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  #31  
Old 02-02-2017, 06:54 PM
hunting4? hunting4? is offline
 
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Originally Posted by 6speedGTX View Post
We have a couple of rentals, it is a steep learning curve without the right support. I would suggest joining a real estate group such as REIN/Real Estate Investment Network, and attending any classes and seminars that you are able to make it to. The REIN program called ACRE is an outstanding weekend course, and no they don't try to sell you anything. Just good information.
Yes the acre program is a GREAT course. Just dont become member. Not always the most reliable advice and a lot of hidden things going on behind the curtain!
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  #32  
Old 02-06-2017, 08:28 PM
79ford 79ford is offline
 
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You gotta think if you spend 400k to make 15-20 k per year in rent before expenses, time and head ache then compare that to some investments that earn 3-5% per year and 12-20k per year free of expenses....


Myself as a renter have had rent reduced and there are soo many properties for rent these days it would take days to go through the thousands and thousands of vacancies in my area.... on kijiji there are soo many rental ads i dont really get much past a few days history because going through a month worth of postings would take forever.

I got a free month and reduced rent plus satelite etc included now and i could still go find another place to shave another 200-300$ per month off if i wasnt so lazy when it comes to moving.

Seems like it would be a tough slog as a landlord, sloppy house prices, declining rent, rental vacancies increasing and house prices despite seeing some level or down factor are still about as expensive as they were a few years back yet the rental market is glutted out
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  #33  
Old 02-06-2017, 08:53 PM
ditch donkey ditch donkey is offline
 
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You gotta think if you spend 400k to make 15-20 k per year in rent before expenses, time and head ache then compare that to some investments that earn 3-5% per year and 12-20k per year free of expenses....


Myself as a renter have had rent reduced and there are soo many properties for rent these days it would take days to go through the thousands and thousands of vacancies in my area.... on kijiji there are soo many rental ads i dont really get much past a few days history because going through a month worth of postings would take forever.

I got a free month and reduced rent plus satelite etc included now and i could still go find another place to shave another 200-300$ per month off if i wasnt so lazy when it comes to moving.

Seems like it would be a tough slog as a landlord, sloppy house prices, declining rent, rental vacancies increasing and house prices despite seeing some level or down factor are still about as expensive as they were a few years back yet the rental market is glutted out

True, except I don't pay $400 000. I pay 20% of that, $80 000. You cover the costs, the property makes a marginal profit, and appreciates.
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  #34  
Old 02-06-2017, 09:35 PM
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Our rentals in Calgary have been a great overall experience. We keep it simple, very simple. Have a good product at a good price and it will get rented. Yes, we've had to lower the rents in this past year but it's still good. References are a must and tenants are required to get their own insurance. No management companies.

I would recommend it to anyone. One thing to be sure of is have to our very own reserve fund for the potential they go un rented.

Rent covers the mortgage, condo fees, taxes and improvements with a very small profit. It's no get rich quick scheme.

When we look at the appreciation of the condos in these last few years that's where we see the rewards...
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  #35  
Old 02-07-2017, 10:20 AM
Scott h Scott h is offline
 
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Our rentals in Calgary have been a great overall experience. We keep it simple, very simple. Have a good product at a good price and it will get rented. Yes, we've had to lower the rents in this past year but it's still good. References are a must and tenants are required to get their own insurance. No management companies.

I would recommend it to anyone. One thing to be sure of is have to our very own reserve fund for the potential they go un rented.

Rent covers the mortgage, condo fees, taxes and improvements with a very small profit. It's no get rich quick scheme.

When we look at the appreciation of the condos in these last few years that's where we see the rewards...
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  #36  
Old 02-07-2017, 11:12 AM
79ford 79ford is offline
 
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Originally Posted by ditch donkey View Post
True, except I don't pay $400 000. I pay 20% of that, $80 000. You cover the costs, the property makes a marginal profit, and appreciates.
or you just assumed 320 000$ debt to make the few hundred bucks between rent and mortgage/upkeep/taxes


To me I can put 150k or so down on a 450 000$ house which leaves me with a 1500$ mortgage add in 300$ month for taxes, 200 for insurance etc I am at 2000$ to own a 450 000k house

I rent that for 1400/mo with cable and heat included, and pay no taxes or repairs and some one else mows the lawn.

