BOB'S SLOW BUT SURE GET RICH SCHEME
This is a "sure fire" way to get rich:
Buy good quality mid-priced rental houses. Rent them out. Never sell. Out-live your mortgages.
You will realize the increased value through increased cash flow.
Do not refinance and take the equity out to buy toys. Equity should only be used to acquire more houses or for retirement.
If you do not know how to manage rental property hire a property manager. A good manager will make you money.
Do not buy junk property or in declining neighborhoods. These look good on paper but the operating costs and management time are too high.
The houses should be "modern" that is, they should have a range, oven, dishwasher, disposal, central heat & A/C, garage, automatic sprinklers and full insulation. Most homes built after 1978 fit this description. Homes built after 1983 have better insulation.
Maintain your property. Think of the expenses as additional investment.
Do not worry about how individual properties "cash flow". Consider the cash flow for all your properties combined.
When analyzing your investments look at net income before debt service (loan payments) relative to value to make investment decisions (rent to value ratio).
Consider negative cash flow a monthly investment.
Do not get emotionally involved with the properties or the tenants -- "it is just business".
Stick with it when times are tough.
Don't blame me if this does not work.
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