| The value of American housing sales in 2007 was | | | | become accidental landlords when renting out a family |
| $1.15 trillion with a total volume of some 5.85 million | | | | home is the better alternative to an empty house and |
| homes. More than 28 percent of these houses were | | | | second mortgage in a slow real estate market. See |
| purchased by average Americans for the explicit | | | | Figure 1, page 7 to compare rents to an average |
| purpose of renting the home to a tenant. | | | | stock investment. |
| These investors defy the popular notion of a real | | | | THE BOTTOM CANNOT DROP OUT OF A |
| estate investor as a slumlord or TV huckster. Most | | | | BASEMENT |
| investors are average Americans looking for an | | | | The principles of real estate investment are simple and |
| investment alternative to the Wall Street roller coaster | | | | the values generally understandable; anyone who has |
| ride. | | | | ever rented or bought even one home can grasp the |
| ACCIDENTAL MAJORITY | | | | basic tenets. But it takes some education to |
| Wall Street has been selling trust, reliability, and | | | | understand the mechanics of buying, holding, and selling |
| predictability. Blue chip stocks and bonds bought from | | | | this kind of investment. |
| reputable brokers were considered the safest and | | | | Rental property investment is manageable. If the |
| most potentially profitable. Recent actions by formerly | | | | property is in good condition and the tenants are |
| respectable firms and individuals have changed this | | | | respectable, the situation generally takes care of itself. |
| forever. | | | | Residential properties are the ideal long-term buy and |
| Many investors are moving away from Wall Street | | | | hold, especially when rented. |
| and into real estate and discovering its numerous | | | | MANAGING INCOME REAL ESTATE |
| advantages. | | | | Those who are new to real estate investing will need |
| No one can live in a stock portfolio. Even if property | | | | to figure out how to make the most of these assets. |
| values drop, a landlord still owns something. The house | | | | Without guidance, and without intending to, a |
| is still there, and tenants are paying rent. Under any | | | | homeowner may become an accidental landlord, a |
| circumstances, residential real estate has value to the | | | | circumstance few are naturally skilled at managing. |
| current owner, any renter, or any future buyer. The | | | | The secret to making this all work is a reliable property |
| value of real estate seldom, if ever, drops to zero. | | | | management partner. |
| Rental income provides inflation protection. | | | | Enter the professional property manager who |
| Traditionally, Americans are heavily invested in | | | | manages rental houses, condominiums and apartments |
| residential properties because of their home ownership. | | | | for the benefit of the landlord as intentional or |
| Some buy and hold houses for rental purposes. Others | | | | accidental investor. But all property managers are not |
| inherit a family home. Americans who have to relocate | | | | created equal. |