Will this recent stock market decline push people into real estate etc (mortgage, investment)
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That's not fluff it clearly labels a host of risk specific to real estate investing
Mainstream press always overstates the risks of property investment and plays down the upsides...but they always downplay the risks of investing in the stockmarket and overstate the benefits or upside.
There was no mention of buying a property that is actually a 'deal' , which is buying it at a great price..which is a necessity of real estate.
I also don't agree that it's easier to analyze stock investments versus real estate. Investing in funds and actually knowing the businesses those funds are involved in and how your investment might be affected is far more complicated than buying a house or multifamily property.
Or imagine comparing the 'value' of one company versus another. These are complex business sometimes with 10s of thousands employees and involved in a ton of different types of businesses. Much harder to analyze versus houses.
Also you don't have to leverage with real estate..that's just one of the benefits..but they are making it seem like it's only a negative. There are even situations where people can take over properties for free. I just heard about one guy that had people giving him properties they couldn't handle , many of them had violations ..but he was able to negotiate down the violations.
All kinds of creative ways to make money like this , which is not present in the stock market.
Mainstream press always overstates the risks of property investment and plays down the upsides...but they always downplay the risks of investing in the stockmarket and overstate the benefits or upside.
There was no mention of buying a property that is actually a 'deal' , which is buying it at a great price..which is a necessity of real estate.
I also don't agree that it's easier to analyze stock investments versus real estate. Investing in funds and actually knowing the businesses those funds are involved in and how your investment might be affected is far more complicated than buying a house or multifamily property.
Or imagine comparing the 'value' of one company versus another. These are complex business sometimes with 10s of thousands employees and involved in a ton of different types of businesses. Much harder to analyze versus houses.
Also you don't have to leverage with real estate..that's just one of the benefits..but they are making it seem like it's only a negative. There are even situations where people can take over properties for free. I just heard about one guy that had people giving him properties they couldn't handle , many of them had violations ..but he was able to negotiate down the violations.
All kinds of creative ways to make money like this , which is not present in the stock market.
Amen!!! REPPED. And it's not just the Mainstream Press, it's also the Online Investment Communities as well. They always bash owning a business, owning real estate, or doing any type of active investments over riding the casino/roller coaster crap that is the Stock Market!
I'm telling you to forget these guys and get out of this casino.
Mainstream press always overstates the risks of property investment and plays down the upsides...but they always downplay the risks of investing in the stockmarket and overstate the benefits or upside.
For mainstream one is passive the other isn't. That's really the big difference
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There was no mention of buying a property that is actually a 'deal' , which is buying it at a great price..which is a necessity of real estate.
I also don't agree that it's easier to analyze stock investments versus real estate. Investing in funds and actually knowing the businesses those funds are involved in and how your investment might be affected is far more complicated than buying a house or multifamily property.
These great deals cut both ways though
Quote:
Or imagine comparing the 'value' of one company versus another. These are complex business sometimes with 10s of thousands employees and involved in a ton of different types of businesses. Much harder to analyze versus houses.
Also you don't have to leverage with real estate..that's just one of the benefits..but they are making it seem like it's only a negative. There are even situations where people can take over properties for free. I just heard about one guy that had people giving him properties they couldn't handle , many of them had violations ..but he was able to negotiate down the violations.
All kinds of creative ways to make money like this , which is not present in the stock market.
You don't have to have leverage but not many people sit on enough cash to buy a second house outright, even if they did that doesn't take into account the operating cost and effort
If you feel you need to not participate in the roller coaster/casino that is "the Markets" then don't do it. I'm not participating in it EVER. I'm in Long Term CDs that are averaging 3% right now and will go to 4% - 4.5% once the Fed increases the rates again.
Don't allow these sheep, programmed, stock market "fans" to try and make you feel bad for not wanting to ride a damn roller coaster for 15 - 30 years watching your paper value grow, then decline, then grow, then decline, then grow again, then decline again, etc. etc.
Who the hell wants to go through this crap for 15 - 30 years just to earn an additional 1% - 2% a year CAGR? I know I don't! Life is stressful enough for goodness sakes.
I agree with you that you should only do what your stress tolerates. I like to keep an open mind and I do own stocks both in retirement accounts as well as non retirement accounts. I have funds and individual stocks.
I have to say though that the market has let me down several times. I also haven't heard of too many people that have become wealthy just investing in stocks as individual investors.
Even the advocates only tout 12% long term returns. If you have an idea of what you are doing in real estate those returns can easily be beaten. Yes it generally is more hands on and can't all be done from the computer...but most people seem to spend a lot of time thinking about or analyzing what stocks or funds to invest in. That's a lot of work even for a 12% return.
You might want to look into investing in first deeds for real estate or being a hard money lender. Yes it sounds 'risky' ..but these loans are often made at 65-70% loan to value for the short term. Many investors are paying 2% points on the loan and usually about 11-15% or so in annual interest.
You would of course want to know the actual value and property you are backing though. But it seems like a good way to make a great return with less risk and work.
I'm wondering if this stock market decline will motivate or push people to invest in real estate or maybe their own business where they have more control.
Yes. Stupid money will always sell low and buy high. Real estate prices have been booming.
I agree with you that you should only do what your stress tolerates. I like to keep an open mind and I do own stocks both in retirement accounts as well as non retirement accounts. I have funds and individual stocks.
I have to say though that the market has let me down several times. I also haven't heard of too many people that have become wealthy just investing in stocks as individual investors.
Even the advocates only tout 12% long term returns. If you have an idea of what you are doing in real estate those returns can easily be beaten. Yes it generally is more hands on and can't all be done from the computer...but most people seem to spend a lot of time thinking about or analyzing what stocks or funds to invest in. That's a lot of work even for a 12% return.
