LogFAQs > #945064935

Owning multiple houses to rent is a risk cause the tenant pays for the mortgage. Worse cause you sell the house. It's the same risk as if investing in stocks. Lots of average people including millionaires lost money this year. My advice would be don't keep all your eggs in one basket. I wouldn't just buy homes in one area cause of a natural disasters. I'd buy some in different areas. Same with stocks. You don't put all your money into just 3 stocks as an example. Also have a backup plan similar to an emergency fund. Lets say a tenant stops paying rent and you have to start the eviction process. Make sure you have money set aside to ride out the 2-4 months you aren't getting rent from them. Graham also mentions he does a 1 year lease which seems risky. I do month to month to avoid losing money for months if they stop paying. I can sell and buy another house and move on.

What I liked what Kevin said was he isn't blowing his money on things like yachts and other luxury toys. It seems like he still lives an average life besides getting a few high end watches. He's not out there buying tons of Gucci clothing and stuff. And him and others said typically you only need one good suit (which you can rent also). Personally I'd never own a yacht either even if I was a billionaire. I'd rather rent one for a week or something at most. Same thing with supercars. Rent one for a week or maybe do a lease. I wouldn't spend over half a million on a car. The parts and service alone is crazy high.

My rental is going good and I'm disciplined with my money. When I do start making more income I won't be spending more. I'll still live within and slightly below my means. Save up and buy another unit.

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"If you know the enemy and know yourself, you need not fear the result of a hundred battles. - Sun Tzu