… I don’t believe the same success can be had today with becoming a small-scale landlord in CA that one could have had buying investment RE in decades past. This is mostly due to much higher purchase prices today and therefore much higher taxes and carrying costs. Your “cautionary advice” about leaving a few Mil around for retirement (or at least 1 mil, if one is considering trying their hand at landlording) is solid.
I don’t think the financial success of 30+ year LL’s (to the degree they were successful given their actual financial investment) can be repeated today by ~new LL’s … anywhere in CA. They hung in for the long haul, through thick and thin, no matter what happened in their lives. Most of them managed their own rental properties and that is to be commended in my book.
Today’s new LL’s are untested for the long haul …. and frequently have 10x the carrying costs of pre-Prop 13 LL’s. In addition, those “old school” LL’s did most of all of the labor on their rental properties, thus saving themselves many thousands over the years and most of today’s LL’s likely do not.
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I think that anyone who locked in a mortgage payment on rental property at market value (e.g. did not grossly overpay) in the last year or so will do quite well.
They locked in at a low price in the real estate cycle at rates that likely translate into positive cash flow on day 1. There have been few times in the last 40 years in San Diego when one could have pulled this off. And no period as favorable as the last year or so.
Just look at Rich’s house payment to rent ratios. Which he says he will update soon.
