[airics]

Originally Posted by ragabnh

After you pay Property Manager, HOA, Taxes, insurance and Home Warranty, the return on your investment is 4% or even less. Which makes investing in real estate not good at this time. CD's and Dividend Funds are more appropriate and your money is Liquid. Speaking from paying cash perspective.

If you are talking Vegas that’s true. How do you figure cds are liquid? You are locked in and 4% is not a great investment

[boatpi]

The deals were in 2009-2011, buying a 5 year old houses at 2,100 square feet at $105-110K, renting at $1,350.

[Packrat1]

Besides the return on investment, are you also taking into account the property’s appreciation? This is assuming you bought right and in a desirable area.

[NJ Brazen_3133]

Originally Posted by ragabnh

After you pay Property Manager, HOA, Taxes, insurance and Home Warranty, the return on your investment is 4% or even less. Which makes investing in real estate not good at this time. CD's and Dividend Funds are more appropriate and your money is Liquid. Speaking from paying cash perspective.

ARent the taxes cheap, insurance is pretty cheap too no? What is difference between home warranty, and insurance?

[kcoliver]

Insurance is Landlords insurance (or homeowners if you are living in property). Home Warranty covers things like water heaters, stoves, airconditioner/heater. Taxes are fairly low. CD is far from liquid, either route, buying for investment, or c.d. is a gamble, c.d. can tie money up for a while, investments can appreciate. It's up to your level of comfort.

[Willy702]

Originally Posted by ragabnh

After you pay Property Manager, HOA, Taxes, insurance and Home Warranty, the return on your investment is 4% or even less. Which makes investing in real estate not good at this time. CD's and Dividend Funds are more appropriate and your money is Liquid. Speaking from paying cash perspective.

If you aren't using leverage real estate investment returns aren't great in most markets.

[airics]

Where are cd’s 4%? I would never lock-in for more than a year

[NJ Brazen_3133]

Originally Posted by kcoliver

Insurance is Landlords insurance (or homeowners if you are living in property). Home Warranty covers things like water heaters, stoves, airconditioner/heater. Taxes are fairly low. CD is far from liquid, either route, buying for investment, or c.d. is a gamble, c.d. can tie money up for a while, investments can appreciate. It's up to your level of comfort.

Is home warranty required? NYC does not really have home warranty. At least I never hear too much about it.

[NJ Brazen_3133]

Originally Posted by Willy702

If you aren't using leverage real estate investment returns aren't great in most markets.

By leverage, dont you mean bank debt? If you can buy outright without owing the bank, then you get to keep all that money. Usually bank debt is greatest fixed cost. How can that not be a great investment?

[ddrhazy]

Originally Posted by NJ Brazen_3133

By leverage, dont you mean bank debt? If you can buy outright without owing the bank, then you get to keep all that money. Usually bank debt is greatest fixed cost. How can that not be a great investment?

Because you are using someone else's money to make an investment. If you can get a mortgage for 100k and make 7% ROI for the rental and the interest on the loan is 4%, you are pocketing a 3% profit.

But today's rentals in Las Vegas and the rates offered by banks for a 30 year fixed rate mortgage don't have the numbers to make this idea pencil out anymore. Instead, you're looking at 5.5% ROI at best. When 30 year fixed rate mortgages are 5%, why bother making 0.5% on your money when you can put the money in a 1 year CD at 3%?

If investors are buying with a 15 or 10 year mortgage or outright cash it can still make sense but there is always the fear that the price of real estate drops like it did in '07.

The house play makes you a landlord with the problem of management, maintenance, vacancy filling, tenant screening, cleaning, remodeling, rent collection, evictions and the possibility of real estate depreciating.

The CD play is risk free and insured by the federal bank.

Both tie up your money, but real estate probably ties up the average investor's cash for at least 5 years, if not longer. There's plenty of CDs that let you withdraw your cash and forfeit the interest appreciated if you decide to remove it before it matures, making CDs fairly liquid.

Buying real estate in Las Vegas on speculation is pointless now. The days of double digit appreciation is likely over.