- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
1
Posted on 9/17/18 at 9:04 am to Fat Bastard
Thanks brother!
Posted on 9/17/18 at 9:11 am to plaric
no problem! FTR i use lots of property management also and if you are still getting good to great cash flow it is worth it. Just run all your numbers before you buy.
here is another that might help you
here is another that might help you
Posted on 9/17/18 at 10:51 am to Fat Bastard
Any reccomendations on how to estimate your cash flows or returns?
I have a spreadsheet built, really looking to try and validate it.
I have a spreadsheet built, really looking to try and validate it.
Posted on 9/17/18 at 11:16 am to eng08
I agree, my main area of issue is how do I find out what rents in the area of the property im looking at are so I can determine how much potential rent I can collect on it.
Posted on 9/17/18 at 11:49 am to plaric
Rentometer.com has been pretty good for me along with craigslist, driving around and calling and looking on Zillow.
Posted on 9/17/18 at 12:10 pm to plaric
Stocks are almost always going to outpace real estate over a long horizon. The reason is because when you invest in real estate you are taking out the most powerful force in the world...compounding interest.
If you assume stocks average 8% return. Look back over the history of the stock market, this is pretty standard and the longer you hold investments the less the risk becomes.
At 8% and reinvesting your returns, you investment will double every 9 years. Round that up to 10 years to be conservative and to make the math easier. I invest $50k in the market and its worth $100k after 10 years, $200k after 20 years and $400k after 30 years. I use 30 years because that would put you at retirement age.
Someone else in the thread mentioned they try to recoup their investment in 5 years so the same $50k investment would need to be $10 cash flow positive per year. I think that is a little aggressive but using that math ($50 k investment, $10k per year cash flow), after 10 years I am in the same place ($50k positive cash flow and a $50k asset) and after 20 years I am at the same place ($100k cash flow and $50k asset). But when you start pushing out further stocks really pull away. After 30 years stocks are $100k ahead of the real estate. If I push it out to 40 years my stock investment is worth $800k and my real estate investment is worth $450k.
You can put together a simple spreadsheet and prove this to yourself. I have oversimplified it because there are additional expenses with real estate like maintenance and upkeep but there is also appreciation and rising rent rates. Also, how do you reinvest your returns will have an effect.
Real estate has a place in a portfolio but it usually won't beat the returns of stocks over the long term. Not to mention less headaches with stocks over real estate (even with a management company) and the loss of liquidity.
If you assume stocks average 8% return. Look back over the history of the stock market, this is pretty standard and the longer you hold investments the less the risk becomes.
At 8% and reinvesting your returns, you investment will double every 9 years. Round that up to 10 years to be conservative and to make the math easier. I invest $50k in the market and its worth $100k after 10 years, $200k after 20 years and $400k after 30 years. I use 30 years because that would put you at retirement age.
Someone else in the thread mentioned they try to recoup their investment in 5 years so the same $50k investment would need to be $10 cash flow positive per year. I think that is a little aggressive but using that math ($50 k investment, $10k per year cash flow), after 10 years I am in the same place ($50k positive cash flow and a $50k asset) and after 20 years I am at the same place ($100k cash flow and $50k asset). But when you start pushing out further stocks really pull away. After 30 years stocks are $100k ahead of the real estate. If I push it out to 40 years my stock investment is worth $800k and my real estate investment is worth $450k.
You can put together a simple spreadsheet and prove this to yourself. I have oversimplified it because there are additional expenses with real estate like maintenance and upkeep but there is also appreciation and rising rent rates. Also, how do you reinvest your returns will have an effect.
Real estate has a place in a portfolio but it usually won't beat the returns of stocks over the long term. Not to mention less headaches with stocks over real estate (even with a management company) and the loss of liquidity.
Posted on 9/17/18 at 12:20 pm to BamaAlum02
Interesting take.
This is why I keep going back and forth haha. Tax benefits of owning rentals makes it interesting as well. I just dunno, I am suffering from FOBO (fear of better options)...
This is why I keep going back and forth haha. Tax benefits of owning rentals makes it interesting as well. I just dunno, I am suffering from FOBO (fear of better options)...
Posted on 9/17/18 at 12:25 pm to BamaAlum02
You would have to reinvest all RE cash flow to make it truly apples to apples but I agree with your premise.
Posted on 9/17/18 at 12:39 pm to jimbeam
Yeah, whatever I end up doing will be 100% reinvested as I don't need it now. IF I can get the passive income to where I want it quick enough I can maybe dial back how much I work and actually spend more time with my kids........funny how those little creatures shift priorities
Posted on 9/17/18 at 1:23 pm to jimbeam
quote:
You would have to reinvest all RE cash flow to make it truly apples to apples but I agree with your premise.
Agree.
The other problem is I think it is hard to find rental properties where you can recover your investment in 5 years. At least in my market, it is closer to 10 years. $50,000 houses don't rent for $1,000 per month in Huntsville, AL. It is closer to $500 per month.
Posted on 9/17/18 at 1:34 pm to BamaAlum02
LOL.
Posted on 9/17/18 at 1:37 pm to BamaAlum02
You obviously did not click my link at the top.
The point in RE with leveraged properties is the COC return. Not ROI. I do way better in RE. the COC IS THE RETURN. but if too little is put down it means nothing without the cash flow metric.
The point in RE with leveraged properties is the COC return. Not ROI. I do way better in RE. the COC IS THE RETURN. but if too little is put down it means nothing without the cash flow metric.
Posted on 9/17/18 at 1:38 pm to plaric
Use your RE profits to buy more RE.
Posted on 9/17/18 at 1:43 pm to BamaAlum02
Based on monies used for down payment I can recover that quickly also. 4 years or less.
Posted on 9/17/18 at 1:50 pm to Fat Bastard
quote:
You obviously did not click my link at the top.
Clicked the 1st and 2nd one and it was pretty flawed logic in #2 so I didn't go past that.
Posted on 9/17/18 at 1:54 pm to Fat Bastard
I feel like I've stumbled into one of those seminars they advertise on the radio.
"Make money in real estate using other people money! Did you know your city in BFE is they perfect market for our model."
"Make money in real estate using other people money! Did you know your city in BFE is they perfect market for our model."
Posted on 9/17/18 at 2:02 pm to BamaAlum02
Spreadsheet for RE investment. 10 Year Analysis
LINK
I've used this for many years. And it has a download option for Excel.
LINK
I've used this for many years. And it has a download option for Excel.
This post was edited on 9/17/18 at 2:03 pm
Posted on 9/17/18 at 2:02 pm to BamaAlum02
Montgomery has a decent number of houses that you can buy for 40-50 and rent for 650 or so....
Posted on 9/17/18 at 2:05 pm to plaric
Hey Fat Bastard...is there a way to get in touch with you directly?
Page 2 of 4
Popular
Back to top
Follow TigerDroppings for LSU Football News