I have an online business and I want to commit most of my working time to it. Is there a low-maintenance approach to real estate investment that would allow me to profit without expending too much time?
Not really. Most businesses require knowledge / education on the subject, experience and time to dedicate to it - to make it succeed. Running a real estate business is no different.
The only exception to the above would be if you have a lot of money - and I mean a lot - and you can buy a large property or large group of properties (like an entire apartment complex, a bunch of single family homes, a group of condos, a small or large strip mall, etc) and you have a property manager run it for you and you take a full hands-off approach to the property.
Good luck
Property management is something my wife and I could handle. I just can’t dedicate 20 or 40 hours/week to the enterprise. Should that exclude me from investing in real estate at all?
how many properties do you want to own? managing (I’m pulling this figure out of the air) 10 single family properties, that have been properly rehabbed before renting them, shouldn’t take anywhere close to 20 hours a week,maybe a couple of hours a week
Make sure that when you buy the properties you have everything replaced that is anywhere close to wearing out (new appliances are cheap compared to the time/money associated with having old ones fixed), and I know motivatedceo deals with a lot of less expensive rentals, maybe go more into the middle income rentals, and SCREEN your tenants.
You can look at spending your time (or delegating other people’s time) on these main 5 things below
1- Finding & buying a property
2- Repairing it / getting it ready for a tenant
3- Leasing it
4- Managing it
5- Doing ongoing repairs & maintenance as needed
Personally, I would get yourself one rental property at a below market price and see how it goes. If you like it, buy more. If you don’t like it, sell it at the price you bought it for or for a little profit even. It is hard to go wrong with single family residential homes if you buy cheap enough.
Time spent with real estate is sporadic at best. You’ll be required to spend several hours one given week and none for the next several. If you use professional management, at most you’ll be on the phone with your management company once in a while, at most.
If you manage it all yourself, you’re likely to hear from your tenant every couple of months at most, if the house was in good shape, and you screened your renters. The most contact you’ll have is when the rents are not paid on time, etc. This is usually the result of incompetent management and another reason to use professional management.
That all said, the more units/houses you own, the more you can amortize the management and expenses… thus saving your money and time.
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You’re looking at this too clinically from my perspective…
Real estate investing is only as time consuming as you allow it to be.
However, the most time consuming part, and the best part in my mind, is the search and negotiation for a deal. That’s also the hard part. Once you’ve purchased the property, there’s some initial time spent, but it’s a spike, and is not a sustained effort.
That said, if you don’t like talking with people, can’t negotiate yourself out of a paper bag, and/or not able to take the time searching, prospecting, and negotiating on your own, then you’re screwed. You’ll also have to settle for more conventional and mediocre deals. Most good deals do not get to the MLS, apart from popular myth spread by “auto pilot” real estate gurus and agents who claim to know otherwise.
Frankly, I believe that a well thought out real estate investing effort is worth the sacrifice of time, because once you control the asset, it continues to push off cash every month forever. If you borrowed to buy it, the loan balance also slowly pays off. And of course who is actually paying you? Your renter. It’s a beautiful thing. Your renter makes you rich. He works, so you don’t have to …eventually.
However, right now, the more time you spend trading work for money, the less time you’ll have for making your time work for you. I’m talking about other people’s time working to pay off your debts and eventually just pay you.
So, if your day-job will make you more than any real estate investing will, then stay with what pays. However, I would say that if real estate can’t pay you more in the end than what you could possibly earn, then you just aren’t buying enough real estate. Wealth building through real estate is extremely hard to beat, if done wisely and consistently.
New things don’t break. If they do they are under warranty. If the tenant tears it up it comes out of their deposit. So when you buy the houses and do the make ready, fix everything. New appliances and unless there is significant life in a system replace it. You end up with minimal maintenance and greater demand when you put it on the market.
What percentage of your savings and investments do you guys tie up in real estate?