We've owned several rental homes over the years. We just sold our last one this year. All in all it has been a very good investment strategy for us. Watching the market, we bought low and sold high. As far as our experiences as landlords, well, that's a different story. Many good tenants, but, the rotten ones, really make an impression on you. Although, good investment, I'm glad it's all in the past. We've never just owned land or lots.

I am not sure that my story is helpful to you, but I will let you judge. We have not purchased any property with the intention to rent, nor is that in our current plans. No land, although that has been tempting.

Along with my brother, I inherited rental property in 2020. The property is in a desirble vintage neighborhood. Past renters have purchased homes within a block or two of our property. The property includes a 1919 Spanish Revival house with a remodeled garage, topped by an 2 bedroom ADU. The garage and ADU were rebuilt in 1991. This was originally my grandparents property. So far the process of owning a rental is mixed. We have had great tenants, but being an older home it has it's issues. About every other month, generally when I am out-of-town, something will need attention. The plumber and I have become good friends. Also, my mom who previously owned the home deferred a lot of the maintenance, so we are having to catch up on that. The property came with a mortgage, it will be paid off in a few years and then it will be nice extra income in retirement. We currently make a profit, nothing huge but it bus some extras or adds to the savings. We seriously thought about selling during the recent market surge but ended up keeping the property, both my brother and I really like the property and do not need to sell at this time. One thought is that my husband and I might move into the house when we downsize.

My husband and I purchased a get-away home in the Palm Springs area. Not sure if we will ever rent it out. Our development is very popular with snowbirds, so if we do not end up using the home enough of our time in the future or need income, renting year-round or seasonally is a possibility. We would not make a much of a profit on renting this property, but renting is always an option to cut expenses. So far we are just enjoying spending time here, we are in the desert about 40% of the time.

As mentioned above we do not plan to purchase a property specifically to rent and even if we did inherit another property, property tax laws have changed so that it is unlikely renting the home would be worth the hassle for the small profit.

While we certainly don’t have the experience of Allison, we have had some experience. We built a country log home (second home) years ago, and had people literally knocking on the door to buy. We finally took one up on their offer, though probably could have gotten more. Our current second home has more than doubled in value since we built in 2014. We also purchased the lakefront lot across the street, which has also more than doubled in value, maybe more since it is the last in the area. DH had second thoughts initially, but I told him the money is still there; it’s just not in a traditional account. We just sold two pieces of property we inherited from my parents and had been renting out. No thanks.

I’ve had residential rental property (single family and multiple family) and also farm land. I much prefer ”dirt.” There is very little that can be done to destroy land, although there are some ways. After my partner and I got rid of the rental property we owned, I said never again. Then I inherited more. Best day of my life was when we sold the last of the rental units.

Also consider how business-like you can be about residential rental property. DH had some long before we married. His tenant got behind on her rent and he could not bring himself to evict her. Finally when she was a year in arrears, he told her to move or he would have to evict her. Fortunately for him, she voluntarily moved. This all occurred before I ever met him.

Thanks so much for sharing your interesting perspectives and experiences. You're giving me some more things to think about. We have a favorite vacation area in New Mexico where many of our fellow Texans vacation or reside part time before retiring there, and every time we're there we talk about living there ourselves someday. We look at areas and of course peruse the current real estate listings, not intent on buying anything but really just for grins. Except that recently we've been talking a bit more about "what if" and thinking about what we might want to do if an opportunity arose. Right now we are very much kicking the tires, but it's exciting to even think about and explore possibilities.

I own farmland, and while the current rental income from it is minimal, there is no upkeep on my part. Like, Bbstx, I prefer "dirt." I have been researching recreational land for similar reasons. But this isn't land I want to live on some day. If you're looking for land for a future build, that's an entirely different scenario.

