‘You're out, you're done’: Dave Ramsey tells a frustrated Michigan landlord to ditch his duplex and move on — 3 ways to invest in real estate without the headaches of having tenants
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If you ask Dave Ramsey, there’s no room for dilly-dallying when it comes to real estate investments.
When a young Michigan landlord named Joe called into The Ramsey Show for advice about what to do with a duplex he no longer cares for, Dave Ramsey gave it to him straight.
“You’re out, you’re done,” the personal finance expert said.
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Joe admitted he was tired of having tenants — and of living underneath them — but he remained uncertain about how to handle his investment. He asked Ramsey whether it made sense to keep the duplex as a rental property and use the income to live elsewhere.
‘I would sell the crap out of this thing,” Ramsey responded during the September episode.
“Someday later, you may want to be a landlord again, but right now, you’ve had your trip on the crazy train and you’re tired of the crazy train. That’s ok. Take a break from crazy. Go get you a house,” he added.
Many Americans are still priced out of the housing market by high home prices and mortgage rates that are still hovering well above 7%.
But if you’re keen to invest in a rental property, but like Joe, you’re not sure if you’re cut out for the landlord life, here are three other ways you can invest in the real estate market.
Real estate investment trusts
Investing in a real estate investment trust (REIT) is a way to profit from the real estate market without having to buy a physical property or deal with any landlord duties.
Like giant landlords, REITs are publicly traded companies that own income-producing real estate like apartment buildings, shopping centers and office towers. They collect rent from tenants and pass that rent to shareholders in the form of regular dividend payments.
Generally, they’re described as high-return investments that provide solid dividends and the potential for moderate, long-term capital appreciation.
Also, as REITs are publicly traded, you can buy or sell shares any time and your investment can be as little or as large as you want — unlike buying a house, which usually requires a hefty down payment followed by a mortgage.
Real estate ETFs
Another easy way to invest in real estate without having to pick and choose which stocks to buy and sell, is through exchange-traded funds (ETFs). You can think of an ETF as a diversified portfolio of stocks.