Originally Posted by
NuGuy
The biggest problem with any of this is you really need to be into it, or it becomes a huge PITA, you start to slack off or never fully engage. 90% of the result comes from the last 10% of effort.
That means if you're doing it solo, you have to be all in on your days off, and probably your SO's days off as well. Answering phone calls from angry tenants, dealing with retail contractors, insurance companies, banks, government paperwork, lawyers, etc. Fallen tree on the roof, tenant twists an ankle on the steps, those sorts of things absorb a huge amount of time. It's going to take some real effort until get to be where it's on autopilot, or earning enough where you can shunt it off to a management company (or start your own, which is another set of headaches). It is a LONG term play.
If you're really into it, it's not really work. If you're not, it's one big headache after another, and you're probably better sticking to the index funds, and flying on days off if you want.
Airline pilot travel schedules make hands on landlording a difficult task and poor choice in most cases. When you consider the hourly/daily pay rate in our profession the opportunity cost of working "in" your business instead of "on" your business is too high. It is far better to hire/delegate the hourly tasks. This can be problematic in the SFR space, although not impossible. I've met several out of state investors who BRRRR their SF properties. It takes education, networking and a fair amount of trust.
Understanding the value of your time both quantitatively and qualitatively is a key factor in successful real estate investing while working a full time job. Over the last few years, I've put considerable effort into separating which tasks I should do, which tasks I should hire and which things shouldn't get done. Going through that exercise will shape your investing approach. The only SFR I've done in the last decade was a hands on training exercise for my daughter. The ROI on money was high, but the ROI on time was insignificant. The value was in working with my daughter.
SFR is the domain of middle class workers aspiring to me millionaires. It is a great place to start and a good option for early career airline pilots. 30yr fixed rate financing contributes to the low risk nature of this asset class. Mid career pilots well into six figure incomes should consider being LPs in larger commercial deals or direct owners of larger properties like storage facilities, RV parks, apartments or NNN commercial property. Financing on larger properties generally isn't as safe as the 30yr fixed rate mortgages available in the SF space, so you need to learn and DYODD far more than SF. My personal RE portfolio looks nothing like it did as a new hire because as income and net worth increase the ROI on time becomes more of a factor than ROI on money.
I agree with almost all of NuGuy's assessment. Even though RE is a LONG game, it's a much shorter game than index funds in a 401K. You can build a retirement income in 10 years vs 30.