We inherited quite a bit of real estate in a neighboring state with a couple of siblings in a trust; it includes rental properties in a college town, leased farmland, timber and land that will someday be developed along an interstate highway. The rentals are taken care of by a management company so they’re no trouble to us. The timberland is a long game investment and provides lump sums every fifteen to eighteen years. At some point the land zoned for office/ in industrial and commercial use will be very profitable. We have no plans to sell any of it and the expectation is that the next generation (our three kids and their six cousins) will inherit it. Ours know vaguely that it exists but they have no idea of any particulars. We had a lake home that became a burden when our kids were all too old to want to spend lots of time there and it was sold. When we moved to this 55 and older planned community and the pandemic hit I was bored and needed a project. I mentioned to DH that I thought a furnished rental here would be a great investment and fun to decorate. He agreed and I looked at all the houses available and bought one the next week. I spent several months spiffing it up and furnishing it, then we have a couple of friends visit who stayed there and test drove it. I was very picky about renting it, passing over several prospective tenants until a traveling nurse was interested. She moved in eight months after I bought it , May of 2021, and has been there ever since. She is staying another year and is a great tenant. To be fair, we are great landlords and the rent is under market value as she has renewed 2 x and I have not raised the rent even as other rentals (very scarce here) have skyrocketed. The house has increased in value by 68 % since September 2020. No mortgage so I don’t have to worry about that. We are making money on the rental, just not as much as we could, but she takes excellent care of the house so that is worth more to me than the income.

We bought another house in the community last year for my mother and when she can no longer live alone we will probably rent that one out also.

We also owned an office building downtown for about 15 years and sold that in 2018. We had several offers to lease it but were not interested in making structural changes for a tenant.

Wow, thanks so much! There are some very knowledgeable and experienced folks here in this arena, and I appreciate the input greatly.

Things have a way of snowballing quickly with DH and me, and we have put some inquiries out on an improved 20-acre parcel of land that appears to be attractively priced. I'm eager to learn more, although there would be many considerations if it turns out to be something we want to look closer into pursuing.

It's fun to dream though. Some here may know that my heart and soul "reside" in the high desert, and this looks like paradise to me.

"I'll add my 2 cents. (I'll delete my post in a few days) "

Why?

Ida, that appears to be a beautiful piece of property. DH and I purchased 10 gorgeous acres in CA years ago with the idea of possibly retiring and building on it. We held it for 10-15 years and broke even. We went into it with the idea that it could go either way (a great investment or not so much) and whatever happened would be fine. From what I've always understood raw land is a crap shoot. I can see why you are tempted!

My husband and I purchased land in a mountainous area 30 minutes outside of the city with the plan to build. After a year long process of surveying and having a custom design created, we discovered the design was so far out of our budget (2x) that we could not build. So we put our plans on hold. We still own the land in addition to our house in the suburbs of the city. We've owned it for about 5 years. I still hope to be able to build someday, but it's not a certainty. As everyone knows, building costs skyrocketed in the last few years and now of course mortgage rates are quite high. In the meantime my husband switched careers from one that was very financially limiting to one where after a few years his salary should be increasing dramatically. In the meantime, the land is becoming increasingly scarce in the area and increasingly desirable. My thought is that for us, it is either a possibility for a place to build a home or if we find that is not possible, it's a reasonable investment. It's not without any cost: we pay a few hundred dollar HOA every year and a $60/month water bill for no water at all.

We bought 30 acres raw land about an hour and a half from our house in 2000, rented it for crops, then in 2005 halved our crop acreage and started building/using as a weekend home, moved in full time in 2011, with DH commuting. We still rent for crops, which covers some expenses but, more importantly for us, in return gives us stable access to our farmer/renter's hay crop. DH goes into office on variable schedule, his convenience, since 2020.

The area has changed in some predictable ways - the pretty location that attracted us is now a wedding venue magnet for the city folks, with the resultant airbnbs etc., but a friend just had to call an ambulance at 3 in the morning and I was surprised to hear we had ambulances. If we have a fire, it's not going to be saved. It's certainly not an area I can imagine living in as an elderly widow. Luckily, when we/I/he sells, the value of the home with remote working as well as the cropland has increased.

