97
I think this might be an instance of "survivor bias" in that you only tend to hear from the people who were successful at it and made a lot of money off of it. Conversely you don't hear as much from the people who lost their shirt trying to flip a house or those who couldn't secure tenants at a good price.
If you're interested in the idea of passive real-...
62
What is the truth about this?
Pretty much no truth.
At 48 years old, I received an offer for a job where I was paid far more than any other employment I had previously. I chose it over two other competing job offers that were offered at a very similar time.
While I was laid off from that job, rather abruptly, I had a new job within a short time at age ...
54
Several other good answers that get into the details, but I think there are a few obvious things that need to be said here:
Real estate isn't a risk-free golden ticket - investing in real estate involves a lot of risk. It's easy to fail at it, and then you have nothing to fall back on.
Having a career with a skilled job isn't as dismal as you've made it out ...
39
The sales pitch:
A few decades ago, I had a friend that was starting out in real estate investing. He explained his reasoning like this:
Buy a starter home. Get a decent house/condo with the best rates because it is an owner occupied purchase. Live there for 5 years.
Buy another house, get some renters lined up for the first place. Renters cover the ...
38
the highest offer we could make is substantially below the asking price by around 5%.
I wouldn't necessarily call that 'substantial', especially if the property has been on the market some time (I surmise this from "sales in our local area are slow"). That you are ready to proceed also makes you a strong contender, and reduces the window of opportunity for ...
18
No. You have an overly pessimistic view of holding a job, an overly optimistic view of real estate investment, and you don't even mention other alternatives.
Sure, you could get laid off from your job. That's stressful, but it's hardly the end of your life. Get another job. If you have marketable skills, this can be quite easy. I was fired once, and I got ...
9
I get the appeal of real estate investing and it is a big part of my retirement strategy. I like owning property because it is a thing I can go and interact with, it feels more permanent and real than the numbers in my retirement/brokerage accounts.
The fact is, though, plenty of people retire happily owning no investment properties. Being prepared for ...
7
Assuming it's under English law - Scotland is different - then offers are not binding. Similarly, acceptance of offers by the seller aren't binding either. It only becomes binding when the contracts are exchanged. If you are in Scotland, then check the local law.
This means that gazumping is possible, and there's nothing you can do to stop it, other than ...
6
There is no logic to tax rules. Politicians identify a "problem" then write legislation to "fix" it. The limits are whatever could be negotiated and passed.
You could also ask why is there a capital gains exemption at all?
6
From the FHA documentation you link to, there are specific types of discrimination that are not allowed
Who Is Protected? The Fair Housing Act prohibits discrimination in
housing because of:
Race
Color
National Origin
Religion
Sex
Familial Status
Disability
You are perfectly free to negotiate harder with someone you ...
6
What is the truth about this?
Only partial truth. Investing in real estate is a bad idea for many reasons:
Houses depreciate at the same time housing market appreciates. If you buy a house that is 20 years old, 100 years from now it will be 120 years old. Probably old enough to be demolished. Housing market appreciation happens because it's the market ...
5
The thinking might be very logical; yet the usual problem is that you do not have the data to make the optimal decision: if there are other buyers and how much are they willing to offer; how quickly does the seller need the money...
The rule of thumb is that the lower your offer the more risk that it will not be accepted. Having said that:
But if we ...
5
I’d start with the Zoning Board. If your area is zoned single family, the former owners were operating against current ordinances.
If multifamily homes are permitted, I’d go to the building department for guidance on how to get the building approved. If I am wrong, they’ll send you to the right department. I suggest them as they are responsible for having ...
5
If you want to buy a house for below market price, don't fall in love with the house.
Look at many houses, and focus on those which are short-sales or distressed properties. Alternatively look for properties which have been on the market for some time and have not had many viewings, and appear to be undervalued, but which also show potential. Keep an eye ...
5
I understand where you're coming from. Our house is worth approximately $500k more than we paid for it 9 years ago, and as the market keeps rising we keep accumulating tax liability for when we sell. But we don't want to sell it, yet. Yes, this leaves us with a higher tax bill than people who are willing to move to avoid paying taxes, but not by much. You ...
4
First see what information you can gather:
Who are the people that are selling?
Why are they selling?
Is there non-monetary benefit you can give them (for example a quick sale,
longer time to move out, etc)?
Decide your target price - make sure it's not a round number. If you can meet in person, or talk on the phone do that. You can try the the 65-85-95-...
4
"Why is this positioned as the only (best) way to build wealth?"
Because it's sold and marketed that way - various parties stand to gain a lot by you investing in property - essentially they can take their slice of the pie with minimal exposure while you shoulder most of the risk. But, the success stories are real because the real estate game provides easy ...
3
The thing with property, is like any other portfolio, you ought to diversify. And most people can't afford to diversify when they start in real estate.
Real estate investments can be good. I sold an apartment that had been paid for entirely with the bank's money, whose interest and other costs had been paid by the same renters from day 1 (and who decorated!)...
3
October 2019 Update
Thanks to a risk-assessment framework introduced in 2012, the situation in 2019 has improved slightly, compared with 2011, but the presence of Japanese knotweed will still harm your chances of getting a mortgage (or may adversely affect the rate, or amount of deposit needed). However, it's not impossible, although opinion seems to be ...
3
The yield should be the amount of income divided by the amount invested. So you would subtract interest paid from your income, and add the principal to the amount invested. So it's not income since if doesn't increase your wealth, but it does increase the amount of equity that you have in the house.
That means that your yield is going to decrease over ...
3
Lenders are generally cautious about consumers that own income property which is mortgaged. This is based on the perception that such arrangements are very high risk - what happens if there's an issue with the rental property or it's mortgage that changes your finances to the point that you can no longer afford your newly-purchased primary residence? In part,...
3
This is more of a political question, so....
The exemption from capital gain taxes for a primary residence should be understood in context of the subsidization of home ownership that the US practices. The default would be for you to pay taxes on every cent in gains, but the US sees value in more people owning their own homes, and so exempts some gains as a ...
2
Mortgage lenders are interested in four main factors when considering a loan:
What is the value of the home? The home will be collateral on the loan. Lenders don't want to lend so much that they will be upside down (or even anywhere near upside down, ideally) if you default. Lenders will assess the value of the house to determine this, and compare it to the ...
2
A decent rule of thumb for this is to take 50% of the rent proceeds and compare that against the obvious costs of ownership of the home P&I, taxes, insurance, and HOA for a person that has experience as a landlord.
With the numbers you describe, you will have a mortgage of 4,300 and have 2K in revenue. You don't cite the other obvious costs, but if ...
1
One question is how long the house has been on the market. When it is first listed, sellers are often in love with the asking price. After it is on the market a while, some will soften. If you wait a while your chance of getting a given offer accepted increases. If somebody comes in with an offer higher than you can pay, you should be OK with that. The ...
1
Sorry, this isn't really an answer. I don't have time or space to enter all of my experience in investing in different ways. I have been a landlord, hated it. I got out of it at a small loss. Had one or two good tenants, had 3 bad to horrendous tenants (the last one failed to pay me, ever, and then when finally legally evicted ripped out all of the drywall, ...
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