Many real estate investors get burned out too fast by buying properties, managing them, fixing them and renting them out.
In my opinion being a landlord is not a good strategy at all unless you receive a CASH FLOW (not net income) of $500/month or more per unit.
Yes, I know about principal reduction, depreciation, etc. I do believe that cash flow is way more important than net income. I owned 65 properties several years ago (in good areas) and I sold majority of them because there were a lot of issues that I didn’t want to deal with anymore. Even though all houses and commercial buildings that I owned were in top notch condition, we still spent 15% of rental income on repairs and maintenance every month; ROI wasn’t great at all. I sold the majority of single family houses (that were the worst cash generators) and only kept duplexes, triplexes, quads and commercial rentals.
With time even newer properties need new furnaces, water heaters, dishwashers, stoves, siding, roofs, etc. And if you don’t receive enough cash flow, you will not have funds to pay for these repairs. Yes, I do understand that you can tap into savings and pay for these repairs, but this is not what a real estate investing is about, it’s about getting cash flow so you could use it to invest or live off of it.
Don’t ever buy a property until you can fix it up and sell it or can get positive cash flow after it’s rehabbed. Do not bet on appreciation too much either unless you like to gamble. I still own some houses that I bought in 2003 and 2004 betting on appreciation and they worth now less than I paid for them.
In my opinion the best strategy for investors is to wholesale or flip and then invest capital into rentals.