09-13-2017, 07:01 AM | #111 |
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Just like with the stock market, real estate market has ups and downs. Honestly I think banks do not want people to own property and would rather become landlords with a steady monthly income stream vs having to deal with the real estate market variations. Wouldn’t you like to be paid regardless of what the market does and have the ability to upwardly adjust rents at least annually? That makes shareholders happy.
It’s far better to own rather than rent and hedge your bets. Just like the stock market, housing prices rebound and will still continue to be a good addition to your investment portfolio. Timing is of course important but I do not foresee a crash like we had in 2008, maybe a flattening or a slightl correction. You just have to look for the values. Plus like precious metals, it is a tangible asset. Paper money is increasingly becoming electronic and far less tangible and more likely to vanish in the case of a crisis. |
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09-13-2017, 07:07 AM | #112 | |
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09-13-2017, 07:19 AM | #113 | |
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I have two homes which I rent. Initially wasn’t by design but I am cash flow positive by several hundred per month. I continue to pay my properties down and increase equity thanks to the renters. |
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09-13-2017, 10:19 AM | #114 | |
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Finally got the nerve to bite the bullet last year even though we knew the market was hot (at least interest rates are low) and luckily has paid off so far. The commute is not good for her (Mtn View, about 45-50min each way to go 15mi) but good for me and we love our townhouse. The area is okay - certainly not the idyllic NorCal town but good schools, fairly safe, and good Asian food After tax advantages and principal paydowns, we're paying about the same for our new 3/3 townhouse as we were for an old 1-bd apartment in Sunnyvale. But yeah, local traffic is bad, and I'm afraid it will get much worse. We wait 5-10min just to get onto Montague Expressway each morning, though I have a back way I can take. Hopefully we can live here long enough to see the area development happen and then bounce with a healthy gain. The problem is, anywhere we bounce to is going to cost 50%++ for the same home and worse schools. |
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09-13-2017, 05:51 PM | #115 |
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Now this is ridiculous: $782,000 over asking for a house in Sunnyvale...
http://www.mercurynews.com/2017/09/1...-in-sunnyvale/
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09-13-2017, 06:00 PM | #116 | |
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09-13-2017, 07:03 PM | #117 | |
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I recently met a family that just moved into a house but are hoping to rent out their original property. They won't sell because they are underwater on it. Knowing that area, if there mortgage is what I think it is.....holy crap.....they'll never get that in rent. Even if they do, the property taxes are high so they'll still be eating that + the association fee + maintenance + insurance......all that in addition to the new house.
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09-13-2017, 10:13 PM | #118 |
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Renting at least helps defray the cost, even if you’re underwater. And you can structure deprecation costs, maintenance etc depending on how you treat the property at tax time. It won’t get you to zero loss but helps close the gap vs selling and losing your ass. Plus your paying it down with someone’s money and if the market does recover you have some profit.
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09-13-2017, 10:36 PM | #119 |
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Call me strange but I never looked at my house where I primarily live as an investment first. To me first and foremost, it's a place to live that's "mine". Only secondarily do I look at it as an investment. I think for many people the idea of looking at their primary residence as some investment or piggy bank gets them in trouble. Don't get me wrong, I'm not condoning a foolish purchase where you severely overpay. But let's be frank here. For many Americans their home purchase is their main means of having a roof over their heads.
If you're not paying rent, you're paying a mortgage. Even if you're underwater on your house, at least your payments will build up your equity stake in your house; assuming it's not an interest only loan. If you rent, all of your money goes towards paying someone else's mortgage payment. It's amazing many people get bent out of shape about being underwater with a house but won't flinch when buying cars where you're guaranteed to be losing money. |
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12-10-2017, 11:12 PM | #120 |
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Bumping this. Went to look at a house in a dream area today. House is old: built in 1951, 1,400 sq ft, everything inside was pretty dated. Definitely needs to be remodeled, roof needs replacing, termite inspection and possibly replacing some parts. Thinking it’d cost $100k-150k to do all that stuff. Asking price? $1.2M. Might end up going over list.
Definitely going to need a correction because at those prices, my dream to live in that area might be out of reach (at least for now). |
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12-11-2017, 02:29 PM | #121 | |
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12-11-2017, 02:33 PM | #122 |
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There might not be a crash, but a correction, no doubt. I know where I live (and subsequently did RE for a bit), prices are blown way out of the water for the houses.
Real estate, for the most part, seems to be something that usually follows inflation. If it is above inflation, there will usually be a correction down the road.
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12-11-2017, 09:18 PM | #123 | |
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12-12-2017, 01:13 PM | #124 |
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I think the Bay Area is an exception to the rule, even during the 2008 market crash the housing prices did not dip, at least not in the North Bay or SF. I agree a correction is absolutely necessary but the demand is constant and that doesn't provide any relief.
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12-12-2017, 02:19 PM | #125 | |
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12-12-2017, 09:53 PM | #126 | |
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12-12-2017, 10:00 PM | #127 | ||
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12-13-2017, 03:24 AM | #128 | |
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What really sucks is the new tax reform changing the amount of time you have to live in a home to avoid capital gains tax, from two years to five. Unfair to people like us who bought with the understanding that we could opt to move in 3-4 years without paying five figures in taxes. Now we feel like we're stuck here through the end of 2021.
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12-13-2017, 10:30 AM | #129 | |
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12-13-2017, 11:17 AM | #130 |
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I headd about the mandatory law stating that you must not rent out the house in the first few years of ownership. A lot of people buy homes and leave them empty for a few years before renting them out. It’s happening all over the Bay Area.
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12-13-2017, 01:30 PM | #131 | |
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If you purchase a home and finance it as an investment property, there would be no issue renting it out right away. Financing the home as a "primary residence" comes with a lower interest rate (less risk) than buying it as an "investment" property (higher risk).
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12-13-2017, 01:47 PM | #132 |
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Yep. Will take effect with the new tax plan unless it is taken out, which I doubt since it was in both the House and Senate plans. And from what little I've been able to find on this, there will be no grandfathering. Really blows because we were thinking about moving out of the Bay area sometime soon but now we have to wait a lot longer.
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