Wednesday, November 23, 2011 5:38:17 PM
I'm trying to stick with buying in 'better' areas but for me that would mean better avg neighborhoods. Can't afford that high end stuff, or rather don't want to leverage to it just in case things sour further. Our country still allows big leverage on real estate vs much of the world (at least in Asia).
That high end certianly has held up well though as you mention (wealthy end). Amazing to hear you have only seen very mild price depreciation. I'm looking at stuff selling at levels seen almost 15 years ago at times.
I'm still spending most of the time looking at residential property right now instead of 'stocks'. Gotta figure out how much exposure is enough, no knowing how low home prices will go but in this area I am finding listings selling around 1998 levels (sometimes lower) and with immediate decent positive cash flow. Some need some cosmetic repair but the rent values I would think should drive some stability at some point (unless rents start tanking- so far they have not out here).
With 20% down, calculating 20% vacancy rate and 10% allowance (of annual rents) for fixing stuff plus taxes and ins, it is not hard to find 20%+ annual ROE and fairly strong cash flow. Prob is I don't want to leverage much into real estate with all the unknowns. A little, yes. Not a lot.
About the only gated place for us (my family) might be a new home to live in
With interest rates where they are, it is a meaningful thought to pursue.
Suppose I could quit the day job and become a full time landlord (d'oh!!!). But work hasn't pissed me off enough to try that LOL. It is nice to get health benefits and such for sure with the regular job. Eh, the wife probably wouldn't spring for it anyway even if I wanted to.
That high end certianly has held up well though as you mention (wealthy end). Amazing to hear you have only seen very mild price depreciation. I'm looking at stuff selling at levels seen almost 15 years ago at times.
I'm still spending most of the time looking at residential property right now instead of 'stocks'. Gotta figure out how much exposure is enough, no knowing how low home prices will go but in this area I am finding listings selling around 1998 levels (sometimes lower) and with immediate decent positive cash flow. Some need some cosmetic repair but the rent values I would think should drive some stability at some point (unless rents start tanking- so far they have not out here).
With 20% down, calculating 20% vacancy rate and 10% allowance (of annual rents) for fixing stuff plus taxes and ins, it is not hard to find 20%+ annual ROE and fairly strong cash flow. Prob is I don't want to leverage much into real estate with all the unknowns. A little, yes. Not a lot.
About the only gated place for us (my family) might be a new home to live in
With interest rates where they are, it is a meaningful thought to pursue. Suppose I could quit the day job and become a full time landlord (d'oh!!!). But work hasn't pissed me off enough to try that LOL. It is nice to get health benefits and such for sure with the regular job. Eh, the wife probably wouldn't spring for it anyway even if I wanted to.
I don't mind stealing bread from the mouths of decadence... But I can't feed on the powerless when my cup's already overfilled.
-Temple of the Dog
Join the InvestorsHub Community
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
