They raised my assesment on my crop land this year , I am pissed about it , will let it slide without contesting ,this once , they , for the first time, ever lowered assesment on two of our family homes in one county and raised it on one in an adjoining county.
How is having ownership to a business that invests directly in real estate paper ownership? You're way too comfortable throwing around the word "paper" to basically mean "an investment that I don't like because it isn't metal." I have a right to a portion of the underlying assets and the income generated from those assets. These are real houses. People have bought them. People are living in them. They aren't just pictures I drew on a piece of paper.Originally Posted by newbitech
All you have to do is look to pending home sales, construction data, and the price-to-rent ratio chart I posted above to see that real estate isn't overpriced. It's moving faster now than at any point in the last 5 years. How many indicators do I have to post before I stop encountering ridiculous claims without any backing whatsover, such as this:
What I find remarkable is that this board cannot find a single reason why ANYTHING OTHER THAN GOLD OR SILVER could go up in value. Already four pages in I've heard now that inflation will drive real estate prices down, and so will deflation. If Obama sneezes tomorrow, real estate, stocks, anything but gold and silver will go down. If Obama doesn't sneeze tomorrow, then real estate, stocks, and anything buy gold and silver will go down. There is no consistency in the thought process here with the exception that everything will be worth less tomorrow unless it is sold in a coin shop. It's borderline delusion at this point.At this point, you be better off buying wheel barrows and pitch forks so people can move their money once inflation reasserts. Right now, what real estate is doing is adjusting from damn near 30 years of inflation with a really big explosion in notional valuation in the last 10 years. This is just crazy. Unless wages catch up to the cost of financing the medium home price over the next 5-10 years, you are going to be buying into a deflating market.
cbc58, you act like I went to Home Depot, found the first guy I could with a pickup truck with a logo, and then handed him a pile of money. This isn't the case. I made an investment in a c-corp - a company - that buys and sells real estate. There's no shady behind the back buy and then offload under a different name. The properties are owned by the c corp, which has been confirmed from public listings, and data searches from investors I trust and respect. This guy has countless years of experience in real estate, and I feel much more comfortable with him calling the shots than me. Besides, he and his family have a huge portion of their net worth in this company. He's going to be as conservative as any investor would like.
"Seen this before back in the 80's when rates were low and then BAM - rates shot up to the high teens and people lost their shirts" the RE on the books is held with virtually zero leverage. The people who got burned during the 80s were people who had callable bank loans come due when S&L went under the first time. I'm not dumb enough to invest in a long-term assets with money that can be called tomorrow. Only a fool would use callable money to buy a relatively illiquid asset.
I have conviction in my investment, otherwise I wouldn't have money in it. That shouldn't be surprising. At any rate, it's not a substantial part of my net worth, and I'll wake up just as happy tomorrow if doomsday scenarios play out.
During "normal times" the historical price of real estate values have followed the rate of price inflation. That means it is a hedge against inflation. How would inflation help or hurt you if you buy a place? If prices inflate, the value of each dollar goes down. As a buyer with a fixed loan, you are paying off the loan with lower valued money- meaning in real terms, the costs are going down. If you are a renter and prices are rising, your rent will probably rise- it may or may not move up with the price inflation but your costs will be higher.
What about the costs of buying a home? Taxes? Maintaining the property? All renters are paying that. They are paying the costs of ownership for the person they are renting from- along with a bit extra in the form of profit for him or her.
The other cost is the "opportunity cost". What else would you be doing with the money you would be spending to buy property? Paying rent. What do you get for that rent? Besides a roof, nothing. What do you get for that money if you are buying? A growing share in a real asset which can be later sold if you want or need to. You are going to be spending the money- why not get something for it instead of tossing it away?
If again you get a fixed rate mortgage, your payments are fixed. They will not go up. Your rent may rise in the future and likely will. Yes- your property taxes may go up as well but also again, those are included in your rent so you can't avoid that anyways. And if you keep the place long enough, the mortgage cost can go to zero (mine just did). How much a month are you saving then? Compared to the costs of renting, I am saving tens of thousands a year now. For as long as I want to. And in exchange for the money which would have been going to rent and getting me nothing, I have an asset worth over $150,000 (at current prices- about 50% more that what I paid for it less than 14 years ago- other details will vary from person to person and location to location).
For me, there are two important parts of what I am trying to say. One- you are paying money for nothing by renting- why not get something for what you are already giving away? (and you are not avoiding any of the costs of buying if you do rent). Two- eventually the mortgage component can go to zero which is an additional bonus- the same as having a large amount saved or invested into something else. Or the same net effect as a huge raise in your income- your disposable income shoots way up. Trying to keep my expenses low is an important part of my retirement plan.
Last edited by Zippyjuan; 12-09-2012 at 06:40 PM.
Freedom is a state of mind. Nobody can take that from you unless you let them.
Demand is back at what levels?
Gold is a place that the super wealthy go. Demand for housing comes from the "common folk". These people can not buy homes without credit. Credit will be scarce. Home prices will drop(relative). During hyperinflation, "common folk" suffer. I don't envision many stories of people buying their dream home during the crisis.
If the global elite were buying up homes to store their wealth, then I might agree. Maybe beach front property in San Diego or somewhere exclusive will rise in value as people seek to preserve their wealth. But I highly doubt your regular 250k home in any town USA does so well.
With this said, I would not be against buying a home to live in while interest rates are at these level. If you know you will be in the home many years, it is better than renting.
That's me! Not on the beach but about a mile inland in San Diego.If the global elite were buying up homes to store their wealth, then I might agree. Maybe beach front property in San Diego or somewhere exclusive will rise in value as people seek to preserve their wealth. But I highly doubt your regular 250k home in any town USA does so well.
Freedom is a state of mind. Nobody can take that from you unless you let them.
I guess I should have used the term "rising interest rate environment" instead of inflation because the econ police are here. Truth is that if interest rates were allowed to float on their own without the fed playing around with them - housing values would not have gone up nearly as much as they did. Mark all properties to market and let's see how everyones property value is without the massive intervention that has occurred over the last 30 years or so. I don't need to argue this with anyone here - been in real estate for 25 years and know what happens in the real world -- thank you very much.
And... it makes sense to rent in many circumstances - there is no one size fits all. I am seeing houses that I sold 20 years ago sell for LESS than I sold them for - and they are not foreclosures or distress sales.
Nice
Well with the way I envision CA reacting to the coming crisis, I don't know if it would be THE BEST place to be.
Last edited by cubical; 12-09-2012 at 08:43 PM.
There are always worse places- no matter what you are doing. It is really not a bad place. The climate also helps keep my bills low- I do have homeowners fees for my condo which include my water but my utility bill is about $35 a month year round. Living right near work and the grocery store- no car needed either. Again saving tons of money (and commute time!). Got a nice little spot going on here!
Freedom is a state of mind. Nobody can take that from you unless you let them.
Another thing to consider when buying property for an investment, assuming you are renting it, is the potential legal costs. I am currently renting in CT and my landlord is being sued be the previous tenant because they fell down the stairs and the stairs were not "up to code". I am sure it is costing my landlord thousands just to defend himself. If they lose, thousands more.
Question for anyone in the know(as I would one day like to get into real estate), is the building code for residential property similar to the tax code. By that I mean is it so complex that you are always at risk of being sued for not being up to code. Also, if I was to sell a property, could the buyer come back to me after the sale is completed and sue me for some building code violation?
You looked at going solar?
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