Excellent Real Estate Article!
I have been saying for years that houses are a bad investment, this aricle is pretty good and covers a lot more than that.
http://patrick.net/housing/crash.html
http://patrick.net/housing/crash.html
0
-
depends on the market... some are bad, while others are growing steady 0 -
If a person really wants something, he or she will find a way to obtain it. That's my reasoning, and that's how I bought my first house when I was 24. So far, in a little over 4 years, it's doubled in value. I disagree with the article, as I would rather pay a mortgage and have something to show for it than throw my money at someone else's mortgage. [;)] 0 -
"Excellent real estate article", hmmm...
I don't know...that's like saying "enjoyable rectal exam".
[:0]0 -
I don't know. It all depends on the market area. I've seen a steady 20% increase per year on the real estate I have bought. That is just a little more than the fund I have invested in has been making.
You invest how you want and I'll take my 20%.0 -
Wow, what an eye opener. We paid 58K for this place in 1991. Just paid it off in Sept. of '06. This place should sell right now for 160K-169K, and would sell overnight for 149K. We could not afford to buy this place today. 0 -
One important point here has to do with foreclosures. If bankers lose enough money, they will require the buyers to put more money down, and such might cause a downturn in home values. 0 -
lets see, i bought my house in 2000 for $418,000 and I sold it last month for $805,000. I guess real estate IS a bad investment. I just wonder what I am going to do with my extra cash laying around. 0 -
quote:Originally posted by newtgingrich
I just wonder what I am going to do with my extra cash laying around.
I'd be glad to help you with that lil problem.[;)][8D]0 -
The writer and all who would believe what he is spewing are idiots. 0 -
There is a record number of foreclosures happening today, because lenders got slack by giving mortgages to people who were not really qualified, many times requiring no money down!
So a slump in the market will probably happen.
My fiancee bought a house in 1990 for $150K.
She sold it two years ago for $530K.
She thinks real estate is a pretty good investment.0 -
most people dont know what foreclosure means. there are many stages of foreclosure. i had my home go into foreclosure because i was careless and i missed 3 payments. however, i paid a $1000 fine and the back payments and everything was fixed. the media and most people think if a home is on a foreclosure list that it is being reposessed and defaulted on. actually less than %20 of homes that go into foreclosure are actually closed on. 0 -
I emailed a few things to the author. He was receptive and not at all rude in his response. He should have added that he is talking about one particular area and not the entire US. Still quite a bit of his information was way off, but since I am not familiar with the housing prices in the market he was talking about I can not say if all the information is bad. 0 -
quote:Originally posted by Alpine
I don't know. It all depends on the market area. I've seen a steady 20% increase per year on the real estate I have bought. That is just a little more than the fund I have invested in has been making.
You invest how you want and I'll take my 20%.
Many people miss the big picture. With the 20% increase in the real estate you own, that 20% is on the total value of the real estate. Yet you probably only had to pay a small percentage of that "total value" when you purchase the real estate.
Regarding the fund you invested in, for every 20% increase, that increase can only occur on money you have actually paid into the fund.
In other words, say someone buys a $100,000.00 house by putting only $20,000.00 for a down payment, rents out the house and thereby gets the monthly payment covered. Say the house increases in value the first year by the 20% you mentioned. That means a $20,000.00 "profit" on the house. But you only orginally had to fork over $20,000.00 cash to purchase that house.
Had you instead forked over $100,000.00 cash to invest in the fund you mentioned, and say it increased by the same 20%, your increase would have still been the $20,000.00. But in that case you would have had to come up with the full $100,000.00 as compared to only coming up with $20,000.00 in the case of the rental house.0 -
Tr - perfect point. 0 -
TR--- exactly why real estate is not a bad investment if sone properly. 0 -
A very quick scan of the article, so I apologize if he mentioned this: While he's right that more houses are always being built, he does not seem to take location into account. My house is a major metropolitan area will have much more value and will hold that value than a house 50 miles outside of that area. And in the area I am in, there really is no more space to build. It's fill in development only, and there's very little of that. In other words, there's a limit to the number of houses, and that limit has almost been reached. New homes are not going to devalue my home.
Oh, and he doesn't mention something else that happened to me while I was renting. I came home and pushed the button on the answering machine and heard, "Hi, it's the property management company. The ownwer would like to sell and needs you out by the end of the month (that was 17 days away, and we still had 4 months left on the lease.)" Now, the next message was the property company calling again and telling me sorry, they called the wrong number, but right then I decided never again.
And finally, this fellow is trying to refute one of the oldest financial rules in the book, that buying a home and paying it off is the road to financial well being. People, very smart people, have been saying that for years and years.0 -
I am on my fourth house. I lost money on the first three, and will probably lose money on this one, if I don't die in it. I would have been MUCH better off in the long run to have put my down payments into a good mutual fund and lived in rented houses. 0 -
Timing, location, and the right deal, can make you money.
For some locations.
If your selling, you already missed the best time.
It's "not quite" time to buy. [;)]0 -
You can buy 3-4 bedroom homes in Pittsburgh and Detroit for way less than $10k. They are almost giving them away and nobody is taking them. They could not PAY ME to accept a home there. It just appears many think the same thing.
I thought it was a housing market crash but then realized it was American's actually....moving away from Communist controlled areas.0 -
Tr: I'll let you know I'm about to sell a house that I bought about 10 years ago. I will clear a lot, and not have to pay any capital gains, according to my CPA.
Real estate all depends on the market, and the area. The fund I can take money out anytime, but real estate takes planning and time.0 -
quote:Originally posted by newtgingrich
lets see, i bought my house in 2000 for $418,000 and I sold it last month for $805,000. I guess real estate IS a bad investment. I just wonder what I am going to do with my extra cash laying around.
and the baloney continues - sure you sold your house for 805K - i sold mine for 3 million dollars and bought a new one on the moon - all i need now is another 10 million for my rocket ship to fly there0 -
The down side is the sub prime lenders, loaning 125%, to very marginal credit people.
Then topped off with the variable intrest rates and increases in insurance coverage for the coastal states.
Takes a good portion of the U.S. population out of the home marketplace.
My daughter included.0
Please sign in to leave a comment.
Comments
22 comments