We inherited a house and some land some time back. We remodeled (updated mainly) the house and rented it for over five years. We were lucky and had good renters, although we had a few issues with our first renters (young and newly married). The house was on a couple of acres and then there were a few acres behind the house (wooded) that connected to a main road. We had several inquiries about the land over the years we owned it. We considered selling the land separate, but when a neighboring family showed interest, we ended up selling both land and the house to them. The small neighborhood (8 homes on the road, most with acreage) had been a close-knit group of friends and family. The couple that bought from us had one remaining parent living in a house that belonged to my aunt and uncle. They are renting the house out that we sold them but have plans for one son to move into it at some point and the couple themselves plan to build on part of the acreage. So while we made a very good profit, we were also so happy to hopefully be able to retain the "feel" of the area where we grew up. : ) Good luck!

“Things have a way of snowballing quickly with DH and me, and we have put some inquiries out on an improved 20-acre parcel of land”

Does ”improved” mean that water is available? Be sure to check carefully about where the water is.

My brother purchased a beautiful piece of Idaho years ago. After purchasing, they learned that there was no water even if they drilled deep. Deep meaning through to the center of the earth. They held on to the land for many years, did sell it at one point advising the buyer that their experts could never find an affordable way to get water.

We have had rental properties throughout our marriage. Luckily, have never had a tenant problem.

I've not owned 2nd properties, but both of our sets of parents did and we were responsible for caring for their homes here while they were at their other homes, and in the case of my folks also had to deal with tenants while they were away as they also bought and rented out properties. Even though I've toyed with a lake house or beach house, one of the key reasons why we are not doing that is the amount of work involved. It can be a real headache.

My take is, unless you are planning on finding that perfect spot to build on in the future, or that market conditions are such that it would pay to buy now and hold to build on later, I'd suggest not doing it. There are financial instruments available that will allow you to take advantage of the real estate market without all that work. And there are other non-real estate financial investments that will potentially yield as much if not more that also don't entail any work. If investing wisely, that will allow you to buy your dream 2nd home in the future when you're ready for it.

Of course if you have a real hankering to get into the real estate market and do it as a business, more power to you. But, given our experience, it's not our thing for sure.

It seems to me that your primary interest is real estate for "consumption" rather than "investment," and those are two very different answers.

Coming from California, you'd think I'd be all over the idea of "land for future builds". But here we also have the remenants of The Salton Sea (link below). I actually know someone who's family has/had property there.

That being said, a couple jobs ago we were considering investment property as an option. Instead, we chose to live well below our means. That turned out to be a huge advantage due to unforsean circumstances and provides us with way more options than a second property would.

https://en.wikipedia.org/wiki/Salton_Sea

My husband and I bought a lovely lot on 15 acres very close to Disney maybe 2 years ago. I posted about it here and the designs for our new house. And about the trouble we had getting a permit to get a driveway because some parts of the land (not the part we were building on) are wetlands.

We just listed it for sale last week. Our plan was to build our dream FL house but after spending a like a year finally getting the permits, COVID happened and we couldn't find a custom builder who would take on the project. Now we could probably find someone to build but we just don't feel like going through the time and hassle w/ now 2 young kids.

We also fell in love with another neighborhood and our circumstances changed (the dog who could NOT be on less than 5 acres due to his loud and frequent bark passed) and our budget got bigger for our house thanks to some changes to my work situation which has enabled us to be able to buy something we like in this other neighborhood.

So we're going to sell it and buy something. It's a little disappointing not to be able to use the plans we lovingly and time-consumingly drew up, but we feel we will be much better off taking this other route.

Based on what other properties in the neighborhood have sold for recently and are currently listed for, we stand to make a very generous profit and come close to doubling our money (we paid cash for the lot so haven't owed interest).

I still wouldn't do it again. It was a horrible pain to deal with the permits. And our realtor said land takes a long time to sell (We priced our lot well below other lots in the neighborhood that are currently listed because we'd be happy with the profit at that price, but she still thinks it will take time.

