The Sarcasm Report v.235

August 16, 2015
Dave says: Live simple and keep nightmarish debt away

My wife and I are recent graduates with advanced degrees. We also have about $300,000 in student loan debt. We’re thinking about buying a rental property, and the plan is to get a mortgage with monthly payments of $400 and charge $800 in rent. We could use the extra money to help pay off our debt. Do you think this is a good idea?

It's a good start but you are not tapping debt's full potential.

1. Buy a rental property with a $400 mortgage.
2. Charge $800 to renters.
3. That nets you $400.
4. If tenants complain of leaky roof or broken appliances, pay someone to fix it.
5. If you still have $400, go to step 1 and repeat.
6. Attempt to take a cash advance on your credit card to get you to $400.
7. If successful, go to step 1 and repeat.
8. Attempt to borrow money from relatives to get you to $400.
9. If successful, go to step 1 and repeat.
10. Attempt to gamble what you do have to win $400 in Vegas.
11. If successful, go to step 1 and repeat.
12. Things are dicey, since you are running out of ways to raise $400, but you should have at least 20 rental properties now.
13. Raise rent by $20 on each of them and hope nobody moves out.
14. If successful, go to step 1 and repeat.
15. From here on out, you should be turning cash flow positive.
16. Enjoy using your advanced college degrees to become slumlord real estate moguls!

I should warn you that there is a risk with this plan. You must never let one of your rental units sit empty. Therefore, be extra nice to tenants calling at 3am complaining of rats, noisy neighbors, and/or overheard gunshots.