Investing in houses is a bad idea?

[aslowdodge]

Originally Posted by Phil P

The markets been pretty crappy for the last 2 years while the RE market has been booming the last 2 years, but, like you said, you were still pulling good numbers just from the rent, better than the market, especially considering you have a manager taking some of the cut. Thanks for sharing!

I think areas like San Francisco did phenomenal the last few years. The Area I invested in was pretty flat. I bought for cash flow. It is going up in value a little, but I think it's been because investors have been rushing in and some have been over paying because they are over anxious newbies.
What made me switch was I had put my retirement into mutual funds. Many years later the value was less than what I had put in. I got frustrated and decided if my investment was going to flounder, then at least have it do so under my direction instead of watching it helplessly. I got lucky as I pulled out when I had gotten my money back and a little extra. Of course the market continued to go up for a bit after I did so I did beat myself up for getting out.
But in the end if there's anything I have learned is not to beat yourself up too badly on decisions you make. You do your best to educate yourself, learn from others, take action, and live with the fact you did your best at the time you did it.

[Fedupwiththis]

Originally Posted by Perma Bear

It could if you buy something like ibm, cvx, or gm that yields almost 4%.

unless those companies are giving you 4% a month you are not getting $4,000 every month off a $100,000 investment.

plus, even if they did return 4% every month you'd be living off it, which means your original investment of $100,000 will never grow. If you spend $100,000 on rental property you have the tenants paying your mortgage and you have inflation increasing the value of the home. So in 30 years the houses might be paid off, rents might be 3 times higher, and the value of the homes may have increased by 300%.. the $100,000 you invested in the market is still only $100,000 since you've been living off the 4% gain every month and inflation has worked against you making your 4% return on $100,000 worth less and less each year..

Not an argument saying being a landlord is better than stock investing.. just trying to do apples to apples in this example

[creeksitter]

You really should consider a 15 yr mortgage. That way you have an automatic "sinking fund" i.e. you can borrow on a 2nd when the big ticket items need to be replaced. Furnace, roof etc. Most people lack the discipline to build up a maintenance fund.

A duplex or 4 plax should cashflow with a 15 yr note in most of flyover land. Some single family homes as well.