That being said, I've got a lovely lot for sale if you'd like it ;) Private lake and all.

I live in a semi-rural area of NM. I moved here from Southern California roughly 19 years ago and absolutely love it. When we first moved here though, there were things I did not know to even research. You may be ahead of me there but just in case:

1. As mentioned above, check the water situation. My guess is that on a lot that size you would have a well, so the drilling depth is important. There are some areas with water co-ops or shared wells. If this would be the situation, definitely check the financial stability of the co-op or the cost sharing agreements. Many co-ops do not have the funds to address problems as they arise. In my area, some wells are going dry and people are hauling water to their place, which would also limit the viability of selling their homes, too.

2. Related to ne would be the septic. I know of some sites that have required expensive systems because the area is too rocky, etc for digging.

3. High speed internet has been lacking in the state. There are talks of improving it, but that could take a long time to get off the ground. I am only 30 minutes east of Albuquerque and the fastest internet we had for a while was 3 mbps. My area finally got a line of site internet provider where I do much better now but waiting for it to be available took a long time.

4. Roads: Many rural roads in NM are private which means that they are not maintained by local authorities. Most of the time this is fine, but when there is a wet monsoon, or a heavy snow, there are many roads that are unpassable and people are stuck in their homes. In the winter time, it is not as bad because once the mud freezes you can drive on it, but the warm days mean being stuck at home. Also, during the heaviest winter weather, the rural roads are plowed the least often and they are often plowed last. Private roads are not plowed by the county when there is snow. Granted, the gravel roads that are supposed to be maintained by the county does not guarantee how often they actually do it. The flip side of the snow equation, is that I have wonderful neighbors where somebody has come out and plowed the roads in our subdivision. There are quite a few tractors and ATVs with snow plow attachments that it has not been an issue for me, but there are many others who are not as fortunate.

Looking at land can be exciting. I hope you can find that magical place that speaks to you.

I 100% agree with mtn - the answers are very different between buying as an investment, vs. buying it to use yourself (even if only eventually, some day....).

Lots of folks here are smarter than me with either scenario. :-) I had a 2nd house I had toyed with the idea of turning into a rental.....looked into it, and decided the potential profit didn't outweigh the potential losses and heartaches.

I currently own a 2nd home in a beach town, that will be my forever home some day. I had no delusions that it would be cheap....had no idea how expensive it could end up being. I don't regret it, I love going there to get away now, will love living there full time in the future.

However if I add up the carrying costs over time, and added those into the amount of house I will be able to buy later on down the road.....wow.

I could mitigate almost all of that if we rented it out in the summer months, but there is zero chance of me doing that - so pretty little money pit it is. LOL.

(ETA - if you specifically mean just land, that's a little easier. I bought land early, knowing we would eventually build a house on it, similar to Beagle's story. Mine was a little easier though in that the raw land didn't have quite the hurdles on it than her's did to building on it. You still have to budget for clearing the land, various permits - and trust me, some permit fees are shockingly high - either water/sewer connection fees or more permits to drill wells/septic systems, etc.. All of those charges/fees/taxes can be somewhat known if you do your due diligence before you buy, and the nice thing about land is that the carrying costs can also mostly be figured out beforehand.....)

Thanks so much to all who took the time to comment and share their own experiences. Obviously, situations and economics and locations (etc.) make comparisons truly impossible, but it's still interesting to me to learn what you've gone through and what your overall impression has been of your experiences.

We are no longer considering the 20 acres. It's a bit too remote, and that's too much property should we decide we wanted to build on it in the future. We'll be older then and in reality, while we would adore those views, it would very likely be biting off more than we're prepared to chew going into our later years. We've shifted focus to properties in town and just outside of town in a planned community. There is a ton to consider still, but we are looking at this from an investment standpoint AND from a personal use standpoint -- definitely two very different scenarios, each with its own very specific considerations. Truly, the number of trusted advisors one needs going into something like this is a bit mind-boggling.