In the past couple months a couple of my family members have been making offers on bank owned properties as investments.  Without going into too much detail, they are buying properties with positive cash flow when rented out.   It is harder than it looks, and there are good deals out there.  However, here are some of my thoughts as to why I would not be investing in a rental property.

First of all, it takes a lot of time and energy to find a suitable property that has positive cash flow.  My hubby and I just don’t have the time  or drive to go house hunting right now with a new baby.  My hubby simply thinks it is too much trouble.  When we bought our house from his parents all he did was sign the final mortgage papers, and he thought that was too much trouble.  I cannot imagine how annoyed he would be if we actually went on a house hunt and attended endless open houses.   I am actually glad that we purchased the house he grew up in because that saved us a ton of time and gas  in choosing a house  (and probably saved us some  arguments since I have seen how my parents bought their houses).  Since our assets are combined, there is no point in investing in something that the hubby does not want to deal with.

Second,    it takes quite a bit of cash to buy investment properties these days.  We have very good credit, but there is little chance that we will beat out investors with full cash offers.  I just don’t feel comfortable putting so much cash into a rental property because that would make our investments too heavy on real estate.    It is never good to put all your eggs into one basket.

Basically, we are not really in a very good position  to buy rental property now, but for some people that have a lot of time and money on their hands there are good deals out there since the real estate market tanked so much.  I think these opportunities will stick around for at least a couple more years.   The rental market has gone down in general, but many people are moving out of apartments and moving into single family homes because the rent price on single family homes have gone down.  There are also a lot of people who were foreclosed on renting now, so it is still possible to rent out a property.  The key is to do your research and find something with a positive rate of return, and don’t overextend yourself with too much financing.

Anyway,  I don’t think my husband and I like being landlords because it involves collecting money from real people.  It is great when you have a good, long term tenant, but when you .   It is much easier to just collect interest from a bond or CD because it is a lot less personal.   When you buy stocks and mutual funds you could lose money, but at least you won’t lose your life and your car won’t get keyed.  Actual human beings  are just too unpredictable of an investment.

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