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Pro's & Con's of Investing in Real Estate
Posted on 1/2/21 at 9:26 pm
Posted on 1/2/21 at 9:26 pm
If you feel like you could retire in the next 20 years, is it worth it to get started now, or stay the course with retirement savings in your opinion?
What are your specific pros & cons?
TIA!
What are your specific pros & cons?
TIA!
8
Posted on 1/2/21 at 9:37 pm to BallyHOO
I want so bad to get into the rental game...but that 2:00 am call about a clogged toilet or the AC burning out in July...those type of things have stopped me....I am not a handyman
Posted on 1/2/21 at 9:45 pm to BallyHOO
What are you in now? Just equities?
If you can hire a management company and get your ROI it’s great.
It also depends on what kind of properties you are looking at and how you are purchasing as in cash, loan, etc. Are we talking B or better properties or crappy places?
If you are going below solid C property you better have some moral flexibility because your tenants will and dealing with them in a financially sound manner is tough. You don’t frick around with dates and times or hire a management company that will be firm.
If you can hire a management company and get your ROI it’s great.
It also depends on what kind of properties you are looking at and how you are purchasing as in cash, loan, etc. Are we talking B or better properties or crappy places?
If you are going below solid C property you better have some moral flexibility because your tenants will and dealing with them in a financially sound manner is tough. You don’t frick around with dates and times or hire a management company that will be firm.
Posted on 1/2/21 at 9:48 pm to BallyHOO
This whole “government telling me I can’t evict a non payer” is really giving me second thoughts. Tack in potential 1031 changes and I’m reconsidering. Someone please change my mind
Posted on 1/2/21 at 10:12 pm to jimbeam
quote:
This whole “government telling me I can’t evict a non payer” is really giving me second thoughts
Not going to try and change your mind. What are landlords doing during this shite show? I know they can still get a money judgment, but damn.
Posted on 1/2/21 at 10:16 pm to KillTheGophers
quote:
I want so bad to get into the rental game...but that 2:00 am call about a clogged toilet or the AC burning out in July...those type of things have stopped me....I am not a handyman
Been doing it a long time and have never received that call. Probably the worst has been a clogged drain line on an a/c in the summer, which I have received quite a few times. It’s not for everyone but if you don’t leave a lot of deferred maintenance and do routine preventative maintenance then you should get very few calls like that.
Posted on 1/2/21 at 10:30 pm to BallyHOO
Part of me really wants to get in the game but then the other part looks at the return I'm getting in the market and it just doesn't seem worth it on the surface.
I would want to buy properties that are close by, but my hood and the ones immediately surrounding it make no sense for a rental investment properties. To get a half decent return if have to rent it out at a really high rate and that return blows up if it goes a month or two without a tenant. Rents haven't kept pace with home prices.
I guess I could play the appreciation game but idk how much room that has to go in my area.
I would want to buy properties that are close by, but my hood and the ones immediately surrounding it make no sense for a rental investment properties. To get a half decent return if have to rent it out at a really high rate and that return blows up if it goes a month or two without a tenant. Rents haven't kept pace with home prices.
I guess I could play the appreciation game but idk how much room that has to go in my area.
Posted on 1/2/21 at 10:43 pm to BallyHOO
Rent ROI is just part of it. The tax implications and all the new ways you can limit your taxable income is often overlooked. I’m only one rental in so take my limited experience for what it’s worth. But, getting into rentals should/will be a lot more initial work. You can get a realtor, hire a general contractor and get a management company but your return is going to be shite. If you’re willing to truly learn your market and the neighborhoods nearby, you’ll get a good gauge of a deal when it pops up. You don’t need 20 right now. You need 1, so educate and get prepared for when you find one that the numbers work.
Posted on 1/2/21 at 10:54 pm to baldona
Yes, Baldona, just equities currently.
I’d be financing the property.
I’d be focused on finding newer properties that require little immediate maintenance, with the exception of the unknowns that pop up from time to time.
Thanks again...
I’d be financing the property.
I’d be focused on finding newer properties that require little immediate maintenance, with the exception of the unknowns that pop up from time to time.
Thanks again...
