Owning real estate in America = Overrated?

[Taco]

Home prices went up for over a hundred years but US home prices crashed in 2008 and have not recovered.

US Home Price Index
http://observationsandnotes.blogspot.ca ... -1900.html

[momopi]

But how come so many Chinese people have made lots of money in real estate? Ask Momopi about it. I'm sure if you buy low and sell high and are good at it, you can make a fortune in real estate.

You can also get rich in the stock market, in commodities, or any other speculative venture by "buying low and selling high." The problem is do you know what "low" is relative to the broader market or what the future trend is?
Maybe you should consult that dude who can move glass bowls with his mind on youtube for the answers you seek.

From cash-flow perspective, buy low is buying when it's cheaper to buy than rent.

[Repatriate]

But how come so many Chinese people have made lots of money in real estate? Ask Momopi about it. I'm sure if you buy low and sell high and are good at it, you can make a fortune in real estate.

You can also get rich in the stock market, in commodities, or any other speculative venture by "buying low and selling high." The problem is do you know what "low" is relative to the broader market or what the future trend is?
Maybe you should consult that dude who can move glass bowls with his mind on youtube for the answers you seek.

From cash-flow perspective, buy low is buying when it's cheaper to buy than rent.

Do you mean the price/rent ratio?

There are many cities where it's technically cheaper to buy than rent on paper but there's very little in the way of appreciation plus high property taxes eat into yield. Texas is like this..

[tom]

Real estate, that is the personal home owner kind, is a rigged market in the USA.
The risk to lenders is covered effectively by an insurance which is heavily subsidized by the US government.
Defaulting on these loans is not as easy as it was recently but still because of the subsidies easy. (because of this a lot of fraud has been common)

In family court if you are one of the half of men that end up there, you will likely loose money invested and any gains. Effectively this makes it a high risk investment. Especially if you are making this your main savings investment. You just don't want to bet the farm on an investment with a 50% chance of total loss. You can make out ok if you do not get divorced and wind up in front of a feminist thinking judge. This makes buying a house while married a speculative investment. Women will understandably feel different as it is highly stacked in there favor. If you have enough money there are ways you can be protected, you need good lawyers for that. You must be smart to protect your wealth.

This is my non Disneyland view of this, you wont hear this in main stream media. In the USA when you buy a property get a lawyer, its a piece of advice Tom Leykis gave. Lets think about it, you are making what is likely the biggest single investment and leveraged risk of your life. Your going to put your trust in a real estate salesmen (usually a woman) whose only interest is to turn sales as fast as possible. Furthermore post 2008 crash it is beyond any question the whole US economy was brought down buy widespread fraud in this sector, remember that's firstly mostly the homeowners, the buyers, realtors, loan officers, banks, US government and politicians. If you have not pissed off a few people in buying property it is highly likely you are doing something wrong.

A personal experience, I had a friend a real estate sale woman, pre 2008. She was drunk pissed off about some client. She was getting sued. Listening to her account of the situation, she was clearly lying in a very big way. She simply did not understand all of the deceptive verbiage that was industry standard was wrong because it was there to deceive and misdirect. Bottom line is you simply cannot trust realtors period.

Of coarse just because you have the means (money) to protect your earned wealth you must do the correct things to protect it.

You can see many good examples of the wrong way, watch 30 for 30 broke. Pro athletes with loads of money wind up broke, almost always involving women thieving them legally and illegally, yep these guys are big on real estate.



Key here is rights of ownership.

In third and fourth world countries you do not have rights of ownership in practice (although it looks great on paper). Once you invest your money in some beautiful beach home you can count on the local kleptocracy. You will surly be extorted for money by the local politician, police chief, army general etc. If you don't pay up you will wind up in jail for drugs, murder or banging some 15 year old whore. Everyone is keep dirt poor in these 3rd and 4th world countries for a reason.

[NorthAmericanguy]

I agree real estate market is rigged.. How? I can't explain it other then the cost to keep a roof over your head is too high.

