- 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
UPDATED: Landlords, what ROI do you expect from your properties? 401k withdrawal question
Posted on 8/1/20 at 2:42 pm
Posted on 8/1/20 at 2:42 pm
And if it’s equal or less than the average stock ROI why not invest your money into stocks and make it work more for you?
Considering taking a portion of my 401k out to buy a rental property using the CARES Act. Pros and Cons.
Considering taking a portion of my 401k out to buy a rental property using the CARES Act. Pros and Cons.
This post was edited on 8/1/20 at 5:27 pm
9
Posted on 8/1/20 at 2:47 pm to GAFF
COC? IRR?
Posted on 8/1/20 at 2:49 pm to jimbeam
Yes, COC
Posted on 8/1/20 at 3:29 pm to GAFF
quote:
why not invest your money into stocks and make it work more for you?
Diversifying returns.
My worst year was 2018. Made about 4% return on capital. Most years I do about 8%
Posted on 8/1/20 at 3:43 pm to GAFF
Leveraged 50-80%
Unlevered 20%
Buy a house for cash 50k, rent for $10,800 year
Or finance for 10k down gross $10,800 net 9k after interest.
These numbers are proforma.
Unlevered 20%
Buy a house for cash 50k, rent for $10,800 year
Or finance for 10k down gross $10,800 net 9k after interest.
These numbers are proforma.
Posted on 8/1/20 at 3:56 pm to C
Why not invest in the market and make more money?
Posted on 8/1/20 at 4:32 pm to AUCE05
quote:
Why not invest in the market and make more money?
It’s probably 15% of my portfolio
Posted on 8/1/20 at 4:45 pm to GAFF
Diversify Is main reason
Monthly income(like bonds or dividends)
Appreciation value of unit value ( you could argue also this will result in increasing rent so sorta has an inflation aspect built into income stream)
Apply money to improve it and write it off
(Repairs versus improvement consideration and amortization thought required)
Reduced income from feds (depreciation Of unit applied to income will reduce taxable income from rent)
Monthly income(like bonds or dividends)
Appreciation value of unit value ( you could argue also this will result in increasing rent so sorta has an inflation aspect built into income stream)
Apply money to improve it and write it off
(Repairs versus improvement consideration and amortization thought required)
Reduced income from feds (depreciation Of unit applied to income will reduce taxable income from rent)
Posted on 8/1/20 at 5:24 pm to GAFF
The market has been on a tear. That is not always the case.
Many times it loses money.
Many times it loses money.
Posted on 8/1/20 at 5:24 pm to Thecoz
So if diversifying is mainly the reason would it be unwise to take advantage of the CARES Act and withdraw say 30k from my 401k to put into a rental property (downpayment)? Would this not be the same as buying a stock in a sense? But with the added features that are listed above?
Posted on 8/1/20 at 5:31 pm to GAFF
how is your 401K invested?
what’s the current return?
what’s the current return?
Posted on 8/1/20 at 5:43 pm to GAFF
I think it is definitely something to consider, especially since you can use leverage. Real estate, especially lower income real estate, is real money. It will always be worth a certain amount of someone’s labor. It is definitely not passive like being a shareholder is.
Posted on 8/1/20 at 5:50 pm to GAFF
I am not familiar with the cares act and 401 option (I am retired and no penalties)
Does this withdraw have penalties??
Is the 401 money switched to equivalent of regular income...
If still classified 401 you need to set up a self directed account for 401 money invested in real estate... difficult and more important is you lose all the important tax write offs...Do not do this...
If cares lets you convert 401 to regular cash (Like you could go buy a car with) and you are honest with yourself and keep this as retirement investment then I could see your interest....
If you want to learn about rental get the book
Nola every landlords tax deduction guide
I am retired and have a “bucket portfolio”
I have a fixed annuity bucket ( retirement)
A fixed income bucket corporate/govt cds
A growth bucket domestic and international index funds )
And a rental income bucket
Does this withdraw have penalties??
Is the 401 money switched to equivalent of regular income...
If still classified 401 you need to set up a self directed account for 401 money invested in real estate... difficult and more important is you lose all the important tax write offs...Do not do this...
If cares lets you convert 401 to regular cash (Like you could go buy a car with) and you are honest with yourself and keep this as retirement investment then I could see your interest....
If you want to learn about rental get the book
Nola every landlords tax deduction guide
I am retired and have a “bucket portfolio”
I have a fixed annuity bucket ( retirement)
A fixed income bucket corporate/govt cds
A growth bucket domestic and international index funds )
And a rental income bucket
Posted on 8/1/20 at 6:00 pm to Thecoz
I’m going to do more reading before doing anything but as I understand it, it’s liquid money. No penalty but it is charged as income that can be divided over 3 years (10k income a year).
This post was edited on 8/1/20 at 6:02 pm
Posted on 8/1/20 at 6:08 pm to GAFF
Get that book...
I knew nothing on rentals and bought it off amazon...
It is easy reading...
Lots of benefits...you can reduce income from feds.(Depreciation)..write off reasonable trips if rental in a place you want to visit etc..but have to be there for rental business also..
.
Also you can argue that a rental does have inflation in it ( rents increase over time) which is significant when using it as aN income stream in retirement...
I wish I had started picking up a few rentals when I was younger...
Good luck
I knew nothing on rentals and bought it off amazon...
It is easy reading...
Lots of benefits...you can reduce income from feds.(Depreciation)..write off reasonable trips if rental in a place you want to visit etc..but have to be there for rental business also..
.
Also you can argue that a rental does have inflation in it ( rents increase over time) which is significant when using it as aN income stream in retirement...
I wish I had started picking up a few rentals when I was younger...
Good luck
Posted on 8/1/20 at 6:22 pm to Thecoz
Better hope a Prez Biden doesn’t get rid of 1031 or you’ll be paying the depreciation recapture one day
Posted on 8/1/20 at 6:38 pm to jimbeam
Leave it to your kids
It zeros out
It zeros out
Posted on 8/2/20 at 5:49 pm to jimbeam
If he wins it is gone.
I fear that we will see some type of new taxation on 401k balances as well.
I fear that we will see some type of new taxation on 401k balances as well.
Posted on 8/2/20 at 8:29 pm to GAFF
Posted on 8/3/20 at 4:43 am to GAFF
One reason is to have some diversity from having all your money in one or two things.
The return is different. I reinvest the rent into paying down the mortgage, but you have to consider the value increase of the house when you sell it. I’ve had houses increase in value pretty quickly.
The return is different. I reinvest the rent into paying down the mortgage, but you have to consider the value increase of the house when you sell it. I’ve had houses increase in value pretty quickly.
Page 1 of 2
Popular
Back to top
Follow TigerDroppings for LSU Football News