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Real Estate Investing in Rentals - the $10 Million Real Estate Investing Mistake
Renting to tenants is no longer "where the money is" for real estate investing. I became a multi-millionaire landlord in the 1980s by buying $10 million in rental houses. Yet, I consider this real estate investing approach the biggest mistake in my real estate investing career. I call it my "$10 Million Mistake." Back then, real estate investing in rentals was buying a house, renting it to tenants for a rental fee that covered the mortgage, and waiting for an increase in value. Interest rates were as high as 25%. Inflation was rampant. You could buy a house, and it would almost double in value in 10 or so years. Boy, have things changed in real estate investing! Interest rates have recently been the lowest in 46 years. Inflation is flat. The same rental house in some areas is appraising for less today than it appraised three years ago. The major profit to real estate investing in rentals is the pay-down of the mortgage by the tenant. Otherwise, profit comes from the difference between the rental fee and the mortgage payment. One month vacancy per year, which is not uncommon, might convert into an annual investment loss, even if (1) tenants don't leave owing rent, (2) the property is not damaged, or (3) repair cost is negligible. All of these possibilities are very unlikely. One month vacancy per year can eliminate usage profit for the year. Spend your time on fix up repairs, even part time, and you go more in the hole. How much you lose depends on how much your time is worth. Real estate investing is intended to be profitable. Vacancies, repairs, and time expenditure might mean you are only making a donation to the great cause of improving the nation's housing. The scenario changes if the mortgage is negligible and note payments are significantly less than rents. But the beginning investor does not often create this situation. Fixing up properties for resale is a better venue for real estate investing today. Go a step beyond the norm, and learn how to help a renter get financing for your fixed up house. Go another step by converting a junker into a "Dream House," and you will attract prospects to your property like bees to honey. Turning a "Plain Jane" into a "Doll House" demands extra work, but attracts better quality buyers. Real estate investing is extremely profitable, but your choice of real estate investing venue is critical to optimal profitability. Phil Speer, Ph.D., started his real estate investing career 25 years ago. Without the availability of credit and using only a $10 bill, he purchased $1 million in properties in his first year, and had accumulated $10 million in properties by his fourth year. He was featured in a Wall St.Journal editorial as most successful investor in the Nothing Down Real Estate Movement, and was honored with a Caribbean cruise as top investor of the year. In his hometown of Nashville, Tennessee, he has been a businessman and Human Resources Consultant for 30 years. He is an author, speaker and seminar director. To learn how to profit in real estate investing, even without cash or credit, read his report at http://www.CashinHouses.com/. Subscription is free to his Fix-up Ezine. He and other contributing authors provide free articles and resources on real estate investing at his online "Academy of Advanced Real Estate Investing Techniques" - http://www.AAREIT.com/.
MORE RESOURCES: Delistings Surge Nearly 50% as Sellers Who Can't Get Their Price Quit the Market in Frustration Realtor.com Paul Simon's Daughter Blasts Richard Gere for Selling Her Childhood Home to Real Estate Developer Rolling Stone $900,000 Homes in New York, Illinois and Oregon The New York Times BlackRock to buy real estate firm with $7.3 billion in assets Crain's Cleveland Business Real estate investors are purchasing more U.S. homes as high prices lock out would-be buyers CBS News Milestones: Massive data share to benefit 300k MLS members Real Estate News by RealEstateNews.com Real Estate Transactions, July 7 edition Hopkinton Independent Nashville man, 22, makes up to $90K/month day trading — now he tells Ramsey Show he’s ready to try real estate Yahoo Finance Aspen Real Estate Snapshot, Aspen Daily News Paul Huntsman Launches a Real