Current Events > Why aren't you guys investing into real estate?

(+) Yeah! (+)

Like buying a home while still renting or living with your folks to rent out the home or do strictly AirBnB?

Then after 5 years use the home equity to get a 2nd house to do the same thing or use the money from the first home's rent or income to get a 2nd house?

Use debt to buy assets.

Nobody keeps $1million in their bank account. They spread it into different assets just like not keeping all your eggs in one basket.

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How many do you have?

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You don't have a farm you're going to inherit from your poor working class family? Sucks to suck

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Haven't found any good deals. Finding something cheap takes work that I just haven't set myself up for. Wholesaling, cold calls, and stuff.

Regular houses of the market don't really seem like a good enough deal to me. Purchase price is too high and after accounting for vacancy, repairs, etc. The rent just doesn't bring enough monthly cash flow. You'd have to just hope to break even every month and it then just becomes a long term goal of just paying off the mortgage, which is actually fine... But at that point I'm just hoping for appreciation it seems. I'm just very risk averse to real estate for some reason.

One of these days though
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One house I'm making plans to buy a 2nd house next year. Eventually I will give up my first house also as a rental or strictly AirBnB since I'm near the downtown core of cottage country and things are nearby like restaurants and beaches. Literally like a 2-4 min drive away. People wanting to get away from the city love that. Eventually I might one day get a waterfront property also. Don't have that kinda money yet.

You make more money while working a 9-5 job and maybe down the road quit the job if this is the type of business you wanna handle and as you gain more money you don't blow it on liabilities constantly.

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emblem boy posted...

Haven't found any good deals. Finding something cheap takes work that I just haven't set myself up for. Wholesaling, cold calls, and stuff.

Regular houses of the market don't really seem like a good enough deal to me. Purchase price is too high and after accounting for vacancy, repairs, etc. The rent just doesn't bring enough monthly cash flow. You'd have to just hope to break even every month and it then just becomes a long term goal of just paying off the mortgage, which is actually fine... But at that point I'm just hoping for appreciation it seems. I'm just very risk averse to real estate for some reason.

One of these days though

Look into other areas where housing hasn't skyrocketed then. I grew up in Toronto. Am I looking to buy in Toronto when the average house is close to $1 million? No. Look into other states/provinces where things are cheaper. Research into the jobs in that area and if people are looking to rent. You don't need the house to be luxurious as long as it's not run down and maybe only needs minor things done to attract people. And at times those things you can do yourself. Changing the faucet for example to a better looking one is very easy to do. Buy used stainless steel appliances if you wanna and install those. People like that. Buy fake marble looking stuff.

Many people are living the city. As the tenant or AirBnB clients slowly pay off the mortgage you may see gains based on what you're charging and how long you have the mortgage for. 25 years? 30 years? Let it slowly go down. In 4-6 years depending on the area the house should appreciate. Go back to the bank and see if a remortgage or home equity loan based on interest is worthwhile for you to reinvest that money into another property.

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OP thinks he will be in this realm forever

you ain't even guaranteed a week

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Austin_Era_II posted...

emblem boy posted...

Haven't found any good deals. Finding something cheap takes work that I just haven't set myself up for. Wholesaling, cold calls, and stuff.

Regular houses of the market don't really seem like a good enough deal to me. Purchase price is too high and after accounting for vacancy, repairs, etc. The rent just doesn't bring enough monthly cash flow. You'd have to just hope to break even every month and it then just becomes a long term goal of just paying off the mortgage, which is actually fine... But at that point I'm just hoping for appreciation it seems. I'm just very risk averse to real estate for some reason.

One of these days though

Look into other areas where housing hasn't skyrocketed then. I grew up in Toronto. Am I looking to buy in Toronto when the average house is close to $1 million? No. Look into other states/provinces where things are cheaper. Research into the jobs in that area and if people are looking to rent. You don't need the house to be luxurious as long as it's not run down and maybe only needs minor things done to attract people. And at times those things you can do yourself. Changing the faucet for example to a better looking one is very easy to do. Buy used stainless steel appliances if you wanna and install those. People like that. Buy fake marble looking stuff.

