Hacker News Reader

Comment by voisin | Hacker News Reader

A more reliable side hustle than a bar would be to own some residential real estate and rent it out to respectful people. There’s a lot less work involved than running an operating business, and if the property cash flows (rent exceeds costs), you have a little bit of cash every month. There are also tax advantages via mortgage interest and other expense deductibility, and some “forced savings” as the mortgage pays down. The flip side is that real estate has been absurdly overpriced in most markets for the last decade (thanks Fed!) but the still-unfolding economic consequences of Covid19 may lead to an excellent entry point.

View on HN

COVID has also brought huge percentages of people out of work, and a coming eviction crisis. I considered getting into the landlord game last year, and I’m quite thankful now that I sidestepped that nonsense.

Last year was a new peak for housing exuberance. I agree with your decision not to buy then. For those willing and able to hold for a while, buying when the eviction crisis hits its apex is probably going to yield some once in a decade buying opportunities.

I know several people who made out like bandits buying in Florida and Arizona in 2010 and only held for 3-4 years.

> the still-unfolding economic consequences of Covid19 may lead to an excellent entry point

This kind of thing is what puts me off real estate investing. The idea that I would be a beneficiary of an enormous crisis leaves a bad taste in my mouth. I'm not stupid, I know that someone is going to make that profit, but it doesn't have to be me. Similarly, the idea of putting myself in the position of one day needing to deprive someone of their housing if they're unable to pay is something I'd strongly prefer to avoid.

There’s other ways to look at it. If someone is forced to sell, they likely took on too much leverage in the first place or didn’t save enough for a rainy day. Those decisions aren’t your fault, and by buying when prices are low, you are in effect giving them the liquidity they need which is a good thing.

Also, you never have to deprive someone of their housing if they are unable to pay. You can work out payment plans and all sorts of compromises to get through tough times and tenants will generally appreciate that flexibility.

The point remains - real estate is more stable for side income than a bar!

> The idea that I would be a beneficiary of an enormous crisis leaves a bad taste in my mouth.

Worth noting that even in "normal" times, the banks and money lenders are benefitting due to the parasitic and immoral practice of lending money with usury (aka interest), which is one of the major cause of financial crises that have and keep on happening. It's baked into the system.

I agree that renting out flats is much better (safer?) alternative to owning a bar.

> rent it out to respectful people

This is the difficult part.

Reply on news.ycombinator.com