Bay, is the hassle with the real estate really worth it compared to stocks and bonds?
Yes. But you don’t have to choose; you can do both. I have never found real estate to be a hassle. If you do the heavy lifting in the beginning by finding the right tenants (credit score is my go to filter) you prevent a lot of future problems. For example pets are a potential problem. You can avoid all those problems by excluding tenants with pets. Pet lovers hate to hear that, but it’s true and any property owner will confirm this. Even fish can be a problem; what happens to your property when the tank leaks or spills happen? You can avoid all that by not allowing it in the first place. On the other hand, you can charge a pet deposit, pet fee, or even a monthly pet fee for people with pets. I do not allow pets of any size. Again, pet lovers hate to hear this, but the truth is for every prospective tenant with a pet, I can find ten who have no pets. The best solution to a problem is to prevent it from happening in the first place.
Whenever I have a whole house up for rent, I get calls from people asking if I take Section 8. I do not—but you cannot legally say that. Instead I tell them that I require a credit score above 800 or 820. No one on Section 8 has a score like that… so they politely go away. I know there are exceptions, but low income tenants and Section 8 tenants come with problems… and many have living habits that damage your property. Risk assessment is part of my approach and I have learned to solve problems by avoiding them before they can manifest.
