Do Dividends Play a Role in Your Investing?

[disneysteve]

i just inherited $170K in dividend stock bearing 4.2%, i plan to dump it all when its settled and buy another rental property. with a 4.2% dividend i am grossing $595 a month, i can buy a $150K rental property cash and gross $1100 a month

Good post, though not exactly an apples-to-apples comparison. Sorry for your loss though congrats on the inheritance.

What would you estimate as your net on that hypothetical property after you pay all expenses (taxes, insurance, maintenance, property management, etc.)?

[97guns]

ty so much, it was a hard time for us all. we took dad home to hawaii where he was born and raised, he is in diamond head cemetery and his resting place overlooks diamond head







he left the 3 of us a nice legacy of his hard work and achievements with his stock portfolio, almost $300K in cash and his home worth around $600K

........tax will be less than $100/month, insurance is $40/month, property manager is $65/month.....so looking at $200 in monthly expense with a net of $900

also considering a duplex at $160K with $1500 in monthly rents

[disneysteve]

tax will be less than $100/month, insurance is $40/month, property manager is $65/month.....so looking at $200 in monthly expense with a net of $900

also considering a duplex at $160K with $1500 in monthly rents

Nice. So even budgeting some money for maintenance and repairs, you're still in good shape.

[Nika]

$1,500 in rents on a $160,000 duplex? Why would anyone pay that rent when they can buy that property on a 15 year fixed for less than the rent and RE taxes?

Your area's real estate market is very strange.

[97guns]

they cant afford the down payment and their credit is bad, they are paying me 3X what a mortgage would be. i have 2 properties with mortgages of $306 and $407 and they generate $1000 and $1100 a month. the numbers were even more skewed when i entered the market in '09, the same house that im looking at for $150K could have been bought for 80K in '09.

[Nika]

they cant afford the down payment and their credit is bad, they are paying me 3X what a mortgage would be.

But then you end up with a headache of dealing with too many irresponsible people who can't pay their bills.

[97guns]

But then you end up with a headache of dealing with too many irresponsible people who can't pay their bills.

you know this from experience?

[Nika]

you know this from experience?

Unfortunately my Mother-in-Law is having those problems with tenants all the time. They have poor credit score, rent, and eventually not pay and have to be evicted (very lengthy and frustrating).

[KTP]

Unfortunately my Mother-in-Law is having those problems with tenants all the time. They have poor credit score, rent, and eventually not pay and have to be evicted (very lengthy and frustrating).

This is why I would be afraid being a landlord. What happens when the tenant brings in 5 unauthorized dogs who pee and chew up the walls, then they don't pay rent and it takes you 2 or 3 months to evict them. At least that would be my bad luck.