I don't see where some one makes money buying the house then renting it to me in the world of record high home prices and slumping rent.
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  #37  
Old 02-07-2017, 12:05 PM
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Dean2 Dean2 is offline
 
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Originally Posted by 79ford View Post
or you just assumed 320 000$ debt to make the few hundred bucks between rent and mortgage/upkeep/taxes


To me I can put 150k or so down on a 450 000$ house which leaves me with a 1500$ mortgage add in 300$ month for taxes, 200 for insurance etc I am at 2000$ to own a 450 000k house

I rent that for 1400/mo with cable and heat included, and pay no taxes or repairs and some one else mows the lawn.

I don't see where some one makes money buying the house then renting it to me in the world of record high home prices and slumping rent.
If rents on 3 bedroom full houses have dropped that far then you are right that there is no money to be made in owning one. A rental property must at minimum cover its mortgage, taxes and operating costs, otherwise you investment is shrinking.

One of the reasons I got out of residential rental properties in Alberta was the imbalance between costs and rents along with the punitive Landlord Tenants Act here.

I can put money into Bank shares, Pipelines etc and earn 4% or better dividends, that are tax free for the first $41,000 per year for each of me and my wife. The tax status makes dividend income equivalent to 7-8% net return from property or interest, and the capital gains on the stocks isn't taxed till I sell them, just like rental houses.

I strongly doubt you will find a rental property that returns 8% net. 450,000 house rented at even 1,600 a month, no mortgage, taxes 3,000 a year and insurance of $1000, repairs and misc $1,500. Total revenue 19,200, less expenses makes net revenue $14,200 or a 3.04% return, After tax you are making 2% at best.

Even if you bought in 2007 and went through the 08 drop, shares have gone from 60 to $100, so more than double and paid you a dividend on top.

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  #38  
Old 02-07-2017, 01:56 PM
wildwoods wildwoods is offline
 
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If a person buys rental property with he sole hope of gains coming from said rent, then it's a bleak investment. Like anything the trick is timing. A properly bought horse is 50% sold. But low sell high. In this boom bust market, stews purchasing can lead to incredible return. There are risks but traditionally is a sound move. I would suggest nobody to purchase if you can't afford to sit vacant for a few months.
My $.02
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  #39  
Old 02-07-2017, 03:41 PM
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Originally Posted by wildwoods View Post
If a person buys rental property with he sole hope of gains coming from said rent, then it's a bleak investment. Like anything the trick is timing. A properly bought horse is 50% sold. But low sell high. In this boom bust market, stews purchasing can lead to incredible return. There are risks but traditionally is a sound move. I would suggest nobody to purchase if you can't afford to sit vacant for a few months.
My $.02
Any investment that does not return a fair annual compensation and relies entirely on a gain in the capital asset's value is generally a very poor investment. Unless you are 100% certain the gain in capital value is going to exceed 10% a year I would never buy it. Even bare land should return 8-10% a year from surface rights or land lease for farming, storage etc PLUS capital appreciation.

The reason most people invest in rental property is to build themselves a monthly annuity plan so they have income in retirement. If you start far enough in advance, buy right and can get adequate rents this makes sense. If rents no longer represent an 8% return on the current value of the property, sell it and invest in something that will give you that return.
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  #40  
Old 02-07-2017, 05:23 PM
I_forget I_forget is offline
 
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Any investment that does not return a fair annual compensation and relies entirely on a gain in the capital asset's value is generally a very poor investment. Unless you are 100% certain the gain in capital value is going to exceed 10% a year I would never buy it. Even bare land should return 8-10% a year from surface rights or land lease for farming, storage etc PLUS capital appreciation.
You're just pulling numbers out your @$$. A quarter section of land worth $400k right now rents for $15k. You think 8% capital appreciation is easy ? Consistantly? It's not
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  #41  
Old 02-07-2017, 05:28 PM
I_forget I_forget is offline
 
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79 Ford the resident financial guru. Still renting lol. Thought you'd have paid cash by now for a house. PS if being a landlord is too hard/ headaches for you I'd recommend never starting a business. 8-5 working for the man is best for you.
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  #42  
Old 02-07-2017, 05:36 PM
hunting4? hunting4? is offline
 
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Default Well.

