@Jay C.
Let me add some color here. I think your typical investor in rentals already has a home they own. That said certainly exceptions to the rule. If you do not own a home and do not know the ups and downs of home ownership having investment properties will be that much more of a challenge. I see it as a progression. But back to the topic you have some very wealthy people forgoing the home ownership route. You just can no longer make the case its the way to go. In fact just the opposite comes up. As you read many a post on this site the reality is many of these bright eyed posters will be visiting another site soon enough. Its called Empty Pockets. Most of the posts you find on this site are a breeding ground of leverage and more more more flips. Many of this fail. You just dont see folks looping back to brag of the failure. So to make the distiction on the rentals you have to be in the financial shape to do so. If not its a disater waiting to happen. Same goes for primary home ownership.
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NOTE: I address your passage above by excerpting it in [brackets]
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[[I think your typical investor in rentals already has a home they own. That said certainly exceptions to the rule.]]
I concur. There are exceptions to that rule as I wasn’t “your typical” investor because the first property was a duplex that I lived in and rented ½ out – with no prior experience.
[[If you do not own a home and do not know the ups and downs of home ownership having investment properties will be that much more of a challenge. I see it as a progression.]]
Yes, it will be a progression as is the way with everything that requires any amount of learning in life. You crawl and then you walk.
[[But back to the topic you have some very wealthy people forgoing the home ownership route. You just can no longer make the case its the way to go.]]
I’m not sure if using “wealthy people” who opt out of owning property as a good yardstick to underpin the statements you’ve set forth. I say this because, people with full coffers AKA “wealthy people” have more options than most and therefore are able to opt out of owning property (which is one of many ways to financial security) due to the MANY FINANCIAL OPTIONS AND INSTRUMENTS that they presumably have at their disposal.
Meaning – instead of buying a $500k investment property, I’ll sink my cash into (gold or silver) for example.
[[As you read many a post on this site the reality is many of these bright eyed posters will be visiting another site soon enough. Its called Empty Pockets.]]
This site caters to entrepreneurs. As you know, venturing into the realm of the entreprenur has “risk” built into it with a CAPITAL “R”… period. And where there is risk, there is failure. Meaning,.. “Risk and failure” = the twain shall not be set asunder! (Pardon the ye olde English)!
However, what I have read ad nauseam on site is this: DUE. FREAKING. DILIGENCE… and DON’T BITE OF MORE THAT YOU CAN CHEW, SILLY, ETC ETC! ;-)
As you poke around this site, PLEASE check out the NUMEROUS pod casts. There are many “pro level” investors (WHO HAVE BEEN BURNED BEFORE AND HAVE RECOVERED TO TELL THEIR TALES OF CAUTION.I like to call them “case studies”.
And to their credit, many of these generous investors give AMPLE warning about the need to perform serious due diligence before taking the RE investor plunge. Don’t quote me because I listened to this podcast a while ago.
http://www.biggerpockets.com/renewsblog/2014/07/31/81-quarles-direct-mail/
The advice may not be in the form of a “fire brand preacher” preaching at you saying DON’T DO THIS OR THAT, but as a smart and astute investor that you are, you can infer and extrapolate the advice CONTAINED in what may have gone wrong for said investor.
Failure is part of life. But we don’t seek out failure. We try to mitigate failure.
I believe there are words of caution in @Brandon Turner’s podcast (BP podcast 092) also. But seriously, at least one out of every 5 pod casts the astute investor can glean info on how to mitigate complete disaster which you refer to (tongue in cheek) as “Empty pockets”.
[[Most of the posts you find on this site are a breeding ground of leverage and more more more flips. Many of this fail.]]
Read posts by Ben Leybovich a contributor to this site (justaskbenwhy.com/) you will see ample warning of potential failure if the appropriate due diligence isn’t securely put in place. When you’re done reading his posts, tell me if you didn’t “hear” him preach about losing one’s proverbial shirt IF the PROPER due diligence and safe guards aren’t set in place.I’ve thrown down the gauntlet pal. I’ll be here to hear your response! J
[[Most of the posts you find on this site are a breeding ground of leverage and more more more flips. Many of this fail.]]
Once again, I refer you to Leybovich (among others). That dude will instill the fear of the Flip God in you (if that exists) but you get my point. I for one will avoid flips like the wrath of Zeus! It’s not for the faint of heart.What I believe (and I don’t have numbers to support this) is that a number of people/potential investors may be ENAMORED with the idea of flipping but I am willing to bet that less than ¾ of them have actually tried or will try flipping. First comes first, and it is the buy and hold (and possibly live in ½ of the property) for a while before taking the proverbial next bite like yours truly.
[[You just don't see folks looping back to brag of the failure.]]
I don’t think anyone in their “right mind” SEEKS to “brag about failure” as you put it. What I DO KNOW is that there are CAUTIONARY TALES … (people sharing cautionary tales of past failure) everywhere on this site. Tales that are meant to help YOU/US to TRY TO AVOID past fates like that. And if that ain’t the “spirit of sharing and caring”, then I don’t know what is. :-)
[[So to make the distinction on the rentals you have to be in the financial shape to do so. If not its a disaster waiting to happen. Same goes for primary home ownership. ]]
Even though it “goes without saying” (so to speak), if you poke around this site you will hear over and over the IMPORTANCE of being in “reasonable financial shape” BEFORE taking the RE investor plunge. You won’t find a pod cast "RE INVESTING FOR DUMMIES" type subject line that literally screams BE CAREFUL, DON'T FLIP AND/OR BE IN FINANCIAL SHAPE BEFORE YOU INVEST … but do take the time to spend some time listening and I think you’ll be quite surprised.
There are cautionary tales, everywhere; DESIGNED TO HELP folks like us traverse the often times risky roads that lead to RE investment prosperity.
Hello entrepreneur, hello risk, hello world! ;-)
All the best and good luck!
