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111 votes
Accepted

Why does Warren Buffett consider real estate as productive asset?

Real estate can be rented out (or otherwise "used"), so it "produces" income. He's not solely investing in real estate in the hopes the value increases, he's saying it's a better investment because ...
Joe's user avatar
  • 35.8k
51 votes
Accepted

Do home values typically rise and fall consistently across different price ranges?

I used to work with a team that produced a pretty accurate housing prices model so I know a little about this. There is no simple relationship between average house prices for a valuation cluster (...
MD-Tech's user avatar
  • 9,072
28 votes

Why are residential investment properties owned by non-professional investors and not large corporations?

Because the returns are not good. One of the big drivers in Australia is "negative gearing": if your investment loses money you can offset losses against your tax on other income. Institutional ...
Dale M's user avatar
  • 3,230
27 votes

Should I sell a 2nd home, or rent it out?

So here are some of the risks of renting a property: The renters damage the home or leave it in disrepair You can't find a good renter and the house goes unrented for several months The housing ...
D Stanley's user avatar
  • 138k
21 votes

Should I sell a 2nd home, or rent it out?

If it was me, I would sell the house and use the proceeds to work on/pay off the second. You don't speak to your income, but it must be pretty darn healthy to convince someone to lend you ~$809K on ...
Pete B.'s user avatar
  • 76.9k
18 votes

Do home values typically rise and fall consistently across different price ranges?

A city is multiple markets. Neighborhoods can be hot or cold depending on what things are going on around them. The type of housing stock can also act independently. If the local university adds a ...
mhoran_psprep's user avatar
16 votes
Accepted

How likely is it that a rental property can have a better ROI than stock market if I have to use a property management company?

You want a simple rule of thumb, so let's clean things up with some quick simplifications. Assume a perfectly efficient rental market, stock market, and real estate market. This means that while the ...
Grade 'Eh' Bacon's user avatar
13 votes

How much can I trust Zillow's "Zestimate" of my home's value?

I do know how Zillow's tool was developed. It is in the public domain. Zillow's tool is built to minimize the percentage error in its estimate. This has triggered a lawsuit by those who feel they ...
Dave Harris's user avatar
  • 4,277
11 votes

Why does Warren Buffett consider real estate as productive asset?

Gold is a commodity. If I have some gold, my gold is exactly the same as someone else’s gold. I have absolutely no control over the value, and when I go to sell it, my price is completely dependent on ...
Ben Miller's user avatar
  • 116k
11 votes

Why are residential investment properties owned by non-professional investors and not large corporations?

Your experience is anecdotal (outside Australia things are different). There are many companies and real estate investment trusts (REITs) that own residential properties (as well as commercial in many ...
NL - Apologize to Monica's user avatar
9 votes

Should I sell a 2nd home, or rent it out?

I kind of hate piling on with another opinion, but this is too long for a comment. I did what you are thinking of doing, I would at least try renting it for a couple years so long as: You can cover ...
Hart CO's user avatar
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9 votes
Accepted

How much can I trust Zillow's "Zestimate" of my home's value?

If you live in a community with a larger number of similar or equally built/styled houses, and there is some turnover (a sale every three months or so), it is a pretty good value estimate. If houses (...
Aganju's user avatar
  • 37.7k
9 votes

How likely is it that a rental property can have a better ROI than stock market if I have to use a property management company?

"I've toyed with buying a rental property but I'm uncertain if it's worth looking into" Don't do it*. Been there, done that, got the t-shirt. It was profitable. Arguably more profitable for ...
Jared Smith's user avatar
  • 1,857
7 votes

Is the seller of a property in the UK in a position to dictate what the buyer does with it?

"Buy-to-let only" probably means that there is currently a tenant in the property, and the vendor will not (possibly cannot) evict them prior to sale. This would mean that you would not be able to ...
AndyT's user avatar
  • 821
7 votes

How to rent a home that I own outright for maximum benefits?

I may be missing something, but I don't think you need an LLC just for the tax benefit. You can claim the interest expense as a business expense even as a "sole proprietor" for tax purposes. LLC are ...
D Stanley's user avatar
  • 138k
6 votes

Why does Warren Buffett consider real estate as productive asset?

