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Updated 3 days ago on . Most recent reply

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Rick M.
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Is Landlording worth it in the long run?

Rick M.
Posted

Given all the repairs and issues that we all deal with as landlords, is it worth landlording if you stick it out for the next 20 years on a property ? My over all question is, are you seeing the financial gain or find it motivating to continue? We are hoping to use our rental property as a nest egg to pay for our daughter's college expenses/schooling/income in the future. We have a mortgage, I make 600 dollars after my mortgage. I'm sure this number can change if the rental prices drop. If I just stick it out in the long term, do I have a better chance of being successful?

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David Krulac#5 General Real Estate Investing Contributor
  • Mechanicsburg, PA
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David Krulac#5 General Real Estate Investing Contributor
  • Mechanicsburg, PA
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Four of the biggest advantages of long term landlording are property appreciation, rent increases, debt pay down, and tax advantages. Long term tenants pay down the mortgage until the mortgage is paid off and then cash flow sharply escalates. Property prices have escalated tremendously over the last 5 years, further propelling values of rental properties along with the rent of the residential market.  Compare 2019 prices with today's prices, and in most places there are big differences. Our criteria for buying rental properties are desirable neighborhood with mostly owner occupants, good schools and low crime rates.  We have had tenants stay over 30 years and the average tenancy is 12.5 years. One multi building we owned for 37 years, improving the property over the years and ended up selling it for 6X what we paid for it. Another multi unit building we owned for 24 years and sold for 3X.  A single family detached house we oned for 25 years and only had one tenant we sold for 3.25X in 2019 and it now worth $100,000 more than we sold it for.  An extraordinary deal we did we bought a house for $30,000, and the first tenant paiud $2,050 a month in rent. We owned it for 22 years and sold for $435,000.  It was well worth owning as a landlord.  

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