NEW YORK (CNN/Money) -
Ann-Marie Williamson is the kind of person who actually enjoys managing her finances.
The Neptune Beach, Fla., resident reads financial tomes while on vacation and even "hobbied" in taxes before going to work for the IRS as a customer service representative answering tax questions.
"To me taxes are like a real-life Monopoly game, and that's how I view the rest of my finances," said Ann-Marie, who is divorced and the mother of two grown children and a 13-year-old son, Kyle.
Although she's never had a job that paid more than $45,000 a year, Ann-Marie has acquired a nest egg worth about $480,000. Perhaps befitting a Monopoly player, real estate has been her primary investment vehicle over the years. She now owns 11 rental units, which more than pay for themselves.
"I just fell into it," said Ann-Marie, 43, describing her debut in real estate a decade ago after learning about the advantages of rental property. She used $6,000 of her savings to put down money on a single-family home and a townhouse, both of which were in foreclosure. "I paid $22,000 for a property I could have turned around and sold for $45,000 the next day," she recalled.
Early on, Ann-Marie learned a couple lessons. For example, she'll never again take a 15-year mortgage on a rental property because mortgage payments eat up too much of the rental income. "Extra expenses with those properties were coming out of my pocket," she said.
Ann-Marie also learned how important it is to research the local rental market before buying. "Know the areas you're in. I specialize in renting to people who need a place to live but probably could never afford to buy on their own," she added.
Although she takes a hands-on approach to managing finances, she does not spend a great deal of time on the day-to-day maintenance of her rentals. Her tenants are responsible for their own lawns, and if there's a leaky faucet or other problem she calls a contractor to take care of it.
Expanding her real estate empire
After taking about five years to ease into her role as landlord, Ann-Marie started adding to her small empire with more rental properties. In many cases she came up with the down payments for new rentals by tapping into the equity in her existing properties.
She also became an expert in nontraditional financing methods, such as 1031 exchanges, which she used to swap one of her original rentals for two other properties. (A 1031 tax-deferred exchange allows owners of investment properties to avoid paying capital gains taxes by buying new property within a certain period of time.)
Today, Ann-Marie's real estate investments, including her primary residence, are valued at $838,000, of which she has about $438,000 in equity. The annual income on her rentals -- $73,000 -- is more than enough to pay her loans, which total $2,300 a month, set aside money each month for taxes and insurance, and have a little left for savings.
Her money savvy isn't just in real estate
Outside of her real estate costs, Ann-Marie's monthly expenses rarely go over $1,800. "I have very little credit card debt and if I do ever carry a balance it's associated with one of the rental properties," she said, adding that her primary residence will be paid off in three years.
Tax hobbyist that she is, Ann-Marie also takes advantage of tax-sheltered investments by contributing the maximum amount to her employer's tax-deferred thrift savings plan and as well as a traditional IRA.
She also has thought through estate planning issues. For example, in order to avoid probate and pass her estate directly onto her children, Williamson has titled her properties and her taxable investments in a grantor trust.
While Ann-Marie likes the challenge of investing, she's also looking forward to a day when she can kick back and enjoy the fruits of a lifetime of hard work. With a retirement funded by her rental properties, her investments and a nice pension from the government, Ann-Marie hopes to trade in some of her financial reading for travel guides.
"Other than Canada and Jamaica, I've never been out of the country," said Ann-Marie, who also likes learning foreign languages. That is, when she's not looking into new real estate opportunities or studying changes to the tax law.