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follow Patrick 2018 May 20, 5:12pm
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Single-family homes in large U.S. cities have generated returns of about 9 percent annually on average, according to the study, which examined results from 1986 to 2014.That would make rental homes almost as potentially lucrative as stocks and considerably more so than bonds, deposit accounts and other conservative instruments.
in large U.S. cities
you have to suffer dealing with tenants.Stocks never call you because the toilet is not working.
Her home is worth $350k and she pays $10k in property taxes each year (there is no golf course). I'm suprised no one talks about Texas's property taxes??
so, my best friend who lives in Dallas, Texas where the hype of buying a home is cheaper, she said they get you on property taxes in Texas. Her home is worth $350k and she pays $10k in property taxes each year (there is no golf course). I'm suprised no one talks about Texas's property taxes??
That's why I left the tx market. Property taxes doubled 2001-2009. Insurance tripled after a couple hurricanes even with being 300 miles south of the storm damage, in an area with very low probability of hurricanes,
ow come no one talks about the fees on stocks, which comes right off of the return.
Owning a rental house is not as lucrative as buying stock
Patrick saysOwning a rental house is not as lucrative as buying stockEvery time I get an itch to buy a rental property and think about becoming a slumlord, I look at my brokerage statement, and it snaps me back to reality!
I also think it's nuts to be an absentee landlord. If you are going to be a landlord, make it something super convenient.
Stocks are better to own but those who like being landlords will not be convinced. Some like the feeling of being owners. I know a man who just loves it and he spends his time running around dealing with his various rentals, it's fun for him. I prefer other hobbies.
The capital appreciation in my Roth IRA has been great and when I convert it someday to a fixed annuity I will be paid a steady tax-free automatic never-ending 6.5%-7% (depending on the age I start payments).
I always love hearing from stock bulls at the end of a long run up how great they did. No one was posting how great they did in 2009
How is this any different from finding oneself sitting on a bunch of underwater rentals in 2009? At least with stocks you're not paying for the "privilege" in taxes,interest, insurance and maintenance. So I guess it is different after all.
How is this any different from finding oneself sitting on a bunch of underwater rentals in 2009? At least with stocks you're not paying for the "privilege" in taxes,interest, insurance and maintenance. So I guess it is different after all. As in "rentals are still worse".
But if I did carry paper how can a rental be underwater matter if I'm not selling it? Assuming staying with fundamentals and no creative financing what the shit does it matter what the house is "worth". The rent still comes in the same as before. The ROI is exactly the same. The value makes zero difference until sale, which could be forever.
Same can be said about stocks. Solid ones kept on chugging along paying out the same dividends. And still not requiring taxes, maintenance and such. And, unlike rentals, you can totally forget you even own one. So are we comparing stocks and rentals in general, good stock vs shitty rentals or shitty stocks vs good rentals?
PS. I know for a fact that my last landlord was losing money every month on the semi-attached house I rented from him. And then HOA fee jumped from $350 to $700 ....What would be the equivalent of this kind of shit with stocks? Can't think of any.
and you'll own a "free" house after 30 years, too.
What the real estate people don't want to admit is that in 60 years their property may have cost a fortune in upkeep. I have seen houses in New England that were very old but they were built at the same level of strength as a wooden ship (by the same people who built ships). Modern claptrap houses will require constant upkeep.
I'm a "stock bull" who has been an investor in mutual funds since 1983.
Hassan_Rouhani saysPS. I know for a fact that my last landlord was losing money every month on the semi-attached house I rented from him. And then HOA fee jumped from $350 to $700 ....What would be the equivalent of this kind of shit with stocks? Can't think of any. Anyone losing money every month isn't an investor. How would that happen if you did your homework and made an investment instead of a gamble? Did rents go into the toilet some how? OMG no one has ever lost money in stocks Certainly no one had any highly recommended worldcom of enron stocks in their portfolio in 2000. or blue chip lehman bros stock in 2008. Not a soul. Then there is just plain old shitty management that runs the company into the ground sinking the share prices. Nah, that never happened.
You'll own a "free" house in 15 years if you use a 15 year mortgage and as a bonus you pay 1/3 the interest. Cuts profits but builds equity fast.
t's best to hold both stocks and real estate. Stocks: Diversified portfolio 80% in ETF.Real Estate: Diversified portfolio of Real Estate, rentals and vacant lots.Small family businesses. My returns in a small business run by a family has been 80% since the last few years.
Whatever dude. Dividend yields are average 3% historically. I'm netting 11-13% on rents without any appreciation.
So you're super gung-ho on inflation remaining ultra low for the next 30 years?
See: you compare "average" something with particular something else. Apples and oranges. Fallacy.
I'm past having to get money from the bank to invest with so it doesn't matter to me.
It sounds like you outright buy rental units instead of using mortgages. Why? Is it the increased risk of leverage that you wish to avoid? I'm not criticizing, but genuinely curious to hear from someone with so much experience.
One of the common themes I read though was the emphasis on the unique ability in RE investing to take advantage of inexpensive leverage via mortgages.
The best route to go, when starting out is to buy properties you can live in for a year, getting the better rates. Not only this, you learn about the house or apartment. You can also fix up any issues before they become sunday night calls for a plumber. Then top it off with your renters are likely to be like minded. It just makes things easier when your ideas of what is expensive match theirs, and what's acceptable for a time line matches their expectations. Your expectations will likely match much more closely with theirs and that just makes communication easier. Since this is your first rental, it's just nice to have these extras built in. 1% lower mortage, most problems fixed and tenants you can "better" understand.