Isn't real estate's price increase only driven by other people's demand Yes, that's what makes it productive. Productive assets, in general, have prices that are largely based on their ability to ...
Acccumulation's user avatar
6 votes

Why are residential investment properties owned by non-professional investors and not large corporations?

As other answers have pointed out, professional real estate investors do own residential investment properties. However, small residential units typically are not owned by professional real estate ...
cmanbst's user avatar
  • 161
6 votes

Why are residential investment properties owned by non-professional investors and not large corporations?

Economy of scale on one side versus "person monetizing an illliquid asset" on the other. Most multifamily rental buildings are owned by professional real estate investors (as well as individuals ...
user662852's user avatar
  • 8,409
6 votes

I have 100k in home equity. What is the best way to use this to create more money?

If you want to cash out your equity, then sell your home and buy another one that's $100k cheaper. It is a mistake to think of home equity as an asset in terms of being able to generate income. There ...
D Stanley's user avatar
  • 138k
5 votes

Should I sell a 2nd home, or rent it out?

It sounds like you plan to sell sooner or later. If your opinion is that there is still room for the housing market to grow, make your bet and sell later. The real estate market is much less liquid ...
NL - Apologize to Monica's user avatar
5 votes
Accepted

How to fairly divide a jointly owned house (not with a spouse)?

This isn't as hard as it may seem at first. You just have to think of the future loan payments in terms of what they are worth today (the loan amount is equal to the present value of the future ...
farnsy's user avatar
  • 15.1k
5 votes

Can leaving a property vacant be more beneficial than renting it out?

As a landlord myself, I can tell you that the eviction moratoriums have us all being a lot more cautious when screening potential tenants, because it is very difficult to get out of a bad tenant ...
JohnFx's user avatar
  • 53.1k
4 votes

How much can I trust Zillow's "Zestimate" of my home's value?

Zillow says: Zillow's accuracy has a median error rate of 4.3%. This means half of the home values in the area are closer than the error percentage. For example, in Seattle, Zestimate values for ...
Alex B's user avatar
  • 17.4k
4 votes

Should I sell a 2nd home, or rent it out?

One piece of information you didn't mention is how much you paid for the original home. If you hold onto that home for too long you will have to pay capital gains on the difference between sale price ...
John Wu's user avatar
  • 241
4 votes

How do I calculate the ROI for a rental property I've owned (mortgaged) for about 15 years?

If you're trying to decide whether to sell the property or continue selling it, I don't think ROI is the best measure. ROI would tell you what your return on your initial investment is, but since the ...
D Stanley's user avatar
  • 138k
4 votes

Is the seller of a property in the UK in a position to dictate what the buyer does with it?

It is possible to insert a covenant into the deeds of the property that binds the purchaser of a property, and any subsequent buyer, to do something or not to do something. That covenant can ...
Simon B's user avatar
  • 10.5k
4 votes

If I want to sell my 3 bed house in Nunhead London and buy a 2 bed flat in central London does it matter that the property market is falling?

This question should probably be closed as "too broad" but a key part of your question that needs to be answered is: "What are your goals?" Here is a small subset of goals that one ...
Pete B.'s user avatar
  • 76.9k
3 votes
Accepted

Line of credit for investment

What you are describing is called a Home Equity Line of Credit (HELOC). While the strategy you are describing is not impossible it would raise the amount of debt in your name and reduce your borrowing ...
ApplePie's user avatar
  • 2,279
3 votes

what is the best way of investment which gives returns forever?

What is the best way that I can invest money so that I can always get returns? Would it be to set up an FD in a bank, to buy land, to buy a rental house, to buy a field, or maybe to purchase gold? ...
Joe Strazzere's user avatar
3 votes

How much can I trust Zillow's "Zestimate" of my home's value?

I have worked in companies developing online property valuation software (not Zillow, and I have no knowledge of Zillow's specific tool), and I can tell you that it's mostly wildly inaccurate, and the ...
Mike Scott's user avatar
  • 23.5k

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