What next step options from here..

12 Replies

I have some residential rental properties, acquired over last several years (post 2012), now last 2 years I haven't done any investing due to some reasons, now I want some guidance on what type of investments I should move into, continue with residential rental properties - probably move into Multi family houses? or should I go into some retail or office space purchases? I'm in Charlotte, NC.

@Kiran K. that’s a hard question for anyone else to answer, at least without more information. What’s your goal? Cash flow? Equity? Rehab/flip? Are you happy with your current portfolio? What don’t you like about it? What were your reasons for buying the properties you have? Are you investing alone or with partners?

These are all things that will inform your decision, and it’s impossible to provide any worthwhile recommendation without knowing more

@Patrick Menefee

I have 4 rentals right now, but I want to expand. All rentals I own by myself, and I manage them myself. My goal is cash flow, buy and hold passive income. I'm happy with the cash flow on these properties but not sure if it's easier to manage other type of properties than residential rentals, or is it easier to have multiple properties in location for managing, i.e. multi family houses. On other hand, i also want to try out some retail/commercial/office spaces, as I learned their lease periods are longer and less headache than maintaining residential rentals.

I think you're asking a good question. I guess it's really up to you and what you're risk tolerance is. 

You're doing the rental thing now. It'd be easy enough to just expand on what you're already doing, you already learned quite a bit in the space having 4 rentals. So expanding that leveraging the lessons you already learned should be easy and profitable. Going from SFH to Multi-family homes is a jump but it's a small jump. All the same rules apply but multi-families tend to cash flow better and scale faster. Making the jump to commercial offices would definitely be interesting but it is a new product and a new market for you. You'll likely make some mistakes getting started in it but if you're excited about it and willing to accept the fact that it'll be a learning experience then I say go for it.

In-action is the opposite of progress. So if you feel like you're progress has stalled because you're not excited with rentals, and you would be excited about getting into commercial then that's where you should go. Doing ANYTHING is better than doing nothing, but it all comes back to what you're risk tolerance is. 

@Jonathan Bombaci , thanks for your time and valuable advice. 

"In-action is the opposite of progress.",  you are right absolutely right, and I'm in that phase now, looking to put effort and time to take some steps. My plan is to add 1 or 2 more rentals and either a MFH or a commercial with in a year time frame.

Kiran,  

Have you looked  at the short term rental market in Gatlinburg/Pigeon Forge or Myrtle Beach? That could be a new option to explore. They cash flow extremely well, but need a little bit more of your time in responding to Inquiries, questions, general maintenance requests from renters. 

That is where I branched off when I was at your stage about a year back. You can automate a lot of the regular touch-points, and have cash flow that is almost 8 to 10 times more than from a long-term rental.


Hit me up if you need more information!

Vik

@Kiran K. it's a great suggestion from @Souvik G. - if cash flow is what you're after, short-term rentals in a well-established, high-occupancy vacation destination like Pigeon Forge/Gatlinburg, TN are the way to go.  I have three properties there that I self-manage from a distance, just like Vik said, once you're up and running there's very little time investment, it just requires having some flexibility to respond to messages from guests in a reasonably prompt manner, and the ordinary check-in messages etc. can be automated.

@Kiran K. - your question is more one of soul searching. No one can answer that questions because the assets you listed are so different. I'd explore each of them and figure out exactly what you want out of an investment. Self storage is not like office, which is not like multifamily. All can yield great returns, but will probably do so in different ways. 

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