You could call it a happy accident: At just 23 years old, Dana Bull and her now-husband became landlords when they rented out their newly purchased condo in Salem, Massachusetts. They had relocated to Boston and needed extra cash to cover their living expenses.
Despite experiencing some early mishaps as landlords, including a mouse problem, Bull, now 27 and a realtor with Sotheby’s International, says they quickly uncovered a passion for real estate investing.
“[U]ltimately, we were like ‘You know, it’s frustrating to have to deal with the maintenance and have this whole other thing that we have to worry about … but it’s a lot easier than our full-time jobs, which are extremely time-consuming and stressful,” she told Business Insider.
Today, the couple earns passive income from six homes and 18 apartments they own in Boston and the North Shore. Bull says they have never had a vacancy in five years.
Her favourite strategy for maximizing return on investment in real estate, she says, is buying a “multifamily,” like a duplex or apartment building with several rental units.
“I call it the triple-headed monster,” she said. “You have cash flow in the short-term, appreciation in the long-term for building wealth over 15 or 20 years, and then … ways to force appreciation if you need to get out.”
To maximise long-term appreciation, Bull suggests the “condo conversion story,” a strategy that involves buying a multifamily apartment building and then down the road turning the units into condos and selling them off individually.
“So the idea is, you buy the building for a little bit of a discount, and then eventually you’re able to sell for top dollar,” Bull said.
And if you get into a bind and can’t afford to stick around, Bull suggests making “affordable but thoughtful upgrades to the property to unlock value” before you sell — think fresh paint, new countertops, and refacing cabinets.
“I think it’s really important at any age, but especially when you’re young, to keep your options open [for earning money] — and have different escape routes if need be,” she said.