You might want to look into investing in first deeds for real estate or being a hard money lender. Yes it sounds 'risky' ..but these loans are often made at 65-70% loan to value for the short term. Many investors are paying 2% points on the loan and usually about 11-15% or so in annual interest.
You would of course want to know the actual value and property you are backing though. But it seems like a good way to make a great return with less risk and work.
Are you telling me people have only made handsome gains in RE & not lost a dime?
Every statement of yours relating to real estate has risk written over it. Your risk of not generating passive cash flow is 100% with 1 rental property but if you've a whole neighborhood of properties then the odds are always in your favor.
Purpose doesn't matter, although for practical purposes retirement tends to be the only thing that's far enough out for most of us that stock markets make sense to invest in. If I was saving for a down payment on a house, I wouldn't be doing so in the stock market necessarily. I mean, it would depend. If was something were my timing was flexible dependent upon how the market was maybe.
In regards to retirement , investing in the stock market is often the reason that people can't retire early.
Actually more people are probably more likely to have more value in their homes by the the time they retire versus their stock portfolio. At least this seems to be the case where I live. There are lot's of people that bought homes that were afford in Southern California to live in and they did very very well. Much better than inflation or the stock market.
If they had instead invested in more real estate in the area they would likely be able to retire much earlier. The rent alone on some of these homes is $4,000 a month.
Another issue is that planning to retire later becomes a self fulfilling prophecy of sorts. Why should it be normal to retire so late in life. What if the new norm for retirement was 50 or even earlier.
I read recently that although many Americans plan to work later in life , this won't even be possible for many of them because many of them will have a decline in health ..and others will suffer layoffs and age discrimination.
My former boss just went through this herself. She worked at the same place for over 30 years..and then they made it clear that they didn't need or appreciate her there. She gave the place her all , came in before everyone stayed late pretty much everyday etc.
Luckily for her she should be fine , but with this stock market crash I'm sure she's uneasy. Luckily she owns two properties bought many years ago.
I agree with you that you should only do what your stress tolerates. I like to keep an open mind and I do own stocks both in retirement accounts as well as non retirement accounts. I have funds and individual stocks.
I have to say though that the market has let me down several times. I also haven't heard of too many people that have become wealthy just investing in stocks as individual investors.
Even the advocates only tout 12% long term returns. If you have an idea of what you are doing in real estate those returns can easily be beaten. Yes it generally is more hands on and can't all be done from the computer...but most people seem to spend a lot of time thinking about or analyzing what stocks or funds to invest in. That's a lot of work even for a 12% return.
You might want to look into investing in first deeds for real estate or being a hard money lender. Yes it sounds 'risky' ..but these loans are often made at 65-70% loan to value for the short term. Many investors are paying 2% points on the loan and usually about 11-15% or so in annual interest.
You would of course want to know the actual value and property you are backing though. But it seems like a good way to make a great return with less risk and work.
Yeah, and those 12% returns are a total myth because they never discuss the compounding rate of return. For example, with the S&P, you know how they always say the S&P over the last 20 years has returned 12% a year? Well, check out this CAGR calculator: CAGR of the Stock Market: Annualized Returns of the S&P 500
Put in 1/1/1994 until 12/31/2014 and you will see the CAGR comes out to 9.43%. Over this period of time, Long Term CDs were 5% for 5 year CDs and 10 year CDs averaged about 5.55% - 5.75%. Inflation averaged 2.3%.
These Stock Market "fans" will flat out lie to you and say CDs don't beat inflation so you have no choice but to ride the roller coaster/casino ride, don't believe that hype! Always do your own research and look at the data, you will see that Long Term CDs always have been Inflation and offer a safe, conservative and INSURED alternative to the roller coaster/casino ride for your long term passive investment portfolio.
Who the hell wants to go through this crap for 15 - 30 years just to earn an additional 1% - 2% a year CAGR over what Long Term CDs will earn? I know I don't! Life is stressful enough for goodness sakes.
You pretend if the 1-2% is nothing but the truth over the course of 15-30 years it's substantial.
Are you telling me people have only made handsome gains in RE & not lost a dime?
Every statement of yours relating to real estate has risk written over it. Your risk of not generating passive cash flow is 100% with 1 rental property but if you've a whole neighborhood of properties then the odds are always in your favor.
Diversification is key in RE as in the market.
Of course people have lost money. But there is also the benefit of being able to rent out a property during a down time. I know a lot of people did this in my area during the crash.
They thought why not just rent this asset out even though I want to sell...but I don't want to sell at these low prices. By holding off a bit they have no regained their equity and they likely made some good money renting out the house too..especially if they had bought a while back.
Good point , this is why sometimes view it better to own a multifamily property..if you have a 4plex for example..if one is vacant you still have 75% of your income.
Of think about an apartment building. One can also buy an apartment building and improve it and bring up the rents and make the property more valuable.
Also there are creative strategies to get even higher than market returns. Look at Airbnb..many landlords are benefiting. They can maybe rent that unit out for $100 a night..while the market rents might only be $1000 a month.
Let's say that fourplex is in an indemand area and people are building condos or townhomes in the area.
There is the possibility to develop the property and sell high end units or sell the property for a premium to a developer.
These are just some of the advantages that one has in real estate that are absent in the stock market.
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REPPED. And it's not just the Mainstream Press, it's also the Online Investment Communities as well. They always bash owning a business, owning real estate, or doing any type of active investments over riding the casino/roller coaster crap that is the Stock Market!
