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Old 07-11-2017, 08:59 AM
 
6,838 posts, read 6,596,634 times
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Quote:
Originally Posted by jayrandom View Post
Norwood has a nicer town center and better restaurants. Dedham is closer to Boston (good for commute time, bad if you want a seat on the Franklin Line). If you take the commuter rail, Endicott is a good neighborhood (Islington in Westwood would be, too, but the prices have zoomed past the OPs budget).

If we're going to judge niceness by how expensive the place is, Dedham wins hands down. There's no equivalent in Norwood to Precinct 1 in Dedham. Just search for $1m+ homes in Dedham and you'll get a couple dozen hits; search for $1m+ homes in Norwood and you'll get nothing.
Dedham is more varied than Norwood. Norwood doesn't have an equivalent to Upper Dedham, that's for sure. But East Dedham has quite a bit more undesirable (and I think it's gotten worse) than Norwood. All Norwood really has for undesirable is the Flats, which is pretty small by comparison. Comparing averages and medians, Dedham comes out as slightly more expensive but not by much. The only thing making it more desirable is it's closer proximity to the city.
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Old 07-11-2017, 09:12 AM
 
82 posts, read 46,061 times
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Quote:
Originally Posted by chicagoliz View Post
What investment mechanism hasn't caused some people to file bankruptcy? Like in anything, you have to know what you're doing. Many people who were investing solely as an investment and not as a homestead didn't know WTF they were doing. If you're smart about it and have the money you can still make a lot. Real estate is relatively safe, because the value of the property is never going to go to zero, which can certainly happen with most other investments.

And I don't think you need the 30 year time horizon, either. 5-6 could still get you a good return, especially in this market in suburbs commutable to Cambridge and Boston. As with anything, of course there is some risk. I'd be more worried about buying in the exurbs that aren't close to any major employment centers and where most people move only because they are priced out of closer in suburbs and are seduced by a big, new house.

And yes, if you're becoming a LL, absolutely you have to factor in upkeep expenses and contingency expenses. If you've got a mortgage on the rental income property, that has to be paid regardless of whether the tenant has paid the rent, or even if there is no tenant.
What proportion of stock market investors borrow to invest vs the proportion of real estate investors? Without leverage, investment in real estate does not provide much of a return. There are exceptions, of course.

Real estate prices don't have to decline to anywhere near zero to wipe out an investor if they're leveraged. That was my only point.

If you're a property manager with no mortgages and just want to collect rental income for cash flow - that's fine, but in these super heated areas what cap rate are we talking about?

Last edited by simplexsimon; 07-11-2017 at 09:22 AM..
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Old 07-11-2017, 09:34 AM
 
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Quote:
Originally Posted by chicagoliz View Post
And I don't think you need the 30 year time horizon, either. 5-6 could still get you a good return, especially in this market in suburbs commutable to Cambridge and Boston. As with anything, of course there is some risk. I'd be more worried about buying in the exurbs that aren't close to any major employment centers and where most people move only because they are priced out of closer in suburbs and are seduced by a big, new house.
Where are these exurbs that aren't close to any major employment centers and where most people move only because they are priced out of closer in suburbs and are seduced by a big, new house?
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Old 07-11-2017, 11:31 AM
 
Location: North of Boston
2,930 posts, read 4,882,968 times
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Quote:
Originally Posted by massnative71 View Post
Where are these exurbs that aren't close to any major employment centers and where most people move only because they are priced out of closer in suburbs and are seduced by a big, new house?

I think of towns like Lunenburg, Dracut, Amesbury, and Salisbury in the North; Bellingham, Lakeville, Carver and Rochester to the South.
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Old 07-11-2017, 12:29 PM
 
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Quote:
Originally Posted by gf2020 View Post
I think of towns like Lunenburg, Dracut, Amesbury, and Salisbury in the North; Bellingham, Lakeville, Carver and Rochester to the South.

Well from my own experience of people I personally know (all I really have to go by):

Lunenburg - Know one person there and he works in Shirley. Him and his family seem very happy. I think it's a lovely town myself.


Dracut - The one town on that list where I can't say I know of anyone. But it is close to Lowell, Nashua, Andover, Wilmington, etc. Lot's of employment in those areas.


Amesbury - One person who moved there from Worcester area because she had job close by. She was perfectly content there. She later ended up working in Boston and decided to stay put.


Salisbury - Two people (separate), one who commutes to Boston and the other works right in town. They both grew up in that area and don't think either intend to move anywhere else.


Bellingham - Know at least a dozen people in that town. Most grew up in that area and work around the 495 corridor (or within 20 minutes of there). Out of all, I know of only one family who moved there because they "settled" on it due to its affordability. They did 10 years there, then moved to Mendon which is actually further from their jobs but they wanted a nicer town with better schools.


Lakeville - One guy who works locally. From there originally, will probably die there.


Carver - One guy who moved down from Dorchester decades ago and never looked back. Still commutes to Boston but at odd hours. Doesn't seem to have any regrets on moving to Carver, although he increasingly complains about the area getting more crowded and too many people from Boston (area) moving in. The other person I know is a lifer who commutes to Boston, never had a desire to move and will be permanently retiring there within a year.


Rochester - One guy who commutes to Middleboro (think he was from that area originally), and another who grew up there who for a while commuted to Boston but is now living there disabled.






Again, that is just of examples I'm familiar with but I don't have the impression that any of those communities are places people settle for just because they are more affordable. There are various reasons why people decide to make a community their home, and for others it already is "home".


