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I have relatives telling me the best way to build external cash flow is buy a property, pay a person to manage it and soak up the sweet rent profits. If it was this easy wouldn’t everyone do it?
Currently save 5k/month and just throw it into fidelity
I own a place and there is a lot of unexpected costs and risks involved with owning and renting a property. I would say if you have enough extra money and want to diversify it can be good, but generally you can do just as well with mutual funds without the risk and loss of liquidity.
This is beautiful!!
?
Are you looking to move out soon? One great opportunity is to buy a multifamily and live in one unit and rent out the other(s).
I'm also in NJ. You've gotta watch out for the expensive properties with high taxes. If you do buy, make sure you're buying a place to rent, not your forever home (ie: you may want big bedrooms and marble counters and a laundry room on the first floor, but that much higher purchase or reno cost is not going to translate into a much higher rent).
Also make sure you're buying in a place with a good flow of reasonable type of renters (ie: you may not want to rent to college partiers)
Not looking to move out, currently live in Manhattan rent free. Just looking for a place to invest other than holding it in mutual funds, but not sure if houses are some secret to long term cash flow!
Which neighborhoods in NJ? I can’t seem to find any cash flow positive multi family homes... and I don’t want to do a gut renovation.
North Jersey is generally pretty pricey in decent areas. Central Jersey gets a little cheaper. South Jersey is quite reasonable. (All relatively speaking)
Wait for the next recession and buy property on the cheap
But when is this next recession hitting and do we know that it's even going to have a substantial impact on housing?
If the housing market does take it hit, it would either have to happen in the next year or it would have to be huge hit to make up for the months of not investing.
If you're still saving up to buy the property, it does make sense to sort of hedge your bets.