When it comes to different types of investments, real estate is one of the most popular choices aside from stocks and mutual funds. There are a lot of different ways to invest in real estate. Some of the options involve owning and managing the property yourself. Others, like REITs and crowdfunding, allow you to invest without the responsibility of managing any property or tenants.
My wife and I have been investing in real estate for about 6 or 7 years, but only through methods that don’t force us to deal with properties. However, if you’re willing to put in a little more work, income from rental properties can be a game-changer.
A good rental property will provide cashflow each month, as well as appreciate in value over time. This is one of the most proven ways to grow your net worth.
I recently had the opportunity to interview a successful real estate investor about his approach to rental properties. Andrew and his wife own several rental properties that have had a huge impact on their financial position. They’re still in their early 30’s and have been able to increase their net worth by more than $1 million in just 5 years!
This interview focuses on rental properties, but Andrew and his wife have also flipped houses and dabbled in wholesaling real estate. If you’re interested in learning more about real estate, I’m sure you’ll enjoy this interview, and you should also be sure to visit Andrew’s blog Wealthy Nickel.
- Renting vs. Buying a Home: Advantages and Disadvantages
- The True Costs of Owning a Home
- Real Estate Crowdfunding for Non-Accredited Investors
Income from Rental Property: A Realistic Side Hustle
Now, here is the interview with Andrew (I’ve added the bold and italic text to emphasize some of Andrew’s points).
Can you tell us a little bit about yourself?
My name is Andrew. My wife and I are both in our early 30s, and we have two kids, a 1-year-old boy and a 3-year-old girl. We live in Dallas, TX which is a great place to be in the winter, but not so much in the summer!
What do you do full-time?
I work for a large engineering company in a business/financial role. I’ve had a lot of different positions within the same company since graduating college in 2006. My degree is in electrical engineering, and I used that for all of 6 months or so in my career.
I rotated through engineering, operations, and finance and eventually decided I liked the business side of things best. I went back and got a masters in Economics (paid for by the company of course) which still doesn’t really apply to what I do, but I wasn’t really interested in going the MBA route, and I’ve always enjoyed economics.
When did you buy your first rental property and what was your motivation? What is your long-term goal with this side hustle?
My wife likes to say that I tricked her into becoming a real estate investor. We got married in mid-2012 and had never really talked about real estate other than where we would personally live.
A few months after we got married, I got hit with the real estate bug and I started looking to find a property that would work as a rental. I’ve always had a little bit of an entrepreneurial drive, and knew I wanted to find something that would get me out of the corporate world sooner rather than later.
In late 2012, after seeing quite a few properties and putting in some offers, we found a duplex that was on the market as a foreclosure. One side was in decent shape and already had a tenant in place, and the other side was a disaster that needed a complete overhaul.
We put in an offer of $130,000 and by some miracle we barely beat out several other investors who were offering cash whereas we needed financing, and the bank accepted our offer.