I bought 19 properties prior to 2005. They all doubled and then dropped a bit in value.

We have had good and bad times with tenants.

Have 6 left and 4 are paid off. But along the way it paid off our house and all our vehicles. Paid for many trips with the kids and affords us a little better quality of life.

When I retire in 7 years we will have a monthly income of around 7K a month. Regardless of what kind of work I choose or not choose to do when I grow up and find a real job.

Started all of this with $30000.00

It has not always been a bed of roses. But in the long run it has done better than my RRSP's after fee's that's for sure.

I am looking for property now but it would have to be a pre forclosure or something because no way I am paying today's prices.
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  #43  
Old 02-07-2017, 05:40 PM
I_forget I_forget is offline
 
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Originally Posted by hunting4? View Post
I bought 19 properties prior to 2005. They all doubled and then dropped a bit in value.

We have had good and bad times with tenants.

Have 6 left and 4 are paid off. But along the way it paid off our house and all our vehicles. Paid for many trips with the kids and affords us a little better quality of life.

When I retire in 7 years we will have a monthly income of around 7K a month. Regardless of what kind of work I choose or not choose to do when I grow up and find a real job.

Started all of this with $30000.00

It has not always been a bed of roses. But in the long run it has done better than my RRSP's after fee's that's for sure.

I am looking for property now but it would have to be a pre forclosure or something because no way I am paying today's prices.
Congrats. Glad you have done well
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  #44  
Old 02-07-2017, 07:22 PM
79ford 79ford is offline
 
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Originally Posted by I_forget View Post
79 Ford the resident financial guru. Still renting lol. Thought you'd have paid cash by now for a house. PS if being a landlord is too hard/ headaches for you I'd recommend never starting a business. 8-5 working for the man is best for you.


From a renters perspective the market is glutted, i kinda want to move to take full advantage of the glut but sorting through thousands of ads for rentals is quite the task.... i fail to see the benefit of buying near the top of the housing market while the rental market is dropping.

There are sooo many rental adds on kijiji or where ever that it just isnt really feasible to go through all of them.

Oil is only at 50$, by no means is alberta going to roar anytime soon especially with the ndp around and trudeau in power,lol
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  #45  
Old 02-07-2017, 11:10 PM
sigma1 sigma1 is offline
 
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A renter may be a financial genius in the right market just like the landlord once was.
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  #46  
Old 02-07-2017, 11:39 PM
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Originally Posted by ditch donkey View Post
True, except I don't pay $400 000. I pay 20% of that, $80 000. You cover the costs, the property makes a marginal profit, and appreciates.
Tell that to people in Florida and Phoenix. Heck even people who lived through the 70's and 80's here. Interest rates come back and a lot of these people with rentals are going to be in for a world of hurt.
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  #47  
Old 02-07-2017, 11:44 PM
raab raab is offline
 
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Originally Posted by wildwoods View Post
If a person buys rental property with he sole hope of gains coming from said rent, then it's a bleak investment. Like anything the trick is timing. A properly bought horse is 50% sold. But low sell high. In this boom bust market, stews purchasing can lead to incredible return. There are risks but traditionally is a sound move. I would suggest nobody to purchase if you can't afford to sit vacant for a few months.
My $.02
Anyone who knows when to buy realestate would tell you now is a horrible time to buy. You want to buy when there is high interest and high inflation. That's when you'll get the best deal on your house, and it will appreciate quickly due to inflation. With inflation at less then 2% per year and record low interest rates I'd be wary of buying anything and expecting capital gains on it in the next 10 years.
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  #48  
Old 02-08-2017, 01:38 AM
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Originally Posted by I_forget View Post
79 Ford the resident financial guru. Still renting lol. Thought you'd have paid cash by now for a house. PS if being a landlord is too hard/ headaches for you I'd recommend never starting a business. 8-5 working for the man is best for you.
You join the discussion late, and then add a bunch of smart aleck comments that add nothing to the discussion. This is the quintessential definition of trolling. Please go troll somewhere else.