Now if we're talking Brockton, Stoughton, Lynn, Worcester, Fitchburg, Southbridge, Haverhill, Nashua, Pawtucket, Fall River...those cities are all full of people who migrated there because they couldn't afford to live elsewhere.
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Old 07-11-2017, 05:52 PM
 
Location: East Coast
2,718 posts, read 1,534,874 times
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Quote:
Originally Posted by simplexsimon View Post
What proportion of stock market investors borrow to invest vs the proportion of real estate investors? Without leverage, investment in real estate does not provide much of a return. There are exceptions, of course.

Real estate prices don't have to decline to anywhere near zero to wipe out an investor if they're leveraged. That was my only point.

If you're a property manager with no mortgages and just want to collect rental income for cash flow - that's fine, but in these super heated areas what cap rate are we talking about?
It can provide quite a bit of return. There are various strategies that different investors engage in. And sometimes, people do borrow money to invest in stocks. It actually happens quite a bit in situations with exercising stock options. Even with borrowing money, though, it is possible to make quite a bit of money in real estate, but obviously the more you borrow, the more you're risking. Sure, the best situation, in terms of owning rental property, is to have no money owed on a mortgage. But it depends on a lot of factors, and there certainly are situations where, even with a mortgage, an investor can still make a good amount of money, and often have a relatively safe investment that they can sell. This is, of course, market dependent, and this is why people really need to know what they're doing when they invest in real estate. (Like they should know what they're doing when they invest in anything.)



Quote:
Originally Posted by massnative71 View Post
Where are these exurbs that aren't close to any major employment centers and where most people move only because they are priced out of closer in suburbs and are seduced by a big, new house?
Quote:
Originally Posted by gf2020 View Post
I think of towns like Lunenburg, Dracut, Amesbury, and Salisbury in the North; Bellingham, Lakeville, Carver and Rochester to the South.
Quote:
Originally Posted by massnative71 View Post
Well from my own experience of people I personally know (all I really have to go by):
The ones gf2020 mentions probably fit the bill, although I'm not familiar enough with all of the towns to definitely state which ones might fall into that category. This is not to say that everyone who lives in those towns moved because they could not afford the city. Certainly, there are always people who want to live further out/in smaller towns that aren't near the city because they prefer them. But what happens in hot markets is that all the prices go up, and people who *do* want to live in/near the city end up further out and when the market cools, the housing prices fall. I've seen it happen in a lot of towns in the Chicago area. Two of the northern collar counties were built up in just this way. And the real estate market there has cooled from where it was a decade ago. People are stuck in those towns, because unless they work in that town, you're looking at over two hours to get to Chicago in the towns not near a train. And some of these towns are not particularly close to some of the other suburbs that have become employment centers. People don't really want to live 45 minutes from those employment centers. Here, you're looking at towns that are far from Boston and not convenient to the train.

Lunenburg is a town that I have assumed to be in this category, but in full disclosure, I have not visited there. When we were moving up here, someone I knew said they had a friend who moved up here the year before and moved to Lunenburg. This person moved from a town in the Philadelphia area that I would also categorize this way. Looking at the map and seeing the housing stock, I assumed that it did fall in this category, and it was too far away from Boston for us, so I never investigated it further. I'm sure it's a perfectly lovely town and that many people are very happy there. But I suspect there is a reasonable percentage who moved there because it was affordable. And if the housing market were to plummet in Boston, towns like that would suffer the biggest declines. Yes, I see it's a half hour/45 minutes to Worcester. And I know there are jobs in Worcester. But not as many as there are in Boston. My assessment is just from my personal analysis of market factors and I could always be proven wrong. I just believe that if costs were the same, there are a lot more people who would want to live in Newton than would want to live in Lunenburg. (Which, again, is not to say that there are no people who would prefer Lunenburg and would never want to live in Newton.) If there is factual evidence to the contrary, I'm willing to reassess. I just don't think it is so.
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Old 07-11-2017, 07:09 PM
 
Location: Columbia SC
7,856 posts, read 6,601,590 times
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You cannot get hurt in dirt. As an ex-M*******r I cannot believe the towns some are considering commutable to Boston.
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Old 07-11-2017, 08:38 PM
 
3,909 posts, read 3,812,981 times
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I would argue that real estate generally is more involved than stocks. Stocks are more liquid but there obviously is more volatility. I bought in at a nearly two year low at the right time. You can't just do it that fast with real estate. At the same point the upkeep of properties is key. There are good property managers out there.

The sad part I see though is houses that frankly just get old with the people in them. Lead paint, asbestos, no wifi/tv, old styles inside etc. It's good to update things every five or so years rather than one huge remodel. That's good if you live in that house. Buying a house on pure speculation is not advisable. Renting also makes sense if you are looking for more work. Employers know telling a renter to move is much easier than one that owns their home. I rather see real estate agents and REITS that operate on a grander scale. Ones that focus on just one area or region are not apt to recognize bubbles and tend to be sheltered.
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Old 07-12-2017, 04:54 AM
 
2,761 posts, read 2,185,181 times
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Quote:
Originally Posted by johngolf View Post
You cannot get hurt in dirt. As an ex-M*******r I cannot believe the towns some are considering commutable to Boston.
People "get hurt in dirt" all the time.
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Old 07-12-2017, 06:37 AM
 
714 posts, read 827,234 times
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Quote:
Originally Posted by johngolf View Post
You cannot get hurt in dirt. As an ex-M*******r I cannot believe the towns some are considering commutable to Boston.
If you're priced out of the area you have to somehow make it work. To some of my friends commuting to work 1+ hour one way is just the way life is.
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