Comments on: Reasons I like Real Estate http://www.fiscalmusings.com/2007/04/reasons-i-like-real-estate.html Sat, 22 Nov 2008 08:36:54 +0000 http://wordpress.org/?v=2.3.1 By: Fiscal Musings » Blog Archive » Why I Like Real Estate, Part I: Control http://www.fiscalmusings.com/2007/04/reasons-i-like-real-estate.html#comment-358 Fiscal Musings » Blog Archive » Why I Like Real Estate, Part I: Control Wed, 30 Jan 2008 13:05:42 +0000 http://www.fiscalmusings.com/2007/04/reasons-i-like-real-estate.html#comment-358 [...] is a bad investment and too risky. I don’t really agree with all of this and still have many reasons to like real estate, which I’ll review here over a series of [...] […] is a bad investment and too risky. I don’t really agree with all of this and still have many reasons to like real estate, which I’ll review here over a series of […]

]]> By: Tiredbuthappy http://www.fiscalmusings.com/2007/04/reasons-i-like-real-estate.html#comment-49 Tiredbuthappy Sun, 08 Apr 2007 00:34:00 +0000 http://www.fiscalmusings.com/2007/04/reasons-i-like-real-estate.html#comment-49 Interesting post and comments. I'd love to get into real estate investing but I'm very aware of how much I don't know, and of how impulsive I can be. Plus I don't have tens of thousands of dollars sitting around gathering dust. What I need is a partner/mentor, but the idea of trusting someone enough to go into business together is a little scary. <br/><br/>Oh well. Maybe some day. Probably I'll get into it by simply not selling my current house when and if we ever relocated. Interesting post and comments. I’d love to get into real estate investing but I’m very aware of how much I don’t know, and of how impulsive I can be. Plus I don’t have tens of thousands of dollars sitting around gathering dust. What I need is a partner/mentor, but the idea of trusting someone enough to go into business together is a little scary.

Oh well. Maybe some day. Probably I’ll get into it by simply not selling my current house when and if we ever relocated.

]]> By: limeade http://www.fiscalmusings.com/2007/04/reasons-i-like-real-estate.html#comment-48 limeade Sat, 07 Apr 2007 23:19:00 +0000 http://www.fiscalmusings.com/2007/04/reasons-i-like-real-estate.html#comment-48 I'm not really talking about flipping houses here. I'm talking about buying, holding, and netting a positive cash flow.<br/><br/>Sure there are a lot of what if's but you can plan for those when you're buying the property. If you think you can rent a place for $1,000 a month that's $12K a year. Now factor in a reasonable vacancy rate of say 2 months. Now, you've got $10K to work with for the year. Factor in short and long term maintenance and average it over a year. Anything else you want to factor in, do it. Now you're down to say $8K per year, that's $666 per month to work with. Find a place where the principle, interest, taxes and insurance payments along with any other expenses like an HOA are less than $666.<br/><br/>The point here is that you have to do your homework, but you can factor in a lot of the "what if's". If the numbers don't work for a particular property, then don't buy it.<br/><br/>Just saying that it's "risky" and what if all the time is another way of saying "I can't". I don't like to say I can't. I prefer asking "How can I?". I’m not really talking about flipping houses here. I’m talking about buying, holding, and netting a positive cash flow.

Sure there are a lot of what if’s but you can plan for those when you’re buying the property. If you think you can rent a place for $1,000 a month that’s $12K a year. Now factor in a reasonable vacancy rate of say 2 months. Now, you’ve got $10K to work with for the year. Factor in short and long term maintenance and average it over a year. Anything else you want to factor in, do it. Now you’re down to say $8K per year, that’s $666 per month to work with. Find a place where the principle, interest, taxes and insurance payments along with any other expenses like an HOA are less than $666.

The point here is that you have to do your homework, but you can factor in a lot of the “what if’s”. If the numbers don’t work for a particular property, then don’t buy it.

Just saying that it’s “risky” and what if all the time is another way of saying “I can’t”. I don’t like to say I can’t. I prefer asking “How can I?”.

]]> By: frugal zeitgeist http://www.fiscalmusings.com/2007/04/reasons-i-like-real-estate.html#comment-47 frugal zeitgeist Sat, 07 Apr 2007 20:42:00 +0000 http://www.fiscalmusings.com/2007/04/reasons-i-like-real-estate.html#comment-47 I think RE has the potential to be hightly rewarding, but especially given the fallout from the RE bubble collapsing, the property has to produce income, and it's a hell of a lot of work to be a landlord. That's the part that many people (I'm not saying you) underestimate. I think RE has the potential to be hightly rewarding, but especially given the fallout from the RE bubble collapsing, the property has to produce income, and it’s a hell of a lot of work to be a landlord. That’s the part that many people (I’m not saying you) underestimate.

]]> By: Living Almost Large http://www.fiscalmusings.com/2007/04/reasons-i-like-real-estate.html#comment-46 Living Almost Large Sat, 07 Apr 2007 19:15:00 +0000 http://www.fiscalmusings.com/2007/04/reasons-i-like-real-estate.html#comment-46 How's this, RE is difficult to get into for $5k but mutual funds are not?<br/><br/>RE is difficult to carry if you are only saving $500/month because often carrying a mortgage, plus paying contractors, etc. <br/><br/>RE doesn't have to go to zero for you to lose your shirt. You could lose your shirt with RE going down just 10%.<br/><br/>RE needs to make at least 10% for you to make a profit, with carrying costs, selling/buying closing costs, and paying a contractor.<br/><br/>Read Casey Serin's Story, none of his home went to zero but he still lost his shirt. He thought he could flip homes in less than 2 months. Every month you carry a place you have to pay a mortgage. The risk is that if you carry and rent it out what if the tenants damage the place? What if they don't pay rent and you have to evict?<br/><br/>There is risk in RE, like stocks, just a different sort. One big thing about RE is the amount of money needed as start up capital is a lot more than the stock market. How’s this, RE is difficult to get into for $5k but mutual funds are not?

RE is difficult to carry if you are only saving $500/month because often carrying a mortgage, plus paying contractors, etc.

RE doesn’t have to go to zero for you to lose your shirt. You could lose your shirt with RE going down just 10%.

RE needs to make at least 10% for you to make a profit, with carrying costs, selling/buying closing costs, and paying a contractor.

Read Casey Serin’s Story, none of his home went to zero but he still lost his shirt. He thought he could flip homes in less than 2 months. Every month you carry a place you have to pay a mortgage. The risk is that if you carry and rent it out what if the tenants damage the place? What if they don’t pay rent and you have to evict?

There is risk in RE, like stocks, just a different sort. One big thing about RE is the amount of money needed as start up capital is a lot more than the stock market.

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