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re: Real estate or stock market?
Posted on 2/21/15 at 9:08 am to Iowa Golfer
Posted on 2/21/15 at 9:08 am to Iowa Golfer
quote:
Real estate is no different than actively managing your equity, or actively trading it. It is like a business, or career. One succeeds if they work both smarter and harder.
This. I've been very successful the last 6 years actively trading. I spend 1 to 2 hours a day and sometimes more on the weekend studying charts (I spend most of my time here), investigating market fundamentals, reading Central Bank meeting notes, etc.
The stock market is similar to real estate in the fact that one gets out of it what they put into it. Dumping money in a mutual fund won't give as good as a return as putting in time and effort with trading/investing. In real estate I'd imagine that things such as small repairs, doing the yard maintenance, being good at choosing tenants, picking properties in the good areas, etc dramatically improves returns.
0
Posted on 2/21/15 at 9:15 am to Iowa Golfer
quote:
equity in my business
What kind of business are you in, if you can say without outing yourself?
This post was edited on 2/21/15 at 9:16 am
Posted on 2/21/15 at 11:32 am to Early Riser
The choice is yours. I gave you info to try to help you although you still didn't answer all the questions. Maybe you can't or don't understand. Either way once you decide what it is you are after like I've listed in the earlier questions then you can decide which vehicle or vehicleS to use to get you there. You're welcome. Good luck.
This post was edited on 2/21/15 at 11:45 am
Posted on 2/21/15 at 12:22 pm to Fat Bastard
I motion that yall should start a RE discussion thread if that is something that interests all of you. I'd like to read it for one.
Posted on 2/21/15 at 1:46 pm to I Love Bama
quote:A lot of that is simply where you are.
I somewhat disagree. I think investing in real estate is idiot proof. The math is basic. You have a checklist of things to follow and if you check everything off, your returns can be astronomically higher than the stock market.
Exhibit A. : My current project is a four bedroom house in fair condition. I purchased it for $18,000. I'll be putting about $5,000 into it and renting it for $700 a month (already have tenant waiting).
I didn't even have to look hard for this deal. It was on the MLS. $23,000 purchase for a $35,000 asset. When repairs are done, it will be generating a gross revenue stream of $8,400 per year.
Not a hypothetical....this is reality. I plan on doing 20 more just like it.
(tangent) Those links posted earlier by someone else aren't helpful at all. It's pro real estate propaganda without any meaningful corroborating information.
I would like to get into buying and renting property, but I would like to shadow someone that knows what they're doing before I sink any sort of substantial money into it. Additionally at 23 y/o, I'm "geographically mobile" for work and don't want to be stuck with long distance rental management. With plenty of time available beyond my full time job & a substantial head start with retirement thanks to early education from my parents, I'll have plenty of available cash beyond 401k match max, Roth IRA max, and additional brokerage account contributions.
This post was edited on 2/21/15 at 3:35 pm
Posted on 2/21/15 at 4:24 pm to Louie T
In long run the invest and leave it alone produces same yields on average as the daily trader due to fees. By the time you get the news the market already accounted for the news.
Posted on 2/21/15 at 5:18 pm to Louie T
Lmao
If you paid attention to the original questions posed by the op there is plenty of valuable info in those links. Nobody here promised to post links that took you by the hand. The links state facts and show how the numbers can workout so he can see the possibilities. I'm actually using a similar system. You wanna dabble in RE? You will have to educate yourself like on any other investment. You want hands on help? Sign up for workshops on that site. They have mentors Also. Take action. Be a mover and shaker. How bad do you want it??
If you paid attention to the original questions posed by the op there is plenty of valuable info in those links. Nobody here promised to post links that took you by the hand. The links state facts and show how the numbers can workout so he can see the possibilities. I'm actually using a similar system. You wanna dabble in RE? You will have to educate yourself like on any other investment. You want hands on help? Sign up for workshops on that site. They have mentors Also. Take action. Be a mover and shaker. How bad do you want it??
Posted on 2/21/15 at 5:56 pm to Lsujacket66
quote:
you can do better in the stock market... the issue though is all you own is a piece of paper
The same is true in real estate. Having title to a property is nothing more than having the ability to claim in a courtroom that you own something, just like a stock certificate.
And when I say that "you own something", what I really mean is that the government promised to honor your original investment. You are merely appealing to superior firepower in either case.
Posted on 2/21/15 at 5:59 pm to Fat Bastard
Simmer down. I don't need the salesman act or you preaching about hard work or due diligence.
The links aren't very helpful. They paint an extremely slanted viewpoint.
The links aren't very helpful. They paint an extremely slanted viewpoint.
Posted on 2/21/15 at 6:23 pm to Fat Bastard
quote:
Lmao
If you paid attention to the original questions posed by the op there is plenty of valuable info in those links. Nobody here promised to post links that took you by the hand. The links state facts and show how the numbers can workout so he can see the possibilities. I'm actually using a similar system. You wanna dabble in RE? You will have to educate yourself like on any other investment. You want hands on help? Sign up for workshops on that site. They have mentors Also. Take action. Be a mover and shaker. How bad do you want it??
