Hey Chris, what are your thoughts on real estate?

[Farmer77]

Have you ever considered buying real estate as an investment?

[Chris]

Yup, I have some. It is a great investment, especially for the young who can afford to wait decades to cash out.

[Todd W]

Going down around here (CA) a lot in past few months (year about now)... getting better and better time to buy.. That is if you can afford 450k+ investments still, but in 10 years or so damn I can only imagine what it will be wroth!

[Doug]

I want to get into real estate someday. Right now I'm 19 and still in college so it is out of the question but I hope to invest shortly after college.

[Todd W]

I want to get into real estate someday. Right now I'm 19 and still in college so it is out of the question but I hope to invest shortly after college.

I wish we had some 100k to 150k homes around here I could invest in for long term. REnt them out and by the timeI retire they would be paid off and I could live off their income... oh CA :eek:

I may do this in another state, not sure. I'm going to check some out this summer.

[paul]

Before you buy rental real estate ask yourself "What sort of people are unable to buy their own home even with all the no down, low down, subsidized loan programs which are available today?" That's your customer demographic and your job will be to get them to pay the rent and not trash your house :)

[Chris]

That is true Paul, but not always.

People who rent:

People who cannot afford a down payment, or the monthly payment of 0 down. This isn't always bad people. I knew this guy who had a master's degree in epidemeology (sp?) he just had to finish his thesis. He was like 35. His wife was a secretary, they had 2 kids. They bought their first house shortly after I met him.

People who do not want to put down roots yet, they may need to move again after only a few years.

Retirees who sold their house to cash out equity and just want a temporary apartment until they need a nursing home.

If you want to attract a higher class of tenant, consider having a higher quality rental space. Buy a nicer place, charge more rent, and you'll have people who are better off (and hopefully better behaved).

[paul]

All certainly true.

I also found if you can afford to keep your rents slightly below market (5% perhaps) you will get MANY more applicants and can select the best.

What got my attention about the postings was the role reversal from the usual.

If someone jumps on this forum and asks how to make big bucks quick on the internet he will get told to work-study-learn until he knows what he is doing.

It's the same for realestate :)

[Shawn]

Yeah, I pay a ton for rent -- the same I'd pay for a mortgage.

Why haven't I bought? For the reason Chris mentioned -- we haven't been sure where we were going to live.

Just got married 1.5 years ago. Wife is finishing her last semester of graduate school now. We'll be getting a house within the next year as she'll be getting out of school and getting a job (math teacher) -- and we'll be planted.

Buying a house would've stuck us here for at least a few years and that's something we didn't want.

[Chris]

All certainly true.

I also found if you can afford to keep your rents slightly below market (5% perhaps) you will get MANY more applicants and can select the best.

What got my attention about the postings was the role reversal from the usual.

If someone jumps on this forum and asks how to make big bucks quick on the internet he will get told to work-study-learn until he knows what he is doing.

It's the same for realestate :)
Well there is a difference. Real Estate is an extremely slow way to wealth, but it is a very reliable way to wealth. Not so much get rich quick as get rich eventually.

[Todd W]

A lot of people rent around here because they commute to San Jose, San Francisco, etc. It def. does not mean you are a bad tenant.

I know guys who have rentals in "ghetto" areas that have 10+ yr quality tenants.

[Doug]

Not so much get rich quick as get rich eventually.

Which is exactly why I want to get into it as soon as I can out of college. I don't mind driving a $2000 car or foregoing some other non needed expenses to have more to invest. That way, I'll have even more money for those non needed expenses a few years down the road, not to mention be able to retire when I can still climb a flight of stairs.

[paul]

I think you can substitute the words "selected website" for the term "real estate" in almost anything you read and the material will still make sense. It even holds for some of the advanced asset protection and tax reduction strategies. (Content in one legal entity, domain in another, etc.) I think it will also be true of long term capital gains but who knows at this point.

I prefer websites myself because I can buy them with a much better price to profits relationship (Try buying real estate for 12 times net monthly earnings :)
and
There is no downside risk beyond loss of my investment. At one point in my life I had assumed the mortgages on 20 properties and was depending on the rent to make the payments. When the month comes where you can't do that things go downhill VERY fast :(