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re: Another reason why real estate > stock market
Posted on 1/6/14 at 7:50 pm to I Love Bama
Posted on 1/6/14 at 7:50 pm to I Love Bama
quote:Extreme lower middle class maybe. May be middle class to the media but around $50K doesn't seem like middle class
'm up to quite a few rentals now and none of my tenants make less than $40,000 a year.
1
Posted on 1/6/14 at 8:00 pm to TigerTatorTots
quote:
May be middle class to the media but around $50K doesn't seem like middle class
Read the thread.
Posted on 1/6/14 at 8:10 pm to I Love Bama
I got bored after the first page 
Posted on 1/6/14 at 8:35 pm to I Love Bama
quote:
I Love Bama
How old are you and how long have you been doing this? Is this your full time job? How did you get your start in RE? If one does not want to deal with home repairs, but still wants to invest in rental properties, how do they take care of home repairs/maintenance?
This post was edited on 1/6/14 at 8:39 pm
Posted on 1/6/14 at 8:44 pm to stendulkar
quote:
How old are you
30
quote:
how long have you been doing this
5 yearsish
quote:
Is this your full time job?
Nope
quote:
If one does not want to deal with home repairs, but still wants to invest in rental properties, how do they take care of home repairs/maintenance?
I feel like this is a big misconception. What repairs? I've got good tenants who take care of small shite their self. I'm not going to get a call about a clogged sink.
The calls I get are something major that the tenants don't need to deal with. I've had four calls over the last four or five years.
Posted on 1/6/14 at 9:16 pm to I Love Bama
carrying costsPosted on 1/7/14 at 9:31 pm to I Love Bama
I invest in real estate and am happy doing so. Tonight I got a call about a breaker that keeps tripping, and will get it addressed tomorrow. No big deal. I netted about 12K this year off of it. I'm not looking to get rich short term here, but the extra 12K isn't bad. But my goal is to pay it off in 15 years and be netting at least 5K a month when I'm 50. I'd like that number to be a lot higher but we'll see. I kind of look at that as a pension of sorts with the option to sell off units for lump sums if I ever want too, or need more money
As far as whether real estate or stocks are the better investment, there is no blanket answer. It all depends on which real estate market you invest in, and which stocks. Historically both have gone up at pretty good rates, even after you account for all the dips and bubbles in each market. I choose to invest in both, but am heavier into real estate.
As for the 2-3% rule, that's not possible with the neighborhoods I invest in here in BR. I only buy in mid-city, garden district, capital heights area. And I only do multi family units like duplexes and four plexes. There aren't many on the market and when a good property comes along they generally go pretty quick if the price is reasonable. I pay a bit of a premium for these neighborhoods but can charge higher rent and they are vacant less often. I can probably do 2-3% in places like Gardere and certain other areas but that market is flooded with units for sale. People can't give them away. I think you can make a good return short term there, but you have to be a slum lord and they're very illiquid. You are lucky that you can get that return where you live. For example, I just put in an offer on a duplex in the garden district. It was listed at 229,000, and both sides were rented out for 950 each. They had seven offers in just one day so the listing realtor told everybody to submit there best and final, and she also sent along an appraisal. It sold for above appraisal (not to me).
As far as whether real estate or stocks are the better investment, there is no blanket answer. It all depends on which real estate market you invest in, and which stocks. Historically both have gone up at pretty good rates, even after you account for all the dips and bubbles in each market. I choose to invest in both, but am heavier into real estate.
As for the 2-3% rule, that's not possible with the neighborhoods I invest in here in BR. I only buy in mid-city, garden district, capital heights area. And I only do multi family units like duplexes and four plexes. There aren't many on the market and when a good property comes along they generally go pretty quick if the price is reasonable. I pay a bit of a premium for these neighborhoods but can charge higher rent and they are vacant less often. I can probably do 2-3% in places like Gardere and certain other areas but that market is flooded with units for sale. People can't give them away. I think you can make a good return short term there, but you have to be a slum lord and they're very illiquid. You are lucky that you can get that return where you live. For example, I just put in an offer on a duplex in the garden district. It was listed at 229,000, and both sides were rented out for 950 each. They had seven offers in just one day so the listing realtor told everybody to submit there best and final, and she also sent along an appraisal. It sold for above appraisal (not to me).
Posted on 1/7/14 at 10:50 pm to BullredsRus
The thing about Huntsville that makes it a great real estate market in my opinion:
Specifically to this area. As has already been said these houses were built to house NASA and Military growth which is the majority of Huntsville growth in the last 50 years. Most of the NASA engineers and military from that long ago don't care about being in the fanciest/biggest house, having the fanciest things, or driving the fanciest cars. They've worked on the Arsenal for 50 years, made 80-100k/yr (inflation adjusted), saved most of it, lived in the same house, and driven 5 Toyota Camry/Honda Civic type cars during that time.
