Finding Upside in Real Estate’s Downturn

By Ben Steverman - 2011-09-27T18:19:45Z

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Learning To Be a Landlord

Driving around the Orlando, Fla., area, Larry Hobbs saw houses in "solid working-class neighborhoods" that once sold for more than $170,000 now available for $50,000. In 2010, Hobbs, 61, sold stock in his retirement account to buy one such house through a "short sale"--when a lender agrees to accept less than a mortgage's outstanding balance. "There's a lot of work" to being a landlord, he says. "There's a hassle factor." Though he works full time, he renovated the house on nights and weekends, and found tenants he trusts. "If you present a good product at a good cost, they snap it up," he says. He expects an 8.5 percent annual return on his investment.

Photograph by Getty Images
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