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....so is it any bank that does asset based lending or is it margin? And RE in a self-directed IRA is most commonly done as an alternative and not a primary strategy. It's done, but not by most people so the example is obscure and far flung.
C'mon, man!! You KNOW there is more money lent for RE than for equities. That is one advantage RE has over equities for the majority of us and why I drew the comparison.
The redfin and zillow comps keep going up. My rental houses are still churning out cash seemingly oblivious to the vicissitudes of the stock market.
I think that is really cool.
It is cool
People will still need jobs and homes. So long as they have jobs, they will spend money on housing.
I was hammered in the recession though. My rentals were located between two huge casinos, when the recession hit, they both went through a series of lay-offs and all my tenants lost their jobs. Without tenants paying rent I was screwed.
So long as your tenants have jobs, they will likely continue to pay rent. If jobs in your city dry-up, you may need to lower your rent to keep tenants.
....so is it any bank that does asset based lending or is it margin? And RE in a self-directed IRA is most commonly done as an alternative and not a primary strategy. It's done, but not by most people so the example is obscure and far flung.
C'mon, man!! You KNOW there is more money lent for RE than for equities. That is one advantage RE has over equities for the majority of us and why I drew the comparison.
not all banks do asset based lending . most sell the mortgages and now have strict income requirements including how they treat rental income which is usually discounted like portfolio income would be on asset based lending
The redfin and zillow comps keep going up. My rental houses are still churning out cash seemingly oblivious to the vicissitudes of the stock market.
I think that is really cool.
Real estate may not mirror stocks perfectly but give it some time and they are both on the same path. If stocks take a dive this year, then real estate will also take a dive by next year.
People will still need jobs and homes. So long as they have jobs, they will spend money on housing.
I was hammered in the recession though. My rentals were located between two huge casinos, when the recession hit, they both went through a series of lay-offs and all my tenants lost their jobs. Without tenants paying rent I was screwed.
So long as your tenants have jobs, they will likely continue to pay rent. If jobs in your city dry-up, you may need to lower your rent to keep tenants.
in 2008 rents fell here . in fact landlords were offering incentives like get 13 months and pay 12 months rent
Real estate may not mirror stocks perfectly but give it some time and they are both on the same path. If stocks take a dive this year, then real estate will also take a dive by next year.
Even if RE prices were to track along with the market, the effect is reduced and when you get over to rental incomes it should be reduced again.
If an area has people, they need homes to live in. The rent cash flow should continue.
Real estate may not mirror stocks perfectly but give it some time and they are both on the same path. If stocks take a dive this year, then real estate will also take a dive by next year.
The reason I doubt that is that employment and incomes are rising. And Millennials are causing household formation to stiffen up hugely. Real Estate may have plateaued in some areas, but it's as fundamentally sound as any element of our economy.
It'd take an event on par with the credit crisis to cause RE to crater like stocks have lately, and the stock market jitters look to be short lived and irrational. Maybe a war or an (god forbid) impeachment.
I OP'd to point out how the two largest asset classes can be so separate. It's truly a wonder how one can go absolutely bonkers while the other doesn't flinch.
I would say most people should diversify against risk. It's easier to diversify with funds than it is by buying property.
diversification is often over rated , everything gets sold in an equity bear market , a good single property in the right place is almost always a good asset and often much better than a stock portfolio which you have zero control over
" diversification " is often little more than market jargon
yes , i agree . for mom and pop getting stuck with a bad tenant or no tenant can be quite painful because real estate can be leveraged . those rental payments stopping for a reason can be quite painful .
real estate is not liquid either . you can't go to the super market and spend the living room .
real estate can be like having a job too , and not passive ,especially when things go wrong .
so one is not a replacement for the other . they work together in a well diversified portfolio . in retirement we want no real estate and only passive liquid investments supporting us . we sold off just about everything we could . we even have the two last remaining co-op apartments with original stabilized tenants up for sale for .50 cents on the dollar .
" liquid " is the most over used term in investing , so what if a house is less liquid than equities ! , a good house in the right place will sell and during recessions stocks fall more than housing in most cases , 40% drops in stocks happen fairly often , they hardly ever happen with housing
so what if you have to wait three months to sell a good house rather than a second for stocks , if you need the money that quick , you have other problems
I don't know about that one, you need a lot of money to have rental properties. You can invest in the markets with almost nothing. Ideally you want to be handy if you're investing in RE, paying an electrician $200 to change a $1 light switch will add up fast.
I find getting a good deal in the RE market easier vs the stock market. I'm sure even 1 month ago there were some very cheap stocks, but knowing how to spot them is beyond me and most of us. Finding an ugly house to fix up that will result in a gain is a lot easier for me. If you're willing to work, take on leverage and live in the right market you can beat the markets, but it's far from passive.
if you have nearly nothing to invest in the stock market , you will almost always never have anything either bar a very modest retirement pension , a fraction of people make fortunes from small amounts in stocks
big money controls the stock market , real estate is a lot more friendly to the little guy from a personal control POV , it does involve more work of course but a property costing a $100k ( bought with cash ) can deliver a yield multiples of what investing the same in the stock market can , i know $100 k will only get you somewhere relatively unimportant but folks live everywhere and pay rent
neither are the best way to invest capital in terms of return , i would say that is investing in a business but many people fail at that too , making a lot of money is very hard unless you start off with plenty
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