How much do YOU think YOU need to retire? ...and at what age will you (and spouse) retire? (Part 1)

<p>:)…</p>

<p>Dstark, for us it depends on whether a unit is empty when we buy the building. I don’t do anything if the unit is rented. If it is empty we may do something.</p>

<p>My units are all what I would consider “b” level housing. People I rent to don’t have huge incomes, don’t have 800 credit scores. They are not expecting granite countertops with designer fixtures and solid cherry cabinets. So while I will replace cabinets if the old ones are falling apart, I wouldn’t consider it an “upgrade”. I do use decent materials - no particle board cabinets for example - but not to of the line.</p>

<p>I’ve replaced all the old wood pulley and weight windows over time, those things are a maintenance nightmare. All the clawfoot tubs have been replaced with regular tubs and showers. We don’t get higher rents for doing this, but it does make them easier to rent.</p>

<p>Deferred maintenance is a big deal when buying rental housing. You need to have a list of what will need fixing, when, and for how much, and that has to affect your offer. A lot of apartment buildings go on the market when everything is about to wear it at once and the owner doesn’t want to dump a huge pile of money into it. I’ve had to put a new roof on every single building I’ve bought, for example.</p>

<p>We hire a property manager–he charges 7%, which we consider WELL worth it, as he takes care of ALL collections, evictions, screening renters, maintenance, showings, whatever else comes up. Our properties are old and need a LOT of maintenance. He is also a realtor and aware of what market rental rates are. He does a lot of maintenance when a tenant leaves and then raises the rent for the new tenant so that it is at or near market rates. (Some of the tenants have been there for decades and we don’t want them to have to move out if we suddenly have a huge rent hike.) We really like and trust the property manager. He has done a MUCH better job than the firm we had before him.</p>

<p>Himom, my sister has that problem. She wants to sell her rental but don’t want to kick the renter out. She told me if he leaves she will sell her rental house. Interestingly enough that the house lost half the value from the peak before the housing bust.</p>

<p>Himom, yes… We want a good property manager.</p>

<p>Notrichenough, we are looking at b buildings. Very helpful post.</p>

<p>A friend, who I hope to be investing with, bought a c building. Somebody was murdered and dumped in the yard.
My friend doesn’t want any c buildings. ;)</p>

<p>Your sis could sell her place WITH the lease and tenant. Some buyers WANT a built-in good tenant, particularly if for whatever reason they aren’t going to be moving in, in the near future. We have no plans to sell our rentals until further notice–it’s nice having a stream of income and also an investment that tends to keep up with inflation. Property values in HI have always tended to be pretty good.</p>

<p>Himom, I didn’t know that, maybe I give her the information. He is a long term renter. But maybe she wants the income, she does have a lot reasons for not selling and internalizes it.</p>

<p>If she doesn’t need the money and likes the income, there can be good reasons for not selling and keeping the rental, especially if she likes the tenant. It’s another story if she needs the money, then she needs to examine other options. Real estate can be a good investment, if one doesn’t need liquidity. We like having rentals part of our investment portfolio–helps us sleep well at night.</p>

<p>She’s getting ready to retire. She’s not rich but I think she did amazing for a single person who never made much money. Always 100% in stocks and it’s obviously paid off for her. I’ll discuss her options when I see her next. Good thing is that she is only a mile from me now if this house goes through.</p>

<p>We didn’t want the tenants cleared when we bought a building, but we did require that the rent be raised to a market rate before the sale completed. If a tenant decided to move, that was ok.</p>

<p>We try to keep rents slightly below market, so a tenant doesn’t move because the rent is too high. </p>

<p>“B” vs “C” - my wife had to feel safe going to the building. If she didn’t, we weren’t interested. A murder?!? Yikes.</p>

<p>We are done buying, unless a ridiculous deal turns up.</p>

<p>Real estate is all about location. That’s what keep telling my sister. It’s not the house but she is constantly having buyer’s remorse. She doesn’t like to use her retirement money to buy a house so not perfect. She gets depressed about spending money. She’s rather continue contributing to her 401k. Obviously she doesn’t inherit the same gene I have. I made decision in less than 15 minutes for one house and less than 30 minutes for another.
On subject of cheap interest rate, it does create assets bubble. I know someone, actually the lady that did the loan on my first house, she paid cash around $2M for a house, then the house doubled to $4M a few years ago. Even during the housing bust she could rent it for $12k per month. And now I’ve heard the house is worth $6M and she gets $16k per month. The house is in a very nice ocean front area. But who would pay rent for such amount. Worse yet, this person is now living in much smaller place, not nearly as nice as her house. So it doesn’t pay to have too much money anyway if she can’t enjoy it. After a while it’s just numbers.</p>