Ya, it's definitely location dependent.
My ideal situation would be to find a duplex or something and live in one side, rent the other side
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Houses in my area go for $700k to well over a million. Need at least 50k to 200k for a down payment.

Unless you have a wealthy family or do something shady good luck buying.

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Joeydollaz posted...

OP thinks he will be in this realm forever

you ain't even guaranteed a week

No, but you build a portfolio. If people had this mindset in the 80s or 90s some wouldn't be where they are today cause they took a chance. A house up here where I live about 25 years ago was under $100K by the water. Now many waterfronts are like $1million. What will happen to those houses in another 25 years? Exactly.

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Aside from not really having the funds available to realistically do that, I would honestly feel like a fucking idiot living with my mom or paying rent when I literally own a house

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apocalyptic_4 posted...

Houses in my area go for $700k to well over a million. Need at least 50k to 200k for a down payment.

Unless you have a wealthy family or do something shady good luck buying.

Once again look outside cities...small areas have a demand also. Don't keep buying houses in the same small area. By east coast or west coast. Spread some money into perhaps private companies buying shares in them if they are growing. You collect extra passive income each month. Then reinvest it.

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Because it requires money and good credit. I've got about 15k, most of which comes from the unemployment boost in the past few months, and thats over, so I currently am making about 550 a month off of unemployment.

My credit score got fucked over early on by medical debt, then student debt later on. It only recently got to good numbers (670 atm).

And right now seems like a bad time to be a landlord anyway with 40% of renters facing eviction...

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eston posted...

Aside from not really having the funds available to realistically do that, I would honestly feel like a fucking idiot living with my mom or paying rent when I literally own a house

Didn't Kobe Bryant live with his parents when he was in the NBA before eventually buying his own place?

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Looking into buying house #4 this weekend, perhaps.

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PMarth2002 posted...

Because it requires money and good credit. I've got about 15k, most of which comes from the unemployment boost in the past few months, and thats over, so I currently am making about 550 a month off of unemployment.

My credit score got fucked over early on by medical debt, then student debt later on. It only recently got to good numbers (670 atm).

And right now seems like a bad time to be a landlord anyway with 40% of renters facing eviction...

It takes small steps. Work on your credit score then slowly save up money.

I was going to look into seeing what I'd qualify for this summer, but due to the pandemic I didn't even bother wasting the banks time. I'll see where things are in 2021. Low interest rates are nice, but I'd need renters to make up for the mortgage especially ones who have a decent full time job. With more places reopening I'll see how it goes before even talking with the bank. I might buy local for my 2nd house then maybe start looking a bit further away.

Challenge with AirBnB is cleaning up after clients leave. Hiring a cleaning service to go in constantly might not be beneficial. I haven't gotten to that point yet, but I'd have to work out the math in regards to long distance AirBnB. For now I'm staying within Ontario and you can find decent home prices in the area. I know homes in like the East Coast in Canada are decent in price. I'd have to look into that and the whole maintaining the property also.

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https://www.realtor.ca/real-estate/22257049/232-wellington-street-miramichi

That's in my price range...very beautiful too. East Coast Canada.

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Lack of liquidity
High initial investment
Low rate of growth
taxes

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ahh one of the people causing the housing supply issues

If you put 10% down on $250K or more at 30 years you should make a gain based on rent coming in which offsets the mortgage and property tax along with home insurance (I'd assume that house home insurance is like $80-90 a month similar to what I pay at my house). Renters pay for utilities or if AirBnB has a better demand in that area that might be better.

My current home is a bungalow where I rent the basement. So I'd prefer a bungalow type if I can get 2 different tenants in.

I haven't sat down with an accountant yet in regards to taxes.

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Oh right I almost forgot Im just made out of money. All this money wohoho.

