Is real estate a good investment?

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Is real estate a good investment?

Postby Lance » Fri Dec 05, 2014 11:09 pm

I'm referring to buying houses and renting them out.

A friend was telling me that he just bought a house that he plans to rent out....even though he is paying a mortgage on the condo that he lives in. His plan is to buy a few more houses eventually. He crunched the numbers and they look good on paper but there seems to be a lot of hassle involved (dealing with annoying tenants, kicking out deadbeat tenants, repairs, being on call 24/7, dealing with paperwork, etc). Has anyone here tried this? I'm wondering if is still a good long term investment. I know another guy who started in the 80s who recently got out because taxes/insurance keep going up and tenants aren't as reliable as they used to be.
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Re: Is real estate a good investment?

Postby Eddie Willers » Fri Dec 05, 2014 11:37 pm

For a percentage, you could always have a management company take care of all the BS and stress of dealing with it all.
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Re: Is real estate a good investment?

Postby mrklms » Fri Dec 05, 2014 11:45 pm

It is an OK investment. There are much better investments out there. Mr Money Moustache says it right when he said it is part of the mix of investments we all should have, but it is not easy money, it is more like running a marathon, but if you stick it out 20 years, you are home and hosed so to speak.

I have an investment property. I just went and mowed the lawns and am paying for fences. It is expensive when repairs needed and empty. It is great when the money comes in, and the loan gets smaller.
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Re: Is real estate a good investment?

Postby dazedandconfusedrp » Wed Mar 11, 2015 9:07 pm

Lance wrote:I'm referring to buying houses and renting them out.

A friend was telling me that he just bought a house that he plans to rent out....even though he is paying a mortgage on the condo that he lives in. His plan is to buy a few more houses eventually. He crunched the numbers and they look good on paper but there seems to be a lot of hassle involved (dealing with annoying tenants, kicking out deadbeat tenants, repairs, being on call 24/7, dealing with paperwork, etc). Has anyone here tried this? I'm wondering if is still a good long term investment. I know another guy who started in the 80s who recently got out because taxes/insurance keep going up and tenants aren't as reliable as they used to be.


My family invested in property and it was the best we could have done. It was my idea too :D

I'll explain some more. We had a sum of money that we had to put somewhere. Well, banks don't give you shit, the stock market is a bubble, so what option do you have?

My advice is this: Look for something that will get you a gross yield of around 8%. 5% is the minimum. If you simply get 5%, I'd bail. Yield is amount of rent money divided by price of real estate. Look for repossessed properties if you can and use a team of people to restore the place if you have to and/or can afford it. And get a property management to deal with tenants. Seriously. It's worth the money. As long as they are good. Don't be afraid to try different ones before giving it up. And there's plenty of horror stories about bad tenants but you never hear anything about the good ones cuz they don't give you any interesting stories to tell.

In the long term I definitely plan on adding 1 or 2 properties.

May be worth saying that any "property taxes" are paid by the tenant, not the landlord, in my country.

My opinion? It's the ticket to freedom.
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Re: Is real estate a good investment?

Postby Lance » Fri Mar 20, 2015 9:30 pm

Thanks for the answers. Leaning against it due to the hassle factor. Yes there is a possibility of hiring a property management company but I would imagine that they take a good chunk of profit. It might be something that I explore further down the line if the opportunity presents itself but not too crazy about taking out a mortgage. In the US, it seems that the realtors and the big boys are taking over this business. They can afford to use their # of properties as leverage when negotiating with contractors, property management firms, etc.
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Re: Is real estate a good investment?

Postby EddieS » Fri Mar 20, 2015 9:49 pm

It is if you do it right. I am 40. Have been very comfortably retired now for a few years because of real estate. I started from nothing. Real estate is a very general term. Exactly how money is made from it is incredibly diverse in method.
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Re: Is real estate a good investment?

Postby mongolking » Fri Mar 20, 2015 10:12 pm

What you get out of real estate depends on your lifestyle.

Back in my 20s I was just starting to advance in my career, and it was the career where the money was. I owned a house in a small town, and had a large mortgage on it. I could have just carried on and probably done ok - I would have had the house paid off by 40.

But I did much better by getting rid of the house and going where the well-paid work was.

For the next 15 years I moved cities 5 times, in 3 different countries. All I had to do was give notice and move. I deliberately kept my possessions minimal so that moving wasn't a hassle. I practically lived out of a suitcase. I loved the lifestyle and the job, and real estate would have been a serious pain in the arse.

By 40 I was beginning to tire of it all, and started thinking of all the things I couldn't do because I had no fixed abode I could count on. So I hummed and hawed, realised I probably wouldn't be chasing a different job again, and made a compromise - I bought a small cottage in a remote place. It didn't cost much, and if I didn't like living there, I could always go back to the city, rent an apartment and figure out what to do with it. It wasn't likely to lose money, so I could keep it as an investment, and use it as a holiday home.

It actually changed my life. Once I had a place of my own and so many interesting things to keep me busy, all I could think about was tossing in my job and getting by on my own, out here in these beautiful sticks. Threw the job in 3 years later, been here 14 years now.

None of this would have been possible if I was having to meet a monthly rent bill.

It all comes down to what you want the house for, and what other options you have for spending your time and money.
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