<p>"“B” vs “C” - my wife had to feel safe going to the building. If she didn’t, we weren’t interested. A murder?!? Yikes."</p>

<p>Yeah… Yikes. :)</p>

<p>I think your wife’s safety is a good criteria.</p>

<p>DrGoogle, if you think you make quick decisions about a house… I made the decision just by looking at ours online. Had to briefly show my husband that we could afford it, and we determined that even if the inside was trashed, we’d buy it. It wasn’t, thankfully. It was based on the house being perfect for us, view, and underpriced. Then the market tanked!</p>

<p>bus, Ouch, I hope the market recovered since.
Well, my karma has always been that I buy new houses. Both my husband and I only have bought new houses. But some people take forever to make up their minds even with new houses and then have buyers remorse. But I think it’s mostly due to gene or their makeup, some people are more into details , little things bother them. I know nothing is perfect, but I’m happy with 70% of the things right.</p>

<p>I like to buy brand new houses. I bought 2 so far. Everything is clean and fresh in the house. I had the freedom to walk around the house when I did not fill up with furnitures yet.</p>

<p>@notrichenough was able to take risks and it (and the hard work with property maintenance and management) paid off. My parents’ 5 unit apt building (that dad’s construction company remodeled, more of a b for rent and amenities) sold for $350,000 - the business next to it wanted ownership and it was an easy negotiation and sale. The 10 unit and 6 unit buildings (built new - very good quality and very low maintenance,with one owner, and each having a garage for potential condo subdividing) which varied from small units in the 6 unit building, while the other had 8 two bedroom apts with two three bedroom (two level) condos on the two ends - sold for about $100,000 less than appraisal because it was in a small town and limited buyers. In a major city, all those properties would have been worth a lot more. None of us were in town, and holding on to the properties did not make sense. Dad had a loan to build the 10 unit and then later built the 6 unit; had low turnover and only after a number of years would raise rent, but mainly only raised rents when turnover (and kept in line with the market). Had a waiting list because all their units were desirable.</p>

<p>Real estate generally appreciates, but we have all seen the variation in the market with interest rates, the economy, the job market, etc.Some markets you can see are ‘hot’ and will remain ‘hot’. If you live in that market and have an interest in owning properties, go for it. Buy low with low interest rates - have to wait sometimes to find a ‘good deal’ - a property that will easily make you money and appreciate in value.</p>

<p>The next generation is going to have to deal with everything we are seeing. It is a new paradigm for all of us. My advice to them would be to have good jobs, keep their expenses low, delay having children, build up an emergency fund and do all the smart $$ things. That and be ‘prayed up’! </p>

<p>The retirement income calculator used for 401 k was using Prudential’s.</p>

<p>Posting re the condo/house/business opportunity re upkeep…I live in AZ …retirement heaven…and a new home builder (maybe Shea homes?) is advertising a certain class of single family detached homes with maintenance provided targeted both at retirees and busy families. </p>

<p>We were very picky about what we bought. They all had to have good positive cash flow from the get-go, so we have never worried about equity our what the market value is, because we never plan on selling them! It’s not easy to find properties like these, we analyzed many many buildings.</p>

<p>My kids will inherit them if all goes as planned, and hopefully they can ride then through their retirements as well.</p>

<p>TempeMom: We’re looking at Encanterra which Shea is running as a solar farm, no electric bills, and the most gorgeous facilities and amenities we’ve seen so far in AZ (three restaurants, full spa, Tom Lehman-designed golf course, pro shop, fitness center, multiple pools, etc.), with houses starting at 199K:</p>

<p><a href=“55+ & All Ages Community Queen Creek, AZ | Trilogy Encanterra | Shea Homes”>55+ & All Ages Community Queen Creek, AZ | Trilogy Encanterra | Shea Homes; </p>

<p>If you know of any other properties like this, please, please share. We think we’ve looked everywhere these past two years and haven’t found anything nicer than this for the price, but I don’t want to overlook any other options that others might know about.</p>