Comment by sidlls | Hacker News Reader

Comment by sidlls | Hacker News Reader

When my family moved to the Bay Area we owned a home. Rather than sell, we engaged a property manager to rent it out. We had a few years of excellent income from that which essentially paid the PITI (principal, interest, taxes, and insurance) on our FHA-financed home (including holding a "reserve" for repairs, vacancy, etc.) plus a (very small) profit. It definitely lit a fire in my belly to switch out. I find software development to be incredibly boring and, worse, having a higher quotient of immature and unjustifiably arrogant people than I find myself able to tolerate lately.

I haven't made the switch just yet, because I want a slightly larger bank account before I draw down from it to finance a couple of purchases. I've also basically self-taught for a real estate license. One doesn't need the license to buy and sell real estate for oneself, but the knowledge is very handy and I may get a license anyway just to be able to work with an agency for the experience of it. Doing this sort of thing requires one to build skills that translate to any industry (sales, "people skills", etc.).

Personally, I find going into real estate borderline immoral. Competing with people who want to own homes raises prices and makes people spend less on more interesting and intrinsically valuable pieces of the economy. There is some place for it, but right now there is far far too much money and too many people vying to get maximum profit out of a basic human need.

I'm on a similar page as you but I think that 'flipping' houses is okay. The house next door went for sale and we were thinking of buying it but it was a complete dump. Some guy bought it for a "steal" around $600k, fixed everything up, and sold it for around $850k a few months later. The plus (or downside) is that your new neighbor most likely is more financially well off than someone who would buy a cheaper house.

It's not more immoral than any other sales job or being a lawyer, trader, politician, tax accountant, banker, financier... 90% of white-collar jobs are immoral. If you want to be moral, become a garbage collector, builder, janitor, etc...

It isn't any more immoral than, say, working to trade on personal information or for a defense contractor as a software developer.

For clarity: that is to say it can be immoral, but isn't immoral just because.

why not just buy something, rent it out and keep doing your job? it's not like you need to be on it full time to rent out a place. even if you have to do quite a bit of diy. i rent out rooms in my place and it's just a perfect side gig.

How do you find reliable renters? Airbnb or some other?

my renters have proven to be very reliable so far. you have to realize: most people are reliable. people are not looking to stay for two months for free and then get thrown out of the door. most people are not bad people. so whatever you do , it will likely work.

i use fb groups and my personal connections 50-50. i would not use Airbnb because it is usually for the short term. it is important to talk to people before you let them rent. try to judge their character. in general i avoid people who seem too cold/business-like about it, because i know people who like me stay longer and will be more fun to live with.

The feelings are mutual for the most part and the interest shared. I think that'll be a good transition for you. Would you be staying in the Bay area where real estate is hyper expensive or start elsewhere?

Elsewhere. The Bay Area suffers a number of problems for people in my position and with an interest in real estate. Firstly there is the moral issue one commenter noted above: the artificially scarce housing here makes it so that the landlord class is effectively fomenting homelessness for all but the affluent and wealthy. Second there is the issue of ROI. I'm not in a position to purchase an apartment building or capital real estate, and anything smaller in scale is, frankly, a dumb use of money. I can get 5-7 times the house for my capital in plenty of places outside the Bay Area with better cash flow and without engaging the moral issue.

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