Just look at the material it takes to build a new home (it's a builders secret), it's nails, cheap particle board from China, concrete, electrical wires, cheap non brand windows, and roof shingles. These things don't cost much (30k total???), and the new homes today are being put together by guys from Mexico within 3-6 months who get paid 8-9 bucks an hour. In other words, the homes today are being built by the builders as cheap and fast as possible. But somehow, somehow, that new house now cost 400k, and so it takes people 30 years to pay it off because you need help from the bank to buy the house who hit you with the mortgage internist, plus the reoccurring yearly real estate taxes that also go up each year, plus the cost to maintain the home. It's a scam!

That said, you just have to do the math. If you're 30, and say, you live to 80 years old, you got to put a roof over yourself for 50 years no matter how you slice it unless you're willing to live out an RV, a trailer home, or under a bridge.

Ok, so if you rent an apartment for 50 years at 1000.00 a month, (and rent goes up over time!), in total you paid $600,000.00 in RENT over 50 years. Mind you, you will pay more then 600k as rent goes up each year and in some places 1000.00 is not enough.

However, if you buy a cheap house for $150,000.00, and pay for it in cash. Ok, now you have roof over your head and now all you have to pay is the property tax and maintenance on the house. For a 150k house there are places where you can pay only 1000k (or less) in yearly property tax so over 50 years now you're out 50k. We're at 200k spent now. A new roof and other property maintenance you can budget 50k over 50 years.

Now we're at 250k spent being an owner. This is LESS then 600k in rent money, plus you have the added benefit of being able to rent your place out ( a room or the whole house), or sell and recoup some of the money that you put into it.



So in the end, in the long run, you're better off owning so as long as you buy a home that's BELOW your means and manage it right. Renting is good for when you're in a temporary situation, or when you're just unsure of which direction you want to go in your life.


Edit: Where people mess up is they sell their perfectly good home and keep "upgrading" into a bigger more expensive home. They use having kids, better schools, or just the reason of needing more space for their junk as a reason to move.

[Tsar]

I agree real estate market is rigged.. How? I can't explain it other then the cost to keep a roof over your head is too high.

I agree. I don't understand how a home could be that expensive or why it would be that expensive.

[tom]

In the not so distant past owning property was wealth producing, that is in an agrarian society. When the industrial revolution came in this changed significantly. Today owning property has undergone significant change. That is because of the new dynamics of property confiscation. Knowing people who own more expensive homes have a common complaint, they all feel there homes are a money loosers. Most women think property is a money maker and that's only because they think some guys is going to pay for it and they will get to keep it.

[dreamer82]

I just invested in an international real estate fund. I hope to invest in some REITs soon too. As for buying a house, no freakin' way.

Be careful of private REITs. I invested in one through Wells Fargo in 2008 and in 2012 I had medical problems and they wouldn't let me take out the money. I had to go through hoops to finally get it back. Your REIT money becomes illiquid because they're afraid of everybody pulling out their money. Public REITs might be more liquid. My private REIT really took off for a couple years but then the share price fell from $10 to $8.50. That surprised the hell out of me because I thought private REITs don't change their share price. Thankfully, I got the principle back.

[tom]

I agree real estate market is rigged.. How? I can't explain it other then the cost to keep a roof over your head is too high.

I agree. I don't understand how a home could be that expensive or why it would be that expensive.

The answer is simple, risk has been transferred to the government its really that simple. Otherwise you would have to put bigger down payments, to cover the risk.
And being women are big drivers of emotional selfishness and are unaware of logical reasoning. They were big drivers of the hosing bubble and are very heavily invested in the current education bubble.

Its government subsidies for home ownership and courts that often give women ownership of real estate in a divorce. This is what keeps property overpriced. The price of property is the sum of government subsidies and level of government sanctioned wealth extraction from men.

[In2dadark]

Most folks i know who own property have to work their assess off to pay the monthly mortgage on their property, which means they are enslaved to 9 to 5 jobs and can't afford to explore the world and find themselves because well, they have to work.....

yes owning a house or property is great especially if you have wife and kids, but most of us in this forum are single nomads, we do not want to get married, get a 9 to 5 job and have two kids.... so is it even worth investing into property?

what are your plans as far as your golden years???

I didn't have plans for a family when I moved from Pa to Florida in 1988. Bought a home that was an owner/builder. Quality is high & the place is small, 1200 sf. 69k then. I can sell it for at least double that now. No plans on that.

