Not Boring vs. Boring Investment
January 31, 2019
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Here’s how a NOT boring investment looks like:
In 1952 built house, 850 square feet, two bedrooms one bathroom, for $60,000, in not so good school district, with tenants who pretty much live paycheck to paycheck.
This type of an investment will most likely generate more vacancies, more evictions, and more repairs.
On paper this one probably looks amazing but in reality it typically does not.
Every house has repairs, but then older houses when a repair comes up, it’s usually means a bigger expense because you have to update things up to code and we dealing with older plumbing, older electrical wires, and older mechanical.
Here’s how a BORING investment looks like:
A 1980 or after built, three to four bedrooms, two to three bathrooms, maybe a den or an office, 1,150 square feet or more, two-car garage, in a nice community, in a good school district, with tenants that have good jobs for about $150,000.
Such a property will typically generate less “noise”, will most likely hold tenants for a longer period of time, and with minimal hiccups. It will be attractive to other tenants when the house is vacant, be attractive to sellers when you decide to sell the house, and when things break it will most likely generate smaller repair bills.
Many investors are attracted to the cheaper property which is actually the NOT boring one. They find it more exciting to have such a property but in reality it turns out to be the a bigger hassle and more headache then they wanted to get into in the first place.