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0 pointspixelatedindex2mo ago0 comments

Fair. Mortgage during the ZIRP days and prior was really low though. A 3K mortgage then is like a 6-7K mortgage now. And home insurance is also relatively low, I pay like 1.5K for the whole year. Point is, it’s a great way to make money and that is why people become landlords.

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jjav2mo ago

> Point is, it’s a great way to make money and that is why people become landlords.

If it is, why not do it and become rich too?

It's not really a particularly good way to make money. I've run the numbers on hundreds of properties over the last two decades and I've yet to find a scenario where I could buy something and rent it out with enough profit to be worth the hassle. You'll be much better off investing in some index fund instead.

pixelatedindexOP2mo ago

> If it is, why not do it and become rich too?

If I had the capital I absolutely would have. It’s a bit worse now but any property you bought pre-covid (at least in big cities) can be rented out for more than what mortgage costs. I remember looking at houses in the Bay Area and the monthly mortgage would be 3K while you can rent it out for 4-5K. Anyone who owned property in the 90s and early aughts are absolutely rolling in it. You can invest the profits in an index fund on top of it.

jjav2mo ago

There's quite a bit of optimism in those numbers.

I bought a house in the Bay Area in the 90s and the mortgage was well over $3K (remember interest was over 7%) and an equal house back then was renting for $1300 (my rent at the time for a 3br house in south San Jose).

Try to run the numbers for any property you like. Remember to include taxes and insurance and maintenance. Just to break even is not easy and then you'll have to work for free on the maintenance. Or pay a rental management company, which is another 8-10% taken from the rent.

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jjav2mo ago

> Point is, it’s a great way to make money and that is why people become landlords.

If it is, why not do it and become rich too?

pixelatedindexOP2mo ago

> If it is, why not do it and become rich too?

jjav2mo ago

There's quite a bit of optimism in those numbers.

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