New Huntsville however is completely different and there are plenty of BMW, 500k+ house (very fancy in North Alabama) show off your wealth type people living there now.
Specifically to this area. As has already been said these houses were built to house NASA and Military growth which is the majority of Huntsville growth in the last 50 years. Most of the NASA engineers and military from that long ago don't care about being in the fanciest/biggest house, having the fanciest things, or driving the fanciest cars. They've worked on the Arsenal for 50 years, made 80-100k/yr (inflation adjusted), saved most of it, lived in the same house, and driven 5 Toyota Camry/Honda Civic type cars during that time.
New Huntsville however is completely different and there are plenty of BMW, 500k+ house (very fancy in North Alabama) show off your wealth type people living there now.
Posted on 1/8/14 at 7:09 am to LSURussian
quote:
Always remember that every single banking crisis in the U.S. in the past 100 years was associated with a real estate collapse. There is no asset class more illiquid than real estate at a time when the owner needs the liquidity the most.
That's where the money is to some of us. But as stated I agree a target fund for most is the safer way. That said I have out performed the market in RE, but it's my job. Be careful ILB, north AL is now part of our MLS, & if I start showing some of my investors those returns, you'll get unwanted competition.
Posted on 1/8/14 at 7:12 am to I Love Bama
quote:
I feel like this is a big misconception. What repairs? I've got good tenants who take care of small shite their self. I'm not going to get a call about a clogged sink.
I think this is the best misconception going, I do everything I can to play it up.
Posted on 1/8/14 at 7:40 am to BullredsRus
quote:
For example, I just put in an offer on a duplex in the garden district. It was listed at 229,000, and both sides were rented out for 950 each. They had seven offers in just one day so the listing realtor told everybody to submit there best and final, and she also sent along an appraisal. It sold for above appraisal (not to me).
how could you make money with that as a rental? from what I could see, it would be a very long time before you could make money in that situation. by the time you figure taxes, insurance on the structure, and repairs, there is no profit left even if financed for 30 years.
Posted on 1/8/14 at 8:27 am to I Love Bama
I Love Bama, I'm actually trying to get into more real estate investing around BTR. I have one house currently that was my first place, purchased with an FHA loan, and currently rented out. I'd love to start finding more properties at a discount like you have done, but need to figure out a way to find these properties and accrue the cash or loan financing to buy properties. Do you, or anyone else here, have any good suggestions on how to work my way into purchasing more properties?
The current property has been great for me over the past year, and I also have not had too many issues with my tenant. I agree, finding that perfect tenant is everything. It's very nice seeing the extra income pile up each month, and I'd love to see that number grow
The current property has been great for me over the past year, and I also have not had too many issues with my tenant. I agree, finding that perfect tenant is everything. It's very nice seeing the extra income pile up each month, and I'd love to see that number grow
Posted on 1/8/14 at 8:29 am to diat150
Well lets assume a 235K asking price. If you finance 75% at 5% interest that puts your note at just under 950 for principal and interest. I calculated roughly 450 a month for taxes and insurance. So that would net you roughly 500 per month before repairs. I like to have a little more wiggle room and that's why I my offer wasn't accepted, but I was just giving an example of the prices asked in the better areas and the demand due to people paying those higher prices.
I have to put down 25% on all multi family properties. Haven't found a lender that will let you get away with less.
I have to put down 25% on all multi family properties. Haven't found a lender that will let you get away with less.
Posted on 1/8/14 at 10:21 am to ItNeverRains
quote:
That's where the money is to some of us. But as stated I agree a target fund for most is the safer way. That said I have out performed the market in RE, but it's my job. Be careful ILB, north AL is now part of our MLS, & if I start showing some of my investors those returns, you'll get unwanted competition
You son of a bitch.
Posted on 1/8/14 at 1:38 pm to I Love Bama
quote:
I feel like this is a big misconception. What repairs? I've got good tenants who take care of small shite their self. I'm not going to get a call about a clogged sink.
How about when a tenant finishes their lease and vacates? Do you usually have a do a lot of cleaning/repairs then...like carpets, paint etc? Do you do that yourself or do you contract it out? Also how much security deposit do you take from each renter?
Posted on 1/8/14 at 1:59 pm to stendulkar
quote:
Do you usually have a do a lot of cleaning/repairs then...like carpets, paint etc?
I have a checklist I provide each tenant that is leaving.
For example, if I have to clean the refrigerator? $50 is deducted from your security deposit.
Oh, the kitchen isn't swept and mopped? That will be $25. etc....
quote:
Do you do that yourself or do you contract it out?
Both. really depends on if i feel like doing it or not.
quote:
Also how much security deposit do you take from each renter?
One month rent.
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