Real estate (and business management in general) is a pain in the butt compared to ...dabbling...in the market and stock and options. Real estate has non-stop issues: no liquidity...could take months and years to sell. Problem tenants. maintenance/overhead. etc etc
Yeah your story of professionals able to supply a current lease and demonstrate they are paid to date with recorded phone calls is exactly similar to what I do. Except these tenants aren't professionals, couldn't find their lease if their life depended on it, are behind on payments and have received notice. Yup, exactly the same.
If I had to do over again and knowing after so much time invested in learning to trade commodities profitable, I would have done real estate in different way. But being that a relative did real estate, gave me start up monies and ton of his experience, it was no brainer to buy in certain ways. But no matter how much you plan, problems occur as you wrote and some months I was handing over my gov't checks to mortgage companies. I specialized after that and stopped buying middle income homes and stayed in lower mid income to higher low income and seldom had problems as I once started. You learn eating beans no fun. I always bought properties as if I was going to move into them one day, so unless it was close to free, didn't buy major stressed homes or gang land areas. But at the time I was putting down $5500 and good 8 years before attempting to learn day trading, seemed to be the thing to do. I grew up with relatives who for most part were craftsmen of home building, worked my rump off for free for them to learn how to do for myself. Education is seldom free. Worst deal I ever done was buying 160 unit apartment complex, was so happy I was getting huge discount, then 911 happened and 90% of tenants went to war, never dawned on me they could leave when they got orders. Went to the bank that held the mortgage and they certainly didn't want it so they worked with me, by then I had many other properties and solid relationship with them. Two years later found a buyer, and basically lost, another lesson, you find your niche, stick to it. I never "earned" while owning them, depreciation certainly helps so you can breakeven till they get paid off, but at some point, you can't depreciate land value and inflation the rents don't go up as much as you like them to be. Being I reside in city with huge military bases, always shortages of homes, which has even larger shortage of HUD quality homes, houses seldom vacant. You have to know so much like in trading. As far as Quality of life, grew up certain way and that was always be working, divorced long ago, can't have kids, no siblings and parents past long ago. Not happy unless I am working, and most of the time, most consider me to the biggest asshole around cause look at value differently than most, seldom ever going to overpay, believe in balance but won't cheat anyone on purpose/make it right if done without knowing. Those who have worked for me either quit and say I am an a-hole and if they worked hard I give them very good references. Not here to be a fucking friend, it is business like anything. You don't like me, am glad. And if tenant asks for copy of lease, most states require owner to give them a copy.
It's a 2 way street for sure - renters need to do a background check, check references, etc on their 'land lord' before signing a lease since their is no shortage of bad 'land lords' out there not to mention a lot of scandals.
I've rented nearly all my life and still do. The upsides are: Easy to move house and follow the jobs whereever the jobs are - quite important these days. No maintenance issues, ie someone else pays. Not tipping money into RE fees (R.E. commissions when relocating) or into morgage interest. Not wasting money doing stupid house renovations (bottomless pit) There is no temptation. Downsides: Having to deal with stupid RE companies who want to regularly do house inspections. Having to deal with stupid RE companies period. Have to pay rent. Bugger! Conclussion: Renting is ok but make danged sure the time you save by renting is time you spend on investing in the markets which I believe is a better bang for your bucks and time. Trading is more fluid and the fees are lower than investing in bricks and mortar but while the downside of renting is dealing with RE companies (bone lazy employees in a bone lazy blood sucking industry) you don't need to deal with 95% idiot tenants when attempting to rent out and make a buck.
Dealing with people like tenants, employees, contractors, government issues and then with unpredictable events like 911 that you mentioned, new bylaws, illiquidity when wanting to sell etc. is too much headache. What happens when one of the units has a drug dealer living as a guest and there is a SWAT team visit. Depending on local laws, landlord can have to face court battles to save his unit from getting taken over by the government. Would be happy with 7% annual in REITs, Index ETFs and also be able to keep a main profession plus peace of mind. Can allocate 20% of portfolio into growth/trendy stocks and take a dive into sector plays also.
Until someone you did not rent to sued you in court for racial, age, gender... discrimination and you have to pay triple damage.
%% Plenty of opportunitys in both.I like land+ stocks better , as a banker named it ,better ''panther piss '' on the woods than rental carpet/pets.LOLI lost more in options than REALTY + stocks,; so i dont do options anymore
Its a little ironic that I saw this post. I just got through reading an article about day trading on a realestate site called bigger pockets. One of my former students commented on the article which is what drew me too it. As for the question, it depends. Just like there are different styles of trading there are different ways to do realestate. I do mostly commercial properties and high end residential. Here is my quick take on the work load. Flippers. These are the most work intensive and hands on of the styles. They are in and out quickly. They have to be since most of them are using hard money lenders to aquire the property. Residential landlords. Not as labor intensive as flippers but be prepared to get your hands dirty. The revenue stream is thin and you will not be able to pay contractors and vendors for anything that you can do yourself. Commercial. Its a world in itself but the returns are very high. The workload comes from conducting due dilligence (extensive) and the complexity of the deals. There is also a significant amount of travel involved. That may sound ok but travel is work.
I've done rentals all my life. Specialize. Yes, middle income and lower. Don't want families with kids or young people as a rule. Older people are more stable and quieter. So I like small units that don't attract more than a single person or a couple at most. It is more profitable not to have it rented than to have a problem. My places ...run as 'family'. Most of my tenants stay 7 - 8 years and longer. This business model works for me. Like Handle said also, there are a lot of skill sets necessary to keep these kinds of things going. It is not easy.