79 Ford's decision to rent in the current environment, and the past few years actually makes a whole bunch of sense. It leaves him bags of money to invest in something with a much higher rate of return that having bought the house he is renting.

Hunting4

You got in at a good time, prices from 1995 to 2005 were much lower than what they became by 2102. You owned through a period when rental demand and rates were high and when house prices were rising quickly due to a shortage of supply. The house I bought in Calgary in 2004 tripled in value by the time we sold it in 2012.

Now going into retirement you truly will have a good steady income to rely on. I have never said you can't make money in renting residential properties, my point was, now is not the time to be buying in, at least in the Alberta market. House prices need to come down a whole lot more so the rental income lines up with the price a whole bunch better.

We are going to be a long time before we see major gains in house prices here in Alberta, and current rents don't amortise the current purchase prices, let alone if interest goes up 2 or 3%. If we were talking about buying rentals in Kelowna or Toronto, whole different discussion.
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  #49  
Old 02-08-2017, 02:16 AM
I_forget I_forget is offline
 
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Originally Posted by Dean2 View Post
You join the discussion late, and then add a bunch of smart aleck comments that add nothing to the discussion. This is the quintessential definition of trolling. Please go troll somewhere else.

79 Ford's decision to rent in the current environment, and the past few years actually makes a whole bunch of sense. It leaves him bags of money to invest in something with a much higher rate of return that having bought the house he is renting.

Hunting4

You got in at a good time, prices from 1995 to 2005 were much lower than what they became by 2102. You owned through a period when rental demand and rates were high and when house prices were rising quickly due to a shortage of supply. The house I bought in Calgary in 2004 tripled in value by the time we sold it in 2012.

Now going into retirement you truly will have a good steady income to rely on. I have never said you can't make money in renting residential properties, my point was, now is not the time to be buying in, at least in the Alberta market. House prices need to come down a whole lot more so the rental income lines up with the price a whole bunch better.

We are going to be a long time before we see major gains in house prices here in Alberta, and current rents don't amortise the current purchase prices, let alone if interest goes up 2 or 3%. If we were talking about buying rentals in Kelowna or Toronto, whole different discussion.
Whatever you say lol. 79ford hasn't posted his returns so you can't assume he's making money Many people have investment money in the past few years. If he'd show his gains id believe him
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  #50  
Old 02-08-2017, 04:53 AM
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i dont have rental houses anymore. it all depends on the local economy.
i would however toy with a commercial type property though. like a 40x60 type shop 16' walls on a acre or two in a industrial subdivision with apartment inside it. i think it is zoned c-1. commercial with a single dwelling.
a single tenant above and lease the bays to a (ie: mechanic, pump repair, etc. ) or a owner of a new business looking to 'live the dream' .
commercial pays higher rates on a 'cheaper' building for possibly longer but may be empty longer.
at least then on the plus side it would be a heated space for my crap too.
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  #51  
Old 02-08-2017, 05:42 AM
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Buy a duplex type building, live in one, rent the other side out, fix the side up you life in over time, switch sides repeat then sell all over time as another pays down your mortgage.
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  #52  
Old 02-08-2017, 09:09 AM
Etownguy Etownguy is offline
 
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We recently bought our first rental - a 2 unit place.

