With Terry Story, 25-year Veteran Real Estate Agent with Coldwell Banker in Boca Raton, FL
Often times as we move or upgrade our homes, we are faced with a choice – do we sell the house or do we rent it out? Terry sheds light on how to rationally approach this question – with pros and cons that cover hard financial facts and the softer side of successfully being a landlord. While passive income is great – and being a landlord seems like an easy way of doing so – don’t be fooled. Real estate comes with a lot of risks such as non-payment of rent, long terms of vacancy between tenants, maintenance, physical inspections, tenant violations, etc.
So real estate involves expenses you cannot escape such as property taxes that must be paid irrespective of whether you have the property rented out or not. So before you jump in, consider the alternatives, such as stock index funds where you literally don’t have to life a finger and can see your investment grow steadily over time.
And, switching gears, home prices were rocketing higher at about 12% annually but seem to have tapered off to about 4% to 5% annually. So is this a slowdown or is this a healthy taper? And with prices up so much, are we now in a housing bubble and is a crash on the cards or will prices continue to rise sustainably for the foreseeable future?