Buying and holding investment properties over the past 40 some years has been exceedingly profitable for me, especially when I periodically sold some. I would plow the sales proceeds into the stock market, mostly into REITs which I understand better than the non-dividend paying Techs. However, unless you are comfortable dealing with TTT (tenants, toilets and trash), better be prepared to share up to 10% of your rent proceeds with a good professional property manager.
This is a great time to invest in RE. Probably not the best time for a flipper, who plans to buy, fix a bit, and sell for a profit. That's not investing, it's speculation. A real estate investor plans to buy, fix a bit, and rent out long term. The key to this investment is net cash flow. We are presently able to purchase or build new houses, get reasonable financing, often fixed rate for 10 years, and rent for a positive cash flow in year one. As the rents have climbed, the cash flow increases annually. All signs today appear to be heading to higher rents in 2022. Our costs are nearly flat, and our cash flow is great. How's the cash flow on your cash or gold investments? We have a near zero vacancy rate. We don't care what the property values changes to over the next couple of years. We're not selling.
Back in the late 1980's I was in the Residential construction business in Fairfield County, Ct. Mostly additions and renovation work but some new construction as well. I was also a subscriber to the Kiplinger Letter. One of the KL issues was quite alarming. The basic premise was that when homes on the market became priced at a point where less than 5% of the average wage earners could afford homes, the RE market was due for a correction. I acted on that advice and divested myself of all new home construction projects and all Land held for that purpose. Many of my colleagues sniffed at this prediction and went on, at a relatively leisurely pace to completing their new home projects. Within a year, all had lost their shirt, selling at or below invested cost and many had to re-mortgage their primary residence to make good to the banks. Later on, I found out that this pattern of over-investment in buildable land, with total bankruptcy resulting once the build cycle turned, was a well-trod path for generations of Builders. So, today, just a "heads up" to my old building trade buddies. This may be the ideal time to sell into a good market, any and all over-leveraged holdings where profit is an aspiration requiring endless lines of "the Greater Fool", going forward from here.
Philadelphia had as may murders percaptja a civilian deaths in Ukraine. Not sure the price of a single family in Ukraine these days. 5 years ago in Philadelphia, PA I purchased run down rental home that came with a free more run down house next door total price $37,000 for both. Total spent on renovations to make rentable $58,000. Recently the City is in search of taxable suckers. Add in a few extra worthless licenses, a lead paint inspection every 6 months, $300 fee to pick up trash, and it is time to sell before any new fees. The end is near both the house receiving the most renovations is listed for $179,000 with the painted pig next door listed for $90,000. I'd be ecstatic to get half of that for each. But who am I to fault New Yorkers bargain hunting in Philadelphia. I've been told there is no cash flow in NY rentals, might as well create the same system in Philadelphia.
I am from Sydney, Australia. Property was hot during 2020-2021. Now its slowing down. I don't expect Major correction this year, may be 10% correction due to interest rate hikes (Property prices gone up in last 2 years about 40-50%.) Again when it correct 10 % then GOVT/Fed/RBA will do something stupid to prop the property market and I still think RE market would go up until 2025/26 and after that all bets are off.
Summers also pointed out no one at Fed was fired and they haven't changed their forecast models. They were wrong and will continue to be wrong. On the real estate comments, millennials are now buying homes. They are also moving to Florida to remote work from sunny climate. Demand leading to increased rents and prices. If you stay in house and have long term fixed debt it will work out as inflation makes building new homes very costly.
Buying and holding investment properties over the past 40 some years has been exceedingly profitable for me, especially when I periodically sold some. I would plow the sales proceeds into the stock market, mostly into REITs which I understand better than the non-dividend paying Techs. However, unless you are comfortable dealing with TTT (tenants, toilets and trash), better be prepared to share up to 10% of your rent proceeds with a good professional property manager.
This is a great time to invest in RE. Probably not the best time for a flipper, who plans to buy, fix a bit, and sell for a profit. That's not investing, it's speculation. A real estate investor plans to buy, fix a bit, and rent out long term. The key to this investment is net cash flow. We are presently able to purchase or build new houses, get reasonable financing, often fixed rate for 10 years, and rent for a positive cash flow in year one. As the rents have climbed, the cash flow increases annually. All signs today appear to be heading to higher rents in 2022. Our costs are nearly flat, and our cash flow is great. How's the cash flow on your cash or gold investments? We have a near zero vacancy rate. We don't care what the property values changes to over the next couple of years. We're not selling.
Lots of bugs out there looking for a windshield!
No comment today, I am flabbergasted!!!
Back in the late 1980's I was in the Residential construction business in Fairfield County, Ct. Mostly additions and renovation work but some new construction as well. I was also a subscriber to the Kiplinger Letter. One of the KL issues was quite alarming. The basic premise was that when homes on the market became priced at a point where less than 5% of the average wage earners could afford homes, the RE market was due for a correction. I acted on that advice and divested myself of all new home construction projects and all Land held for that purpose. Many of my colleagues sniffed at this prediction and went on, at a relatively leisurely pace to completing their new home projects. Within a year, all had lost their shirt, selling at or below invested cost and many had to re-mortgage their primary residence to make good to the banks. Later on, I found out that this pattern of over-investment in buildable land, with total bankruptcy resulting once the build cycle turned, was a well-trod path for generations of Builders. So, today, just a "heads up" to my old building trade buddies. This may be the ideal time to sell into a good market, any and all over-leveraged holdings where profit is an aspiration requiring endless lines of "the Greater Fool", going forward from here.
Philadelphia had as may murders percaptja a civilian deaths in Ukraine. Not sure the price of a single family in Ukraine these days. 5 years ago in Philadelphia, PA I purchased run down rental home that came with a free more run down house next door total price $37,000 for both. Total spent on renovations to make rentable $58,000. Recently the City is in search of taxable suckers. Add in a few extra worthless licenses, a lead paint inspection every 6 months, $300 fee to pick up trash, and it is time to sell before any new fees. The end is near both the house receiving the most renovations is listed for $179,000 with the painted pig next door listed for $90,000. I'd be ecstatic to get half of that for each. But who am I to fault New Yorkers bargain hunting in Philadelphia. I've been told there is no cash flow in NY rentals, might as well create the same system in Philadelphia.
I am from Sydney, Australia. Property was hot during 2020-2021. Now its slowing down. I don't expect Major correction this year, may be 10% correction due to interest rate hikes (Property prices gone up in last 2 years about 40-50%.) Again when it correct 10 % then GOVT/Fed/RBA will do something stupid to prop the property market and I still think RE market would go up until 2025/26 and after that all bets are off.
Summers also pointed out no one at Fed was fired and they haven't changed their forecast models. They were wrong and will continue to be wrong. On the real estate comments, millennials are now buying homes. They are also moving to Florida to remote work from sunny climate. Demand leading to increased rents and prices. If you stay in house and have long term fixed debt it will work out as inflation makes building new homes very costly.
Are you saying that we should sell any REITs?
The same thing is happening in the UK.
When will it end badly though? Do you see a crash or just a gradual decline?