Real estate investments

[graceshen]

I’ve dabbled in real estate investments and can share a bit from my experience. If you're considering international options, I'd highly recommend looking intoDubai real estate ***SERIAL LINK SPAMMER LINK REMOVED***. A few years ago, I bought a small apartment there, and it's been a fantastic investment. The market is vibrant, and there’s a strong demand for rentals, especially from expats.

I did a lot of research and found some really helpful tips on sandytimes.ae, which guided me through the process. Each country has its pros and cons, but Dubai stood out to me because of its growth potential and relatively straightforward property laws.

 

[T J Tutor]

Everyone should have some real estate in their own country, at least 10% of a persons portfolio. Foreign real estate investments can be a tricky thing and some countries are preferred over others.

 

[azgold]

Everyone should have some real estate in their own country

A ton of people are dumping theirs here, or at least trying to. Lots for sale now because the government is going to raise the capital gains tax from 50% to 66.7% as of June 25th. The first $250,000 will still be taxed at 50%, anything over that is just under 67%. The government will get more than the people who made the investment, or the kids who inherit their parents' home, cottage, whatever. Same goes for investments, selling a business, etc. Capital gains.

We're losing a lot of doctors because of it. They don't have a pension, they were told to set up their businesses as an LLC to sell at retirement, so many are trying to sell fast now and move out of the country. I imagine they're going stateside.

 

[T J Tutor]

Capital gains are treated very differently here. Capital gains are only due for gains in excess of $250k for singles and over $500k for married couples. Of course, they only due if the earnings are not re-invested into another form of capital investment. There are loads of other exceptions as well as in IRA's and such. These carry deferred income tax and no capital gains. There are many other exceptions as well.

At present, real estate around the world has many trying to sell, but most because they need to upgrade or relocate. The issues in most markets at present are due to higher mortgage rates. Just a single point can raise a monthly payment by thousands in some cases. Everyone in the states got very comfortable with 2% and 3% rates in recent years and now they are easily double that. I remember the late '70's and 80's when rates were in the 16% to 18% range. Everyone today need to look at the history of rates before they complain too much about today's rates.

Rates aside, real estate as an investment is still a very good option. It's just that most people have to make it work with a mortgage which always complicates it. You see, as an investment, it should not be sold, but added to your portfolio. Everyone should buy some real estate and do whatever they can to own investment real estate free and clear as a long term plan. I have some investment real estate. All started with mortgages, all are paid off years ago. This is the goal of real estate investments. They typically manage breakeven roles through their mortgage years, while increasing in value and bring higher incomes year after year and then after the mortgage they bring unencumbered income aside from normal operating costs. Typically a safer and higher return than retirement accounts.

 

[azgold]

Yeah, mortgage rates have risen dramatically here, I imagine they have everywhere.

I don't know why exactly that people who rushed to buy and paid $300,000 or more over asking for a house when mortgage rates were historically low didn't realize that it was the start of a housing bubble. A replay of 2008 in the States. Unfortunately, the defaults have been rising, according to what I've read. The Bank of Canada has issued a potential financial crisis warning because of defaulted loans, I heard yesterday. I think there are people who are already experiencing their own crises.

Just a single point can raise a monthly payment by thousands in some cases.

Yup, some people are upside down on their payments now, sadly.

I remember the late '70's and 80's when rates were in the 16% to 18% range.

My ex-husband and I were looking to buy a house, late 80's. Rates were at 19+%, so we held off for a while but got a big 4 bedroom on 3/4 of an acre with a creek at the back for $55,000. Ah, the good old days of cheap real estate.

Everyone should buy some real estate and do whatever they can to own investment real estate free and clear as a long term plan.

I think you're right. There's a mortgage guy here who advises people not to sell, to just hang onto it. Avoid the tax and wait out a new government to get rid of the increase. The guy's quite p.o.'d about it. Some boomers intended to sell their homes and/or cottages to fund their retirement.

I know of a couple of people who live in what was the country, with beautifully peaceful and large acreage. Now starting to being encrouched by industry and busier roads but that was inevitable, happening everywhere. Anyway, one of them was offered a million dollars for a large swath of his property for development. That's been happening in our area due to the open land. I'm personally sorry to see it happen, I like open land. But apparently people like to have a place to live.

Rates aside, real estate as an investment is still a very good option.

I'm sure you're right!

 

[Graybeard]

I don't think of owning a home in terms of investment really --owning your home means stability in living --monkey needs a home. You are no longer a tenant with only limited rights to your living space and subject to many petty rules of the Landlord. As an investment real estate is only worth what you can get for it when, and if, you can sell it. Also, people need to understand the ongoing expenses of buying and then eventually owning a property.

When you add your purchase price, interest on any loans, property taxes, property insurance, needed maintenance as well as desired improvements --your purchase price can double over 15 or 20 years of ownership.

Maybe I paid, $100K in 1994 and now the house is assessed at $300K a 200% gain.
However, the NASDAQ (tech stocks US ) gained a whopping 1600% and was always immediately liquid at market price. That has had a much better return as an investment over the past 30 years.

So, by all means buy a residential property to live in and maybe a vacation home. You need a home on your terms with few financial variables. Your rent does not keep going up --but other expenses will vary.

