Why Would Anyone in Their Right Mind Become a Landlord?

Money Magazine’s September 2010 issue includes a Special Report entitled “10 Ways to Make Real Money Again”, two of the 10 being real estate investments: #4 Rental Properties and #8 Distressed Commercial Real Estate. Not surprisingly, both come with serious warnings. Distressed commercial real estate is high risk with an uncertain return, possible devastating capital calls, unpredictable appreciation and is rarely available in a REIT. Residential Rental Property brings with it the risk, as they put it, that “One destructive renter or decline in a locale’s quality of life could wipe out your return.” Ouch!

So, again, “Why would anyone in their right mind become a landlord, either commercial or residential?”

In the past there was no readily available alternative; today there is: HECS investing. No renters, no taxes or insurance, no risk of vacancy or vandalism and no maintenance expenses to eat away at your profits. And no 24/7/365 responsibilities for your renter’s happiness: i.e. no midnight phone calls, 2 am trips to the rental to fix the toilet or letters from a tenant’s attorney threatening to sue you.

So, one more time, “Why would anyone in their right mind invest in rental property?” when they can purchase fractional interests in owner-occupied residential real estate, deposit it in their portfolio and let it do its magic. Not all HECS products are the same, of course. Shop carefully.

HECS equity investments in real estate: the safety of real estate investing with the blend of flexibility, liquidity and returns that exceed bonds, stock and even T Bills.