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Old 05-08-2008, 09:43 AM
 
692 posts, read 2,796,515 times
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Quote:
Originally Posted by Gladys99 View Post
Buy real estate! Husband and I bought acreage in upscale area when I was in my mid 20's. We decided we would do better by subdividing property even though we would have made out great by selling the large parcel.......anyway 2 years ago we sold one lot for 985K. First one sold at 325K 10 years ago. We have one more lot left and will wait for next real estate wave since lots are getting scarcer. we've seen 3 real estate waves during our ownership so we know it'll come. They don't make any more land. I retired 2 years ago at age 53. Did I mention we paid 65K for 16 acres? we paid more than that to develop it. good luck


Yes Gladys,

Realestate can be a wonderful investment when purchased at the proper time, at the proper price, and in the proper place etc. Even though I have made most of my money in the stock market I also have bought and sold homes and properties and been a landlord twice over the years. Every thing I have handled has made good profits, but in comparing the transactions of stocks and realestate, the stocks are far easier and quicker to deal with.
If I decide to buy or sell a stock in the morning after thinking about it all night, all I do is get up and go to my computer, click my mouse, and for $10 or less I can buy or sell any quantity of shares at any price I can get, and I know what that amount will be instantly without any large commisions, bickering or bargaining, or deals falling thru, or being contingent on a list of things I don't like or agree with, or have to wait for diminishing offers to come, or potential buyers walking away after spending weeks or months trying to make a deal, or be held hostage to someone elses credit worthyness etc...etc...etc.
I can even set my limit prices ahead of time and when/if they are reached, they will automatically be executed even if I am in the Keys fishing. I don't even have to wait for the long process of closing to get the money. Three business days and I can take the cash.
With stocks I don't have to deal with paying property taxes and other related expenses while I hold for gains. I don't have to manage and care for rentals or worry about tennants problems or deal with evictions etc.
The other thing I really like about the stock market is only for the qualified.
I can quick trade stocks when the markets are right which is most of the time if you know what you are doing. I have completed transactions where I have made up to 70% in one day. Click...Click
Try that with realestate.
I also like the fact I can sell or buy in any quantity I please. If I only want to invest a small amount at a given time I don't have to buy the whole 9 yards to get the deal.
For longer term holdings in taxable accts, stocks are tax deferred until sold just like an IRA.
All holdings in an Roth IRA will be tax free when liquidated.
The list goes on but really I am not down or against realestate if that is the thing you understand or enjoy doing. It can be a very good and profitable investment and has made a lot of "savy investors" really rich, but so have the stock markets.
I guess it boils down to individual likes and dislikes.......

Silverfox

Last edited by silverfox; 05-08-2008 at 10:06 AM..
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Old 05-08-2008, 10:45 AM
 
Location: Forests of Maine
30,703 posts, read 49,495,894 times
Reputation: 19151
Quote:
Originally Posted by silverfox View Post
Yes Gladys,

Realestate can be a wonderful investment when purchased at the proper time, at the proper price, and in the proper place etc. Even though I have made most of my money in the stock market I also have bought and sold homes and properties and been a landlord twice over the years. Every thing I have handled has made good profits, but in comparing the transactions of stocks and realestate, the stocks are far easier and quicker to deal with.
If I decide to buy or sell a stock in the morning after thinking about it all night, all I do is get up and go to my computer, click my mouse, and for $10 or less I can buy or sell any quantity of shares at any price I can get, and I know what that amount will be instantly without any large commisions, bickering or bargaining, or deals falling thru, or being contingent on a list of things I don't like or agree with, or have to wait for diminishing offers to come, or potential buyers walking away after spending weeks or months trying to make a deal, or be held hostage to someone elses credit worthyness etc...etc...etc. I can even set my limit prices ahead of time and when/if they are reached, they will automatically be executed even if I am in the Keys fishing. I don't even have to wait for the long process of closing to get the money. Three business days and I can take the cash. With stocks I don't have to deal with paying property taxes and other related expenses while I hold for gains. I don't have to manage and care for rentals or worry about tennants problems or deal with evictions etc. The other thing I really like about the stock market is only for the qualified. I can quick trade stocks when the markets are right which is most of the time if you know what you are doing. I have completed transactions where I have made up to 70% in one day. Click...Click Try that with realestate. I also like the fact I can sell or buy in any quantity I please. If I only want to invest a small amount at a given time I don't have to buy the whole 9 yards to get the deal. For longer term holdings in taxable accts, stocks are tax deferred until sold just like an IRA. All holdings in an Roth IRA will be tax free when liquidated. The list goes on but really I am not down or against realestate if that is the thing you understand or enjoy doing. It can be a very good and profitable investment and has made a lot of "savy investors" really rich, but so have the stock markets. I guess it boils down to individual likes and dislikes.......
Silverfox
Rental real estate does take some homework.

You can not decide to buy today, and sale tomorrow.

Rental real estate is a long term investment. They can provide housing to your family, large tax-sheltering, and they can provide a very good return.

To make a Single-Family-Residence [SFR] work out profitably as a rental takes a certain set of circumstances. It can be done.

