don't attack him because he has a cleaning business.
Oh man, I have heard the same thing a hundred times over from my buddies in the Real Estate business.
I sold some properties before the crash when they were stilling pumping the market place. They told me I was nuts.
Then when I didn't jump back in and concentrated on our side business a lot of people called me stupid.
Come on, they still do, because today they are catching up from losses that they had.
My income has steadily risen.
As an example: we net $1300 per month per employee. We can add as many employees as we want, without a huge cash investment.
We don't advertise, I simply blog for business the way I do here.
Patrick.net is a great Real Estate site, and some of his ideas are very much on target. We service more individual home owners than Real Estate agents.
I think there is a shift away from Real Estate commissions, and more one on one Real Estate transactions. It was that way in the 1970s, and 1980s, more people did business direct as Principles Only, but we lost that in the rapid appreciation of the price of housing.
We'll see what happens, but there's no rush, Real Estate isn't going anywhere.
Though, in actual point of fact, this may be the only intelligent thing he has ever said: that I should sell my real estate investing techniques, rather than writing about them for free, only to suffer insults from him, callmecrazy, etc on here, who are too stupid or jealous to actually think.
We are not jealous, but we are amused. Nobody is buying your real estate advice, there is too much free advice on the Internet and it seems to me that most people selling "real estate investment techniques" are scambodians.
Having said that, you do seem to be doing OK with your purchases. What worked for YOU in phoenix may not be applicable elsewhere.
I know you have an exit plan if things go south, but what would you do if the market crashed so hard that you did not have a chance to sell before the market is flooded with cheap houses and rentals?
People say it's more like 1991 (A False Glimmer Of Hope). But that's just good news for you, right? Less competitors to buy up all these cheap houses. If people would rather invest their money somewhere else, like the DOW which is at an all-time high, why try to sell so persistently these houses with prices that are about to skyrocket?
My point with this article is that housing prices go up and down (but mostly up). It's not like we haven't been through this before. So it's a bit naive to think oh, this time it's different and housing prices only go down.
Just like 1981. Except we don't have Reaganomics spurring economic growth but instead have Obamacare showing the downside of the Laffer Curve. And the personal savings rate is currently around 2% rather than 10%. Oh, and mortgage rates are at an all-time low, not high. Wait, how is this anything like 1981?
This is very simple. I don't see an upside to Atlanta Georgia, any more than I see an upside in owning property in Phoenix Arizona.
You followed the exact market timing plan that I had recommended since 2006, sell before the crash, and buy after the crash.
The problem is that the Real Estate market was never allowed to crash.
We got the tax credit, QE 1,2,3, and ended up with historically low interest rates. The banks got bailed out and are allowed to pursue more profits, cash reserves, all with very little risk. The Fed, and government seem very pleased with the housing recovery, but I don't see it as sustainable.
Now Atlanta Georgia in the 1980s was the home of Peach Tree Accounting. Back in the day that was a big deal. Today I don't see any economic viability to Atlanta so why hold on?
In the mean time, say in the past ten years, thousands of housing units were added to Atlanta, many have ended up in the hands of the bank. So I don't see prices rising there. I don't see rental potential there in Atlanta.
You're going to find many more people with the same idea. There are much easier ways to make a buck than being a land lord. I talk with Real Estate investors, who are older, who are looking to sell the properties, and put the money into something that will give greater returns, or safer returns.
Which reminds me, Real Estate is a 24/7 business. My side business was directly related to my Real Estate business, school teaching doesn't match that.
So you are either a full time Real Estate agent of not an agent at all.
You are one of thousands of people who are puffing the brilliance they had in the past seven years, but we are just getting started on this cycle.
So when people say they bought in the 1980s and they have an equity, that depends on if the property gets sold. I don't see Atlanta coming back, do you?
I have no knowledge of Atlanta, but if I'd bought a property back in '84 pretty much anywhere in the world, I'd be more than a bit surprised that its value had halved 25 years later. Atlanta doesn't create the images of Detroit, for example.
In 1986 I had a restaurant listed for sale no one wanted, so I bought it. For three years I lived that place, it bacame one of the top ten places to be in Seattle. I sold it for many, many times more than I paid for it, and had good daily income.
People need more income, and less expenses today. I think more people are looking for good paying jobs than a high priced rental.
I see under utilized businesses every day, but that is just me.
As for my investor clients they would sell to go into safer havens, like bonds, or dividend income. I would encourage them to invest in small business, but they just want a simplier life.
No more renters calling, no more repairs, no more evictions from people who lost a job, got divorced, or went crazy.
The concensus is that when rents go down, they will sell.
Yeah... The twit who lost money on 20 years of investing, and cleans toilets and carpets day to day, calls the math professor who made over a million dollars and climbing in real estate simplistic... My investments pull in 6k in net rental income, plus pay off 1k in mortgage debt each month. How many toilets do you scrub, to match that?
that until just recently, it was you, your wife and your kids....
Now you're resorting to lies about me to make yourself feel better.
So you are a college professor, and part time Real Estate Investor.
I take it this is your first cycle so you really only have this experience to share.
Being a college professor with limited Real Estate experience gives you what insight?
You bring your simplistic view of price versus rent like it works for all market places, when I've shown you repeatedly it doesn't.
If you have a million dollars in equity I would cash that out so you can keep it, but where will you put your money next?
I don't get this. One is a landlord from Pheonix and the other is a small cleaning company owner in Seattle and they are arguing who has a better business? It's like comparing apples to oranges. Power of the internet.
It's clear to me Robert could care less about cleaning business since he has a daytime job and David does not want to be a landlord since he does not want to deal with tenants. So, what's the problem here? Robert may generalize it a bit more but a sensible person should understand real estate is highly location dependent. He did not claim his business model is the best among all.
Patrick, would you stop a dog fight like this? We all like to argue on internet but this is a bit over IMO.
Robert Shiller is DEAD WRONG when he quotes his famous "homes aren't a good investment, they only rise with inflation" quote. Really? if my home values and rents all rise with inflation over the next 10 years, I make an utter fortune.
from a classical investment POV .. RS is right since for many if RE is illiquid and extended time to sell. I can buy/sell a stock or bond on a moments notice.
Home as investment is too concentrated within its own economies... stock portfolios can be diversified across industries and locations. Your home is stuck in your location no matter how desirable or not.
Tax benefits favor securities.. can you take a loss provision on sale of residence. No!
God forbid you get a storm or earthquake wipes out your home.