Estate Site Aimed at Competing With Zillow Building Salt Lake 🤔 A real estate Ponzi scheme? Outlier Media Brockton home sells for $610K; Bridgewater home that sold for $533K has outdoor shower Enterprise News Ultra-rich Americans now pouring cash into luxury real estate for ‘safer, less volatile’ investment than stock Yahoo Finance Hamptons Real Estate Market Data – Week of 7/1/2025 Hamptons.com AirGarage Raises $23m to Modernize Parking Real Estate Parking Network Midwest market leader elevates brokerage head as CEO steps down Real Estate News by RealEstateNews.com Top transfers: Delaware County commercial property hits over $5 million The Columbus Dispatch Check out this $10M Gulf Breeze estate dubbed the ‘The crown jewel of the Emerald Coast’ Pensacola News Journal Real Estate Transactions | June 23-27, 2025 Republic-Times Top residential real estate sales for June 23-27 in Longboat, Lido, St. Armands, Bird Key Your Observer JM Electrical Promotes Craig Chisholm to Chief Financial Officer Boston Real Estate Times The scenario that could reignite Israel’s real estate market The Jerusalem Post Rising Temperatures, Rising Risks: How Climate Change is Redefining Insurance and Real Estate AInvest Is the surge in delistings good news for buyers? Real Estate News by RealEstateNews.com RealT sold shares of Detroit homes it has never owned Outlier Media Questex acquires two in the operational real estate sector hotelmanagement.net Tampa real estate investment firm under investigation for potential deceptive practices Florida Politics Hunneman Secures Financing for Historic Multifamily Redevelopment in Downtown Lowell Boston Real Estate Times Former KVH Middletown HQ sold for $5.25 million to become housing, to top latest sales Newport Daily News Boston Office Market Sees Momentum with Leasing Gains and Pre-Leasing Surge, JLL Report Shows Boston Real Estate Times Corporate titans finalize three real estate deals Nashville Post Ellis Block Apartment Community Opens in New Britain at Near Full Occupancy Boston Real Estate Times Middle East Real Estate Market Size, Share, and Trends, 2033 Market Data Forecast 'Married To Real Estate' Canceled After Four Seasons On HGTV, Say Hosts Egypt Sherrod & Mike Jackson Deadline Where are home prices falling most in America? This SWFL community made top of the list Naples Daily News Tony Robbins’ Top Real Estate Tips in Today’s Economy Yahoo Finance Triten Real Estate Partners, Angelo Gordon Seal $150M Refi for IOS Portfolio Commercial Observer From Humble Beginnings to a Real Estate Empire: The Inspiring Journey of Sanjay and Usha Kakade Times of India Historic Villa Calafia Estate Lists for $18.5 Million Galerie Magazine 10 Steps for Picking a Hot Real Estate Market for Investment in 2025 Norada Real Estate Investments Trump on past presidents: Ike was 'underrated,' FDR 'amazing,' Polk 'sort of a real-estate guy' Yahoo Residential Real Estate Markets Show Resilience in 2025 The Ritz Herald Mortgage Rates Today: The States Offering Lowest Rates – July 8, 2025 Norada Real Estate Investments Interest Rates Forecast for 2 Years by Goldman Sachs: 2025-2026 Norada Real Estate Investments Friedman Real Estate closes sale of 28,640-square-foot industrial property in Farmington Hills REJournals Report Forecasts Alexandria Real Estate Market Alexandria Living Magazine Local real estate incubator seeking next group of budding developers The Business Journals Institutional Real Estate, Inc. Appoints Doris Holinaty as Managing Director – Global Markets Business Wire Detroit sues blockchain real estate firm that owns rentals with hundreds of violations Detroit Free Press "Atland will be a key player in the consolidation of the real estate asset management sector". CoStar Tampa real estate investors investigated for alleged Ponzi scheme The Business Journals Home for Sale RiverBender.com Layne’s Chicken Fingers Opening in Leander This September 1851 Franchise Clean exits, real reporting: what family offices now want from real estate, highlights Ramashrya Yadav of The Economic Times Using 3D Printing in Fire Prone Areas U.S. News Real Estate Business Strategy: OKC’s outperforming real estate market The Journal Record Mountain View sees lowest property value growth in Santa Clara County Mountain View Voice |
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