If you want to buy and flip properties you really have to know what you are doing. Buy and hold can work but its a very long term strategy with tax-shelter income that can change with new government rules without any long term notice.

 

[T J Tutor]

As an investment real estate is only worth what you can get for it when, and if, you can sell it.

Well, I have to disagree. The income of my investment properties has immensely exceeded the cost of ownership over the years. Taxes are deductible on all properties and maintenance is deductible on income properties in my portfolio.

 

[Graybeard]

What property did you gain 1600% on in 30 years like the NASDAQ index did in 30 years? With equities no taxes are due every year, no insurance, no maintenance, no added expense when the rental is vacant -- only capital gains tax when you sell a holding and income tax on the dividends --preferential treatment on qualified dividends.

Real estate is not for me now. REIT's maybe but I favor mREIT's for income --I get my piece of the mortgage payment interest (or of the right to that income). Asset value is always a risk with either. In 2010 properties lost 30% or so of their market value --stock market did similar.

 

[caiclo]

Thanks for sharing that's really resourceful.

 

[T J Tutor]

What property did you gain 1600% on in 30 years like the NASDAQ index did in 30 years?

I didn't say I had a 1600% property value gain. I said "The income of my investment properties has immensely exceeded the cost of ownership over the years." For example, On one of my rentals that i bought for $12k in 1976, I paid off in 15 years with a bi-monthly (every two weeks) mortgage. It is 9 blocks of the campus of S.U. and brings in over $3k a month in rents today. Another I have is a small retail strip I bought in 1980 for $63k on a 30 yr. fixed at 15%, refinanced 5 years later at 11% and paid off 1994. Each of the 5 units in the strip are 2200 sq ft and bring $2600 per mo. each. My rental rates have dramatically increased on all of my investment properties and all of them are free and clear.

No matter how you cut it, I have prospered immensely from my real estate investment portfolio. You stated "As an investment real estate is only worth what you can get for it when, and if, you can sell it." and I stated I had to disagree with you because you were telling me it was only worth what I get when selling it and I was letting you know I disagree with that statement because I have benefitted from their worth immensely by keeping them in my portfolio, not selling them, and keeping them occupied with renters for all of these years. The income is immense and easy to maintain and increases year after year.

 

[Graybeard]

Well I see. But you cannot buy houses for $12k to use as rentals today.
So what is the point? I doubt that you can buy good residential rental property today at 14 X gross. It's tough to find a deal on rental property that shows better income than an HYSA or MMA,

I bought RMR this year, they manage REIT owned properties, billions of dollars of properties, I am happy with my 7.7386%
They do the work. If the rent goes up I see any net return. If the cost of funds goes down (interest rates) the stock's value should appreciate go up to reflect the current alternatives (dividends or MMA, etc). That is my rental income --my real estate investment activity --I just collect the checks ... I am an equity owner in a organization. Either way you pay income taxes on the net return to you.

I have no interest on any hands-on type investments --but that is me.

The closing price for International Business Machines (IBM) in 1976 was $4.19, on December 31, 1976. It was up 28.3% for the year. The latest price is $170.89. That is 40.8 times appreciation today. I was too busy in 1976 flimflaming away in the Hollywood Hills, driving a late model Lincoln, doing discos, getting loaded and chasing girls. Wish I had bought IBM stock. Surly I could have afforded a few hundred shares --But I got me some wild memories

 

[T J Tutor]

So what is the point?

The point is exactly what I keep stating, a long term portfolio. If you can't see the point in maintaining properties for rental until they are free and clear to enjoy the state of earnings that come with that, I don't know what else to say. I earn big from the real property side of my portfolio, that's the point.

But you cannot buy houses for $12k to use as rentals today.

No, but I wasn't earning more than the mortgage payments when I bought it, I was breaking even. I starting earning when rents began out-pacing the mortgage, and then earnings became significant when the mortgages got paid off.

The same thing can happen for anyone starting today. In the years to come they'll experience the same long term benefits.

Precious metals and real estate make up the majority of my portfolio. I earn from the real estate (and my content sites) for a very comfortable life. The precious metals are a safe guard. I place about 25% of "post" earnings now in my LPL Financial accounts and the balance into the metals (vaulted).

Everyone "rings their bells" in different ways my friend. What I do may not be the path for you. We all do things a little different from one another.

 

[Graybeard]

I am more concerned with instant liquidity.
And real passive income --not having to work (anymore)
I worked for a while running over 70 rental as well as rehab and sell properties --it was a real pain in the ass but lucrative. It was a job.

 

[graceshen]

Real estate investments are worth considering. One option to explore is cash house buyers ***SERIAL LINK SPAMMER LINK REMOVED***. They streamline the process, making transactions quick and hassle-free compared to traditional buyers. You might find good deals with them too. However, it's essential to research thoroughly to ensure it aligns with your goals and financial situation. By taking your time and weighing your options, you can make informed decisions that align with your investment goals.

 

[RassenDe]

I've been following the thread and it's awesome seeing all the different takes on the best ways to invest in real estate.

Personally, I've had some good luck with a mix of both residential and commercial properties. I think the key is to diversify and not put all your eggs in one basket. Also, don't overlook those up-and-coming neighborhoods – they can be real gold mines if you get in at the right time.

* Edited by Admin *