From the article: Real Estate Investing 101
Do you think real estate investing is wise or foolish? What are some of your experiences? What type of real estate investments do you make? Take a few seconds to share your story and thoughts with other new investors who could learn from your successes and failures. You can even share your post with your friends on Facebook if you want! Tell Us Your Story
Your First Mistake...
- In your first paragraph, you did not include rental income in your explanation. True, I pay interest, and my equity may only grow a small amount, but if I had the property rented with a cash folw, someone else paid into my equity, someone else paid the interest, and I made a monthly profit. Rental properties, bought well, are FAR better than stocks, etc... The key is buying right.
- —Guest DannyT
Bargain price
- In 1994 at the age of 26 instead of buying a single house, I bought a house with 2 fourplexes. I'm 44 now & paid it off plus the rents have about tripled in those years. I continued to work & save and recently in the bust I have bought 6 foreclosed houses. The key is to save, save ,save. Once u have acquired your first property & paid it off, than u save & buy some more. The money from the rents starts piling up, especially if you are frugal & don't mistreat your property, money & tenants. Don't b afraid that tenants won't pay you. Experience will show you that once in a blue moon, you'll pick a rotten tenant. Most tenant r good people and they just want a fair price & decent place to live. I seriously love my tenants. They have afforded me a wonderful life filled with prosperity & cash flow. I suggest to most young adults that they buy a duplex or triplex instead of a house. You can learn to manage when u do this. Be a contrarian!
- —Liquidequity
Keeps on Giving
- Real Estate purchased as an investment keeps on giving. If you buy a rental that cash flows from the day you buy it then it will only get better. Rents go up, building values go up over the longterm, and you get cash flow on a monthly basis. A lot of that cashflow is sheltered by depreciation. If you accept the $113k gain that the article describes you have a better then 20% gain on the original value of the building. Respectable. But if you only put down 20% you have better then 100% return to your wealth. Their are no accomodations in his calcs for cash flow. If you got a Cash on Cash return of 5% (pretty low) There would be an additional $50k of return that would be sheltered in large part by your depreciation paper loss. Real Estate works if it is bought as an investment at any time and as speculation some of the times.
- —Seadawg
Be a nice landlord
- I`AM A LANDLORD , I`AM A 47 YEARS OLD , AND I HAVE 2 PROPERTIES . INVESTING IN PROPERTIES IT`S THE BEST YOU CAN DO IT. BUY AND RENTING IT`S THE BEST YOU CAN DO IT TO GET A PROFIT, BUT YOU HAVE TO BE A GOOD LANDLORD TO HAVE ALL THE UNITS FULL. I LEARNED SINCE I WAS A CHILD YOU CAN NOT GET ANYTHING IF YOU NOT KNOW HOW TO USE YOUR HEAD . RENTING APARTMENTS YOU CAN GET SO MUCH MONEY BUT YOU HAVE TO WORK HONEST WITH THE TENANTS THAN YOU WILL GET MORE CLIENTS IN. BE SMART
- —Guest PORTUGUESE.
Real Estate in my IRA
- My experience has been your home shouldn't be thought of as an investment (to many emotions). But investing in real estate can have its advantages. I found you can invest real estate in your IRA. The way the market has been over the past 10 years I wanted to diversify and knew of a number of properties in my area selling well below market value. In working with a few companies, www.selfdirectediragroup.com , pensco.com and entrust.com I found I could rent a property with all income tax deferred in my IRA. I understand this type of investing might not be for everyone but it has worked great for me. It took some due diligence but for anyone with an IRA it might be worth looking into. Amy
- —amyfelix33
Reits are more my style
- I like REITs way better than property but it's because I am not cut out to be a landlord. If someone called me at 3 a.m. because the toilet broke, I'm not going to want to go fix it. I just buy blue chip REITs like iShares Cohen & Steers Realty Majors (ICF), the Canguard REIT (VNQ) and iShares Dow Jones US Real Estate (IYR). I'm exposed to the asset class, generate dividends from the properties these REITs own, and don't have to personally worry about leverage or tenants. Definitely more my style. It works for me.
- —Guest Kevin
I'm young but getting there
- Although I'm not as successful as you, Kathryn, I realize I'm only 25 and she's almost 80 so I have time. I graduated from college a couple of years ago and have been saving money since high school. Thanks to the recession, I just bought my very first rental property for $80,000. I managed to put $30,000 down and borrow the other $50,000 but it pays $650 per month in rent. (I'm in Ohio so property values are a lot cheaper than elsewhere in the country.) I can't wait to buy more real estate. There is still a lot to learn but it is exciting I think.
- —Guest James
I am retired and own property
- Although I don't know anything about stocks, I am almost 80 years old and own three rental houses plus the house I've lived in for almost 30 years. None of them has any debt because I always took the cash each month and made the highest payment I could to clear the mortgage. Now, between my properties and social security, I make about $70,000 a year without working and have $600,000 in cash in the bank on top of the properties. I never made much money in my life during my career years - women weren't paid very much back in those days - but saving and avoiding debt added up over time.
- —Guest Kathryn
