on it.
now, if you go to Cleveland 8 times a year for vacation and your uncle is a general contractor there, that's a different story.
but here's what tends to happen.
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