Posted on 1/2/21 at 11:00 pm to Athletix
In my area houses are selling for ~30% more than they were just 6 months ago and 95% are under contract within days. Only the homes that are truly in D neighborhoods are left and even those that don’t need major rehab are selling after a few months. A house just went under contract in my neighborhood for +75% what they paid for it just over 2 years ago. It’s absolutely crazy. I’ve been considering trying my hand in REI but I don’t see how people are being profitable in today’s market. No way they can make a justified return when paying what they are for the homes.
This post was edited on 1/2/21 at 11:04 pm
Posted on 1/2/21 at 11:02 pm to GAFF
Yeah this market can't keep like this can it? It's been like this for about 2 years in my area
Posted on 1/2/21 at 11:06 pm to HailToTheChiz
quote:
Yeah this market can't keep like this can it? It's been like this for about 2 years in my area
I don’t see how but I was saying that a year ago
Posted on 1/2/21 at 11:07 pm to GAFF
quote:
In my area houses are selling for ~30% more than they were just 6 months ago and 95% are under contract within days. Only the homes that are truly in D neighborhoods are left and even those that don’t need major rehab are selling after a few months. A house just went under contract in my neighborhood for +75% what they paid for it just over 2 years ago. It’s absolutely crazy. I’ve been considering trying my hand in REI but I don’t see how people are being profitable in today’s market. No way they can make a justified return when paying what they are for the homes.
That and my gut tells me that if a property hits MLS or the internet sites it's probably not a good investment deal to begin with.
Posted on 1/3/21 at 1:42 am to GAFF
My partner and I bought a small commercial bldg with enough property to develop another larger bldg in the future. Our goal over the next 5-7 yrs is to have roughly 60-70ksf of commercial/industrial flex space. I’m starting to rethink this path a little though with the state of our country and where we seem to be headed with inflation. We won’t get over leveraged but it’s beginning to feel risky. As I start following crypto and understand the principles behind it I can’t help but wonder how it could affect real estate. I’d like to hear if anyone has thoughts on long term commercial real estate investment if we move away from legacy fiat system to an inflation resistant crypto system.
Posted on 1/3/21 at 7:16 am to JohnnyKilroy
Algiers point has always interested me for owning a duplex. Safe little area(if truly in the point) and cost barrier is low. Anyone have any thoughts on that area?
Posted on 1/3/21 at 9:02 am to JohnnyKilroy
quote:
Part of me really wants to get in the game but then the other part looks at the return I'm getting in the market and it just doesn't seem worth it on the surface.
agreed. i know this board is very pro-RE/rental and i have a couple friends KILLING it right now
but nobody has really sold me that RE isn't vastly overpriced and facing a massive correction the next 18 months. it just feels like buying in now is buying in July 2008 all over again.
Posted on 1/3/21 at 9:04 am to JohnnyKilroy
quote:
That and my gut tells me that if a property hits MLS or the internet sites it's probably not a good investment deal to begin with.
i actually have had a side quest that i've been ignoring for a few years relating to getting a RE license
i just get so mad when i think about it b/c that's one of the worst examples of government overreach i can think of
i can pass the bar and open up a law firm but i'm too stupid to be a RE agent without a broker taking a huge cut of my revenue? wtf?
Posted on 1/3/21 at 9:14 am to BallyHOO
I just jumped pretty heavily into the game the past year. Bought three properties -- one SFH, one duplex, and one commercial building with an Airbnb on the second floor.
It's been quite a learning curve, but we are making a killing on the SFH/duplex. We also got incredible deals. I would be very wary of buying investment properties right now with the market being so nuts.
ETA: our commercial building will also be printing money soon, but I will never buy another commercial building again. The closing was a nightmare.
It's been quite a learning curve, but we are making a killing on the SFH/duplex. We also got incredible deals. I would be very wary of buying investment properties right now with the market being so nuts.
ETA: our commercial building will also be printing money soon, but I will never buy another commercial building again. The closing was a nightmare.
This post was edited on 1/3/21 at 9:16 am
Posted on 1/3/21 at 9:15 am to SlowFlowPro
There's no way the market doesn't correct itself within the next year or two. Prices are insane everywhere
Posted on 1/3/21 at 9:32 am to SlowFlowPro
It’s such bullshite you have to be affiliated with a broker. I’ve looked into it as well.
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