We looked hard at the Edmonton area but could not find a place where the numbers worked. We ended up buying in a smaller market outside Alberta where the purchase price to rent ratio made more sense.
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  #53  
Old 02-08-2017, 11:22 AM
chasingtail chasingtail is offline
 
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Quote:
Originally Posted by roger View Post
i dont have rental houses anymore. it all depends on the local economy.
i would however toy with a commercial type property though. like a 40x60 type shop 16' walls on a acre or two in a industrial subdivision with apartment inside it. i think it is zoned c-1. commercial with a single dwelling.
a single tenant above and lease the bays to a (ie: mechanic, pump repair, etc. ) or a owner of a new business looking to 'live the dream' .
commercial pays higher rates on a 'cheaper' building for possibly longer but may be empty longer.
at least then on the plus side it would be a heated space for my crap too.
With the way property taxes are going on commercial properties it's getting more and more difficult. Everywhere is different but some areas of the province it gets ridiculous. Calgary for example is 5X the residential rate.
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  #54  
Old 07-23-2017, 10:38 PM
Tfng Tfng is offline
 
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Did you buy a property sewerrat? How is it working out?

I found this thread in a search and thought I would add to it with a slightly different question for the great minds of AO.

I'm in the market for a bigger house for my young family. The housing market in my city is down and there is a large inventory of houses for sale.

I've been to the bank and would qualify for a mortgage in the price range I'd like/need to spend using the equity in my current house as security.

I'm considering renting my current house out. I'd like to rent it for a few years and see where the housing market goes. If renting was going good I would likely just keep it but if renting was becoming too much of a hassle I'd sell it.

I think I could remortgage the rental over a longer term so I could pay both mortgages if I had to. It wouldn't be any fun but I think it could be done. I'm handy so I could fix nearly anything that needed fixing in the house.

Should I just sell it and accept a "loss" or hope the market is better in five years?
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  #55  
Old 07-23-2017, 11:12 PM
ryeguy21 ryeguy21 is offline
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if your selling in a dip your buying in a dip. Had you sold at the peak you would be paying a higher premium for the larger home.

Its more of a wash then a loss.
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  #56  
Old 07-23-2017, 11:18 PM
Tfng Tfng is offline
 
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That's true ryeguy but by renting it out I could buy another one in a dip and sell this one closer to a peak don't you think? That's making an assumption that there will be another peak in the next decade. I'm 39 so I've got time.
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  #57  
Old 07-23-2017, 11:34 PM
ryeguy21 ryeguy21 is offline
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Very true. Assuming you've crunched carrying costs to figure out your roi then i would rent it out. Ive got a couple rental properties and my rent has dropped drastically over the last 2 years... quality of tenants isnt as great. For me the rental market is a lot more competitive.

You could post your place for rent and see what sort of responses you get.

You'll need to factor your costs to buy a new place.. for example cmhc fees if your not placing 20 percent down. You would avoid these if you ported your mortgage.
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  #58  
Old 07-24-2017, 12:10 AM
Tfng Tfng is offline
 
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Thanks ryeguy21. I have only roughly looked at the numbers. I would be leaving about 100k of equity in the house and I'm shopping in the 350k area.

My costs would be cmhc, interest on the rental mortgage as well as the mortgage payment, taxes, incidental repairs.

My roi would likely be minimal I would think. I'd have to be banking on appreciation to make any great gains other than keeping the mortgage paid.

It sounds like I need to do some homework.

I've done some research into rental pricing and seems at today's rates the rental should be paid off in ten years.
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  #59  
Old 07-24-2017, 06:22 AM
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sewerrat sewerrat is offline
 
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Did you buy a property sewerrat? How is it working out?
Yes we did we purchased one last April, very nice bungalow it was super clean and tidy.

We have a property management company looking after it and so far it has been great.
The property manager does all the ugly work like screening tenants etc. they only take 9% of the months rent. So no complaints.
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  #60  
Old 07-24-2017, 08:05 AM
ryeguy21 ryeguy21 is offline
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If your rental can be paid off in 10 years i would jump all over that. Thats miles ahead of most... and in reality 10 years will come quickly if you can find good tenants.
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