I agree with him, I expected more when I opened those and it was a very disappointing read.
Posted on 2/21/15 at 7:55 pm to Louie T
He is way too emotionally attached to the concept.
Obviously real estate and stocks are too very different investment vehicles. Stocks themselves are innately a very diverse asset class. Some are cash flow yielding while others strictly reinvest cash flow. Some even translate to different tax implications (ie, MLPs and REITs which could loosely be included in the category of stocks). To compare and contrast something like AMZN with owning a couple of condo units is dumb.
The premise of the OP was pretty simplistic but to come in here all guns a-blazing asking people if they can handle the challenge is asinine.
Obviously real estate and stocks are too very different investment vehicles. Stocks themselves are innately a very diverse asset class. Some are cash flow yielding while others strictly reinvest cash flow. Some even translate to different tax implications (ie, MLPs and REITs which could loosely be included in the category of stocks). To compare and contrast something like AMZN with owning a couple of condo units is dumb.
The premise of the OP was pretty simplistic but to come in here all guns a-blazing asking people if they can handle the challenge is asinine.
Posted on 2/21/15 at 8:36 pm to I Love Bama
quote:
Exhibit A. : My current project is a four bedroom house in fair condition. I purchased it for $18,000. I'll be putting about $5,000 into it and renting it for $700 a month (already have tenant waiting).
I just cannot fathom these numbers without thinking the place is listed in the Middle East were risk of death is high. lol
Houses for 50K were I live look like there is a "thug" only requirement for these neighborhoods.
Posted on 2/21/15 at 9:13 pm to I Love Bama
quote:
I purchased it for $18,000.
Posted on 2/22/15 at 7:42 am to castorinho
A balanced portfolio includes real property. I'd maintain real property outside your primary residence.
It could be farmland, timber land, etc. It could be resort property. It could be a warehouse. You could probably throw REITs in to this as well, although that's debatable. The entry point is a discussion on its own. The how to do it is as well.
All investments are similar. You get out of them what you put in to them. Mostly.
It could be farmland, timber land, etc. It could be resort property. It could be a warehouse. You could probably throw REITs in to this as well, although that's debatable. The entry point is a discussion on its own. The how to do it is as well.
All investments are similar. You get out of them what you put in to them. Mostly.
Posted on 2/22/15 at 6:33 pm to Fat Bastard
quote:
I'm still doing fine even after the depreciation recapture tax i'm hit with after a sale. Eschewing depreciation is a huge mistake.
Uhhh, you eschew something the IRS mandates, like annual rental property depreciation, they will come knocking soon enough. The noncash depreciation expense is helping drive your current cash flow/tax reduction annually, and some people who sell have no desire to buy more property, so an exchange doesn't matter to them. When someone sells for a profit the recapture absolutely drives their taxes and likely marginal rate up.
quote:
really? well so far my RE returns are blowing my dividend paying stock returns out the water. Maybe what's a hassle for you isn't for me? So you telling me you would prefer a dividend paying stock paying 4% versus what i laid out earlier? with 20k invested into each? really? That makes absolutely zero sense. ZERO! That's one of the theoretical points i was making to the OP. as a matter of fact my cashflow return rate is maybe better than his possible capital gains as well.
I don't focus on the supposedly magical dividend paying stocks. I may own some, but total return is a better long term way of looking at it. There is a reason you have likely seen better returns in RE vs equities as RE has taken much longer to recover and bargains have been available. The aggregate RE market where I live is not back to 2008 levels yet. There are still considerable upfront transaction cost to buy/sell RE as well, that seems to have been glossed over, compared to, say, free equity trades that I can make at the push of a keyboard button. I own residential and commercial RE, but I am not myopic about it nor consider it superior to other assets I own. Long term - remember, this is not just the few years you may have been buying property when bargain deals were readily available - real returns net of inflation have significantly favored stocks. People should invest in assets they have researched, are knowledgeable of, and understand the risks whatever they may be, but if I am a person with limited assets I don't think buying something with high transaction costs and could be illiquid would be top on the list.
Posted on 2/22/15 at 6:40 pm to I Love Bama
quote:
Exhibit A. : My current project is a four bedroom house in fair condition. I purchased it for $18,000.
Incredible. That's about what it costs to buy a fricking parking space here.
Posted on 2/22/15 at 7:17 pm to tirebiter
I think all you peasants not making money hand over fist in real estate just don't want it enough. You all should just stick to the stock market and its barely better than inflationary returns.
Posted on 2/22/15 at 9:30 pm to Louie T
Posted on 2/23/15 at 8:38 am to JayDeerTay84
quote:
Houses for 50K were I live look like there is a "thug" only requirement for these neighborhoods.
Same here. But that is just how some people like to get into the RE investment stuff. We just put a bid on our first RE investment property. $95K for a 4 bedroom/2.5 bath house, turn key, that will rent for around $1,400/ month. We will not cash flow like him but our property will in a great area and we will always have a decent renter pool to choose from.
I have run the numbers on all different size/priced properties and this just happens to be where we are comfortable. I am really excited about my first deal too. Should find out something by the end of the day.
This post was edited on 2/23/15 at 8:40 am
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