Taxes are 700 a year. No females here to break sh## anymore. Though, over the years, that is exactly what they did & or tried. One was going to be arrested for breaking one of my windows & ended up paying to replace it.

Paid it off about a dozen years ago & after that bought a vacation home in Pa. That was not nearly of the quality as this little place & the taxes & HOA fees amounted to several times what I pay here. Fortunately, I was able to sell that place this year.

Said all of that to say this, in Florida & many other places you can do an owner builder & get it done (subbing out what you don't know how or can't do yourself) for half or less what builders want w/ double the quality & the exact way you want it. Then there's the alternative building methods like dirtbag homes. There are some amazing examples on youtube of DB homes.

If I were to build another vacation home, that would be a way I'd seriously consider. At this point, just waiting for the travel bug to get seriously nagging again. Not quite there yet. Going back & forth from Pa to Fl for 10 years got to be like work & taking care of 2 homes even more so.

I pretty much live here free now. Build yourself a good one in a conservative place w/ low taxes & let time do its work.

[Tsar]

Most folks i know who own property have to work their assess off to pay the monthly mortgage on their property, which means they are enslaved to 9 to 5 jobs and can't afford to explore the world and find themselves because well, they have to work.....

yes owning a house or property is great especially if you have wife and kids, but most of us in this forum are single nomads, we do not want to get married, get a 9 to 5 job and have two kids.... so is it even worth investing into property?

what are your plans as far as your golden years???

I didn't have plans for a family when I moved from Pa to Florida in 1988. Bought a home that was an owner/builder. Quality is high & the place is small, 1200 sf. 69k then. I can sell it for at least double that now. No plans on that.

Taxes are 700 a year. No females here to break sh## anymore. Though, over the years, that is exactly what they did & or tried. One was going to be arrested for breaking one of my windows & ended up paying to replace it.

Paid it off about a dozen years ago & after that bought a vacation home in Pa. That was not nearly of the quality as this little place & the taxes & HOA fees amounted to several times what I pay here. Fortunately, I was able to sell that place this year.

Said all of that to say this, in Florida & many other places you can do an owner builder & get it done (subbing out what you don't know how or can't do yourself) for half or less what builders want w/ double the quality & the exact way you want it. Then there's the alternative building methods like dirtbag homes. There are some amazing examples on youtube of DB homes.

If I were to build another vacation home, that would be a way I'd seriously consider. At this point, just waiting for the travel bug to get seriously nagging again. Not quite there yet. Going back & forth from Pa to Fl for 10 years got to be like work & taking care of 2 homes even more so.

I pretty much live here free now. Build yourself a good one in a conservative place w/ low taxes & let time do its work.

Could you recommend a good builder for custom homes in Florida? One that is willing to build a 400 sq ft - 800 sq ft home custom starter home that does projects in Tampa?

[zacb]

Are we talking and for residence or for business purposes? Single families seem like a bad investment to me, but if you could put up with the hassles of being a landlord, living in a multifamily while you rent out the rest would seem wise, since you are using other people's money to boost your cashclow and standard of living. Silverenergy and others could probably expound a bit on it more, but the only thing I see as a problem is that you need a good property manager, but then again if you could find some one from your family that is not going anywhere, it might work out ( what I am considering).

[jamesbond]

Investing in real estate is a terrible idea for many reasons. This video goes over the many myths that people have regarding real estate.

[youtube]http://www.youtube.com/watch?v=A90vWH9aFYY[/youtube]

[CannedHam]

I've spent many months looking into this, and don't really see many advantages unless (1) you plan to live in the house for 10+ years or (2) you eventually plan to rent out the house. I'm not particularly tied down to the metro area where I'm at, so no way does it make sense for me to buy. Plus, my (very nice) 1BR apartment rent is <10% of my gross income.

[traveller]

Owning real estate in America is a complete, total myth! I am sure many of you are aware of what are known as property taxes. Well, property taxes are not taxes at all. In fact, property taxes are actually rents of land that are used for public purposes. Few even want to know it, but capitalism is in fact communism under a mask!