Quote:
Originally Posted by Goat Rodeo
House:
- Real estate taxes
- Maintenance
- Upgrades required to maintain saleability (have you priced a kitchen or bathroom remodel lately?)
Renting:
- Having to deal with tenants
- Having to deal with tenants
- Having to deal with a management company
There are easier ways to make money. Any stock or business can become worthless yes, but you seem to ignore what has happened since 2007. Many real estate investments have become worthless or worse as well.
For example, my friend
- Bought a fixer-upper house near the water in a well located development for about 300K in 2006. Comps were around 400K.
- Invested 50K replacing AC, remodeling kitchen, flooring, replacing water heater, etc.
- Pays 5K per annum or whatever in taxes
- House is currently worth 180K, comps are around 150-180K
- Because he only spent 50K remodeling the place people are passing on his unit even for 180K because he needed to spend about 100K to compare with fit and finish of longer term owners.
- Currently rents it out for about $1200/mo
Had he invested that 300K in the stock market at the *worst part* in 2007 and just held through the downturn till now he would probably have ~500K worst case right now. Instead he is significantly upside down and has to deal with tenants.  |
here's a peek into my personal reit (no mortgages):
townhouse in a better suburb of l.a.: bought 260k in 2000, currently pushing 800k
apartment in china: bought new 150k in '03, also pushing 800k now
i've remodeled my kitchen once, and it's still good. property taxes are an expense, but rent EASILY outpaces that. 50k and the place is easily a full remodel. the next forseeable maintenance? a new a/c (~3k), and i've been eyeing that for years.
i work and play at home because i have the space, and it's already paid for. i get great chinese food delivered because it's cheaper, and i have the space to eat here.
one last example: had a college buddy who was already a millionaire by 20. could have bought his seaside penthouse apartment for 300k, but put it all in stocks, and then the dot-com bubble burst. guess what he's doing now? answering sales calls and making payments.