I have known a family that over a four block area built 28 houses. Each as a SFR. And it worked out very nicely. None of them had mortgages, they were each built using funds left-over each week from their family budget.

On the other hand, we bought various Multi-Family-Residences [MFR], tri-plexes to eight-plexes. Zero money down, owner-occupied, and filled with tenants from the date of signing. I had to pony-up the closing costs in each case. From the first month each property brought in more than the expenses [while were stayed there].

Moving away requires a manager, which does cut profits a great deal. And may bring in an additional layer of risk depending on how responsible the manager is.

We have dealt with 'good' managers, and we have lost considerable equity and profits from dealing with 'poor' managers.

IMHO: overall it averages out, for us to around 16% gain in Net Worth each year, plus the sheltering.
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Old 05-08-2008, 10:51 AM
 
29 posts, read 98,752 times
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Silverfox and ForestBeekeeper you are both right! I have 403b, Roth, individual stocks, and real estate. From all of them my best return has been real estate. I like the liquidity of stocks. I treated real estate as long term and it came through.
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Old 05-08-2008, 11:03 AM
 
692 posts, read 2,796,515 times
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Forest Beekeeper,

To your credit.....Your left out the appreciation in value of all your properties, or was that included in the 16%.

The only problem is, you can't put the true figure on that portion until liquidation.

Silverfox
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Old 05-08-2008, 11:21 AM
 
Location: Forests of Maine
30,703 posts, read 49,495,894 times
Reputation: 19151
I really had not looked at any of these from the context of resale value.

Just simple Net Worth: outstanding liability vs. what I paid for them [or half of their insurance value].

Seeing the outstanding mortgage principle of each, and tracking how much the principle drops each year.

If you want cash from that equity you can re-finance the mortgage. Generally I do not like to do such. But I have.

Starting each property with zero-down, we had to go with ARMs [ick], each time. Once you build up some equity, refinance to a fixed mortgage and take out some cash.

Kind of like liquidating a bit here and there, over the years.
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Old 05-08-2008, 11:38 AM
 
26,591 posts, read 52,361,982 times
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I'm a peasant at heart and no doubtedly come from a long line of peasant farmers who place a high value on land ownership... something that can be held through the generations... My Grandfather on my Mom's side said told me at a young age, "If you take care of the land... the land will take care of you"

Attributes I value of Rental Property for investment purposes are you can insure against loss, the investment can be self-sustaining... especially over time you can, it provides a hedge against inflation and tax advantages with the ability to defer gains by using 1031 Exchanges...

I've never realized a loss or had my property become worthless... unfortunately, I can't say the same for my Stocks and Mutual Funds...

Actually, I never realized a loss in any investment other than the Stock Market. Real Estate, Antique Cars, Collectibles and Numismatics have all done very well for me.

I have had many late night discussions for friends who are quite successful in the market and have been going back 30 to 40 years... they also have done well with building spec homes and commercial property... however, they all prefer the market for it's simplicity, extremely low overhead and liquidity...
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Old 05-20-2008, 09:58 PM
 
Location: Scottsdale, AZ
4,486 posts, read 15,293,605 times
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Interesting read over this thread. The poster above me pretty much summed up what I would've said. Land, land, land! God isn't making any more of it and it's something that doesn't lose value during recessions and bumps in the economy. My father have around 800 acres of land in Iowa and with land prices at about $6000/ acre, he's sitting on a nice retirement fund if he ever decides to sell. That land will always be there so it's a pretty sound investment.
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Old 05-21-2008, 06:19 PM
 
1,830 posts, read 4,773,045 times
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Quote:
I don't believe the value of a good marriage can ever be over estimated...
... nor the value of a good prenuptual agreement.
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Old 06-04-2008, 09:34 PM
 
358 posts, read 471,477 times
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buying real estate is good as well, bought 183 acres for a bit under 200k 14 years ago and sold it 2 weeks ago for almost 700k.
it also depends on what you have and who want to pay what for it.
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Old 06-05-2008, 07:21 AM
 
Location: Forests of Maine
30,703 posts, read 49,495,894 times
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Quote:
Originally Posted by Losertarian View Post
buying real estate is good as well, bought 183 acres for a bit under 200k 14 years ago and sold it 2 weeks ago for almost 700k. it also depends on what you have and who want to pay what for it.
Bought land for $200k:
If you paid cash then it cost you $200k;
If you got a mortgage, then after paying interest and principle for 20-years, you likely paid $400k for that land.

I observe a trend in these. "it cost you", and "you likely paid".

Galen's first rule of investing: never use your own money to invest with.

A second point here: to get your 'profit' you must sell the investment. Leaving you with no investment. You have nearly $700k in pocket, and no investment, and then you need to look at taxes.

A third issue [which I rather hate to bring up but it is still there in front of us], this investment of yours provided no tax sheltering for you. During the 20-years of paying the mortgage, how much of your salary was sheltered from income taxes due to this property?

There exist other investments which do not use your money. Which still remain gaining you Net Worth even after you have began siphoning out your profit. And which can be done tax-free. And which can provide tax sheltering to your other income streams.

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