Can anyone help with Rental Property?

[Newguy99099]

I have some extra money and have talked with a cousin about pooling some of our money to invest in a rental real estate property. Neither of us have done such things and I am hoping to get some advice from people who have done this before. Can anyone suggest the best ways to find these type of properties, or pitfalls or things we should be worried about?

Also a friend suggested we are better off investing in a mutual fund rather than rental properties, can anyone speak to which is the lower risk or has the higher ROI?

Thanks!
Mark

[disneysteve]

I have some extra money and have talked with a cousin about pooling some of our money to invest in a rental real estate property.

I'm confused. In another post, you say you have $50,000 in student loan debt and you hope to buy a house within 6-18 months. How do you plan to save up a 20% down payment, pay off your debts, and but rental property all at the same time?

I would say to forget about the rental property. You don't even own your own home yet and you have a lot of debt. You need to step back and go slower, working out a plan along the way to do things in a logical, responsible order that doesn't involve taking on a great deal of risk and even more debt.

[Newguy99099]

The rental property idea is for the "investing" half. You mentioned investing half my money and paying half to debt. I was curious to learn more about rental properties rather than something like investing in a mutual fund. That's all.

[disneysteve]

The rental property idea is for the "investing" half. You mentioned investing half my money and paying half to debt. I was curious to learn more about rental properties rather than something like investing in a mutual fund. That's all.

I see now. No, I would not be getting involved with rental property. When I say "investing" I do not mean "taking on a bunch of new debt". I would also never advise you to get involved in a business venture with another person other than your spouse. That adds a whole list of potential problems that are entirely avoidable. If and when you are at a point where investing in real estate makes sense for you, do it on your own.

[Newguy99099]

Thanks Steve. Are there any forms of investing you recommend or books you might suggest? I hear many people talk about growth income mutual funds and index funds. Thoughts?