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The world runs on money either try to get more or just stay where you are.

*shrugs*

I cannot nor have any plans ever to live in a city again. Hence why I may not invest in property there. Too expense. Car insurance is crazy high and too many traffic lights and people raging and honking cutting others just to not get ahead. They get stuck at the next traffic light. What a joke.

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I've thought about it but houses aren't something I'm very passionate about so it would be more work for me, and I'm trying to work less. I'd rather be lazy and put my money in crypto and mutual funds.

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Austin_Era_II posted...

If you put 10% down on $250K or more at 30 years you should make a gain based on rent coming in which offsets the mortgage and property tax along with home insurance (I'd assume that house home insurance is like $80-90 a month similar to what I pay at my house). Renters pay for utilities or if AirBnB has a better demand in that area that might be better.

My current home is a bungalow where I rent the basement. So I'd prefer a bungalow type if I can get 2 different tenants in.

I haven't sat down with an accountant yet in regards to taxes.

I'm not committing to $250k over 30 years lol. I'd make much more money with stocks with none of the headaches of home ownership.

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Im only into free real estate.

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oh yeah, airbnb definitely seems like a good idea right now

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Sackgurl posted...

oh yeah, airbnb definitely seems like a good idea right now

*shrugs*

I'm talking about 2021.

And homeownership headaches aren't that bad especially if you have a good tenant.

Life has challenges just like building a business. I guess some can't deal with stress.

And $250K for 30 years you're only putting $25K down of your own money.

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so your investment idea is buy a house and not rent it for another six months to a year while paying a mortgage and upkeep

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Buy in 2021 then. That's what I'm doing.

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o k i will li sten to you

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Not sold on the long term sustainability of the reasons one would invest in housing. Not even sold on the medium term of this investment model. Which is especially important considering the time it takes and the upfront headache.

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I wasn't one of those fortunate people to luck into money or property, so I'll probably never be able to

I bought the apartment I live in for 890k in 2017. Paid 270k and pay utilities and mortgage, which amounts to about $1200 a month. The rent for this apartment would go for about $3500 on the market, so yeah, pretty happy about that.

I've been saving money since I purchased this apartment, but I'm torn between buying a new apartment or just putting the money into the one I already live in.

I'd have to shell out about 150k for an apartment worth 500k-ish, which I'd need another couple of years till I have. I'm leaning towards the simpler option of just putting the money in the current apartment...

That's the plan amigo, cheers

Krojen posted...

Not sold on the long term sustainability of the reasons one would invest in housing. Not even sold on the medium term of this investment model. Which is especially important considering the time it takes and the upfront headache.

seems to me that real estate exists mainly as an inflation hedge

equities are also inflation hedges, but their real value grows with time and you don't have to do any stupid bullshit

and their returns are taxed quite a bit less

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To me, it seems like real estate just essentially gives you a safer(can't be margin called (evicted) as easily as in stocks) form of leverage, so potential gains seem high.
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I mean there's also the fact you're buying up homes you don't need

Landlords are actually held responsible here. One of my dad's friends owns a lot of property
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emblem boy posted...

To me, it seems like real estate just essentially gives you a safer(can't be margin called (evicted) as easily as in stocks) form of leverage, so potential gains seem high.

the term for this with real estate is "foreclosure"

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Sackgurl posted...

seems to me that real estate exists mainly as an inflation hedge

equities are also inflation hedges, but their real value grows with time and you don't have to do any stupid bullshit

and their returns are taxed quite a bit less

This. And you can after 4-5 years use like $100K from the home based on interest and reinvest that loan's money into stocks. It gives you leverage. It's a long term gain. You're not looking to be mortgage or loan free by 65 on all your properties...that's not how you gain. If your home is mortgage free would you just sit there without loans? Sure if you like that, but if you wanna gain wealth you gotta get loans.

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Sackgurl posted...

emblem boy posted...

