Megan McArdle talks real estate............

A day after admonishing us folks to save more, she offers up
some suggestions on where to invest those saved dollars.  One of
her suggestions is rental residential real estate.  Full essay is here.
Given her advice about real estate, one would think she has had
some experience.  It is advice worth pondering.  A few samples:

However, real estate can be a great way to diversify your
portfolio if you are careful about it. The stock market may
be down, but your tenants will still be paying you some
rent every month.

a. Don't flip. I shouldn't really need to explain this now,
should I? Buy for rental income, not capital gains.

d. Budget for repairs.

e. Budget for empty months.

f. Do regular inspections No matter how lovely your tenant is,
they may be destroying your house without even knowing it--
not changing air filters, attracting pests, letting leaks grow.

h. Expect to manage it. A solid real estate investment can
earn you ten percent a year--but you have to work harder
at it than you do leaving the money in the market.

j. Check potential tenants thoroughly.........Lazy landlords
get hurt.

m. Know how many properties you can manage. First of all,
know your limits. There are benefits to scale (you can have
a handyman on retainer if you have enough apartments, and
he'll probably give you a discount). But there are also
drawbacks--each apartment takes time.

o. Landlording is a business............ Do not buy because you
like a property; buy because it will offer you a reasonable
return after expenses.

It's a simple portfolio, and it won't make you rich without
working. On the other hand, we should all be pretty sick
of get-rich-quick schemes by now.