Originally Posted by
crewdawg
I don't disagree with your words, but keep in mind that some people don't view it as a business. Eventually they'll raise it as their mortgage raises and/or they sit down one day, calculate their costs and actaully look at their ROI. Some could take years to come to that realization. Some are accidental landlords (something I think we're seeing much more of today) and are happy to just cover the mortgage and mx items because it's a "long-term" investment. I'd wager that you see more of these types who how a single, SFH.
SFH owner management of rentals is a time investment. If you aren't compensated for your time, you are losing time and money. Annual or 2 year leases are designed to stay at market rates. If you let someone occupy at below market rates you are losing money and artificially suppressing the market. That's not runnning a business or investing.
I got out because my time was more valuable and the return on the capital was about the same as a diversifed large cap equity fund. I'm no longer responsible for or have to manage anything. I made the worst real estate buy ever... a hangar. I have one tenant and they barely cover the insurance. The best part is that I know it's not an investment and don't try to justify it as one. If you don't run it as a business, it's not an investment. Would you go to any advisor for investments and walk out of the office saying "this is great, I can get my principle back in 30 years and probably break even and all I have to do is find trustworthy people, manage thier payments, fix things at a moments notice any time of the day or night, pay interest, taxes, and insurance annually, hope for no cataclysms, and repeat as neccesary every 2-5 years." Nope, hard pass. That's not saying it's not doable, just not long term on a large scale. Eventually you're time constrained and off load the management duties. If that off load then makes you a passive investor, the investment class no longer matters.