To me, it seems like real estate just essentially gives you a safer(can't be margin called (evicted) as easily as in stocks) form of leverage, so potential gains seem high.

the term for this with real estate is "foreclosure"

Ya, but as far as I know, that whole process is length and difficult
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I literally run operations for an analytics company specializing in residential real estate. Would recommend most people stay away from investing in real estate at the moment. If you know what you're doing you'll be okay, but that's always the case.

Ofc a lot of it is area dependent. The situation you don't want is juggling 3 or 4 hot potatoes right as the market falls out and you end up in terrible shape (sometimes).

Good buddy of mine retired a few years back and all his friends were telling him to upgrade from his modest home to a huge house, rent the other one, etc.

After 08, his friends all went under, he remains. He does have a commercial property which might be iffy at this juncture, but I believe his lease is filled and the company is doing okay.

All this to say - don't get into RE investing like you'd get into learning how to golf. Go study and be prepared to put in some work if you want to actually invest. If you're looking to gamble, that's a different story.

I will do it when I move out of my current place. I would also rather be dirt poor than move back in with my parents after over a decade of being independent

But otherwise I don't have investing money and I've only been living here for a year

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https://youtu.be/cd4-UnU8lWY

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Austin_Era_II posted...

If you put 10% down on $250K or more at 30 years you should make a gain based on rent coming in which offsets the mortgage and property tax along with home insurance (I'd assume that house home insurance is like $80-90 a month similar to what I pay at my house). Renters pay for utilities or if AirBnB has a better demand in that area that might be better.

My current home is a bungalow where I rent the basement. So I'd prefer a bungalow type if I can get 2 different tenants in.

I haven't sat down with an accountant yet in regards to taxes.

Yooo! Are you in USA? I could help you with taxes; I am a CPA.

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Sackgurl posted...

seems to me that real estate exists mainly as an inflation hedge

equities are also inflation hedges, but their real value grows with time and you don't have to do any stupid bullshit

and their returns are taxed quite a bit less

You're forced to make investments based on that alone and agreed on the 2nd point.

But I can't see the inefficiency of rich people forever owning a ton of empty homes for the inane sake of diversification in their portfolio. Nor that we'll forever refuse to invest in a ton of cheap housing just so boomers can keep their inflated values. People can't continue spending almost all of their check on a roof over their head. Feels like another collapse is always imminent.

But I'm just a weirdo socialist billionaire thanks to Tesla stock.

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As I said don't keep all your eggs in one basket. Buy 2 or 3 homes. And don't just buy in one specific area especially due to natural disasters.

USD typically is stronger than other countries. Look into decent first world nations and buy a house there. Like I said East Coast here in Canada is pretty cheap. So are some other places in Ontario. I won't buy in Cali.

I know a guy here in cottage country who I worked with he has 6 or 7 places which he rents out.

If you buy a house in decent shape landlord issues are rare. You may get minor things and you can call a local handyman to check it out to fix or replace an appliance. Replace the appliance with a used one. Tenants can cut the grass and shovel snow.

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because I'm not wealthy

also I don't want to make money by exploiting people

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Austin_Era_II posted...

As I said don't keep all your eggs in one basket. Buy 2 or 3 homes. And don't just buy in one specific area especially due to natural disasters.

USD typically is stronger than other countries. Look into decent first world nations and buy a house there. Like I said East Coast here in Canada is pretty cheap. So are some other places in Ontario. I won't buy in Cali.

I know a guy here in cottage country who I worked with he has 6 or 7 places which he rents out.

If you buy a house in decent shape landlord issues are rare. You may get minor things and you can call a local handyman to check it out to fix or replace an appliance. Replace the appliance with a used one. Tenants can cut the grass and shovel snow.

Buying property is literally putting too much in one basket. You can buy so many different companies with the cost of one house

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Squall28 posted...

Buying property is literally putting too much in one basket. You can buy so many different companies with the cost of one house

You mean shares. Cause if you wanna buy a company you need the entire funds upfront compared to a house cause you get a mortgage.

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