Posted on 10/28/2007 4:14:43 AM PDT by Jacquerie
Rental property is another animal. It is an investment assuming you can rent it for more than the annual expenses.
Have you never heard the old saying "don't put all your eggs in one basket". That means diversify. People loosing their homes didn't understand that SIMPLE principle.
round here they expect lower and median priced homes to fall to 2000 levels
(nashville metro)
it just started here...the slowdown
“Can’t tell that here. More housing developments going up every day.”
Here too. But the houses that are still going up are glorified trailers on lots so small you can hear your neighbors televisions. And the labor used to build them? I think you can guess.
If you can double or triple your retirement in the process then do it.
I don't understand why you'd be selling something at the drop of a hat. We have four homes. If the price is down or the interest is up and we want to do something, we just wait for the cycle to change. We decide when and what to do.
You keep saying put all you eggs in one basket and you don't know what you're talking about. You made that up. I never said we do that, nor do I advise others to do it.
Your view of rental property is limited. You don't always assume that your expenses will be exceeded by the rent. Sometimes you do something for long term gain and tax break, not for immediate cash flow.
It is clear to me that you are operating with less than sufficient information and are inexperienced.
I really don't have time to give you a full primer.
There are many personal finance books out, I suggest you check some them and expand your knowledge, before your 85 and out of money.
While I certainly share some of the unease that many Americans have about the current situation, panic is not in my dictionary. I've been in some very dire situations in my past concerning housing and money, and I survived them. We'll all survive the current mess too. What I object to is the habit of Big Media to predict disaster and catastrophe every time there is some sort of predictable downturn in the economy or sector of the market.
Millions of home owners are not in a panic. They don’t HAVE to sell or refinance a 100% loan. So they just sit and wait it out and watch the show.
IMO, we’ve seen nothing yet and this will become a global issue.
And it you're buying rental property for a tax break... that's not an investment either. It's called a tax deduction.
I know you don't believe me. You should spend some time listening to someone like Dave Ramsey or something.
I manage my mother’s accounts, and my mother-in-law’s accounts. They live very comfortably off the income it generates, and the various accounts grow at a rate of return that exceeds inflation. They’ll never have to work. And they’ll leave solid estates to their children. And it isn’t based on an upturn in the housing market.
My guess is in about 3 years.
You don't think real estate is an investment, it's speculating. Since when do all investments have "no" speculation. And lay out the risk factor of buying long-term real estate.
I guess you have an investment with more leverage and less risk. You are so many standard deviations off center, I can no loner offer you anything. I'm gone. Best wishes to you in your paid off modest home. I hope your money will sustain a long life.
I guess, based upon your approach, the value of the homes is not included as an investment, it's a widget or whatchamacallit, and therefore the equity will not be passed along to the heirs.
Good luck to your family.
Leverege is a code word for "risk". High risk does not always mean high return.
Your goals determine your investmnents. So if cash flow is your concern you can do one thing and long-term gain another. But they can both be done in real estate.
I think you misunderstand leverage.
If I put 50,000 in the stock market and it goes up 10%, I make $5,000. If I put 50,000 down on a 500,000 property and the renters make the payment and it goes up 10%, it makes $50,000, because I can leverage the 450,000 the bank loaned to make 50,000. The bank doesn't make me pay the appreciation to them. It's mine to keep.
Having the right investment can increase your retirment by 2-3 times a 401 k or IRA. Many people will outlive their payouts.
In the urban river cities of Northern Ky, Population less than 100,000 there are at minimum 5,000 new condo units already on line which need to be sold for betwen $200,000 and $2,000,000. The math just does not work. The real estate grifters just don’t understand that it is way already over, It is F**kin over. Get another job for ten years , and then come back.
But beyond that..... if you're buying a piece of property for 500k to use as rental property... then you've got a screw loose. So you buy 4 or 5 pieces of property that equate to that dollar value. That means you've got to keep 4 or 5 renters that all pay on time, and don't tear the house up etc. You can make money doing it... but it's not investing. It's called running a business.
“More people on the planet and no new land being created means it never will hit bottom.”
Unless you live in Detroit.
You have to see what they are doing in Denver. Denver has two large areas close to downtown, 10-15 minutes where tons of new homes are being built.
The smaller area is Lowry, an old air force base. The second is Stapleton, which was the old airport. The yards are small but it is an easy commute downtown.
Heres the web site for the development. It is interesting.
http://www.stapletondenver.com/
The trick is to catch it on the bounce....or make that the double bounce.....
If you're in a state where you don't make any money on RE, then you're right, you don't have an investment, you have a house. BTW the law in the US allows citizens of one state to invest in other states. That's how you make money.
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