[bledsoe3]

Originally Posted by Reno Joe

I am not risking my future and then having the Canadians dump thousands of condo units on the market and I wake up one day and find it is worth 50% of what I paid for it.

I don't know what you pay for rent, but if you purchased one of those condo's right in the middle ($179K 20% down) your principle and interest payment would be about $726. Add $150 for taxes and insurance and $150 HOA (just guessing on these numbers) and you're buying your own place for $1026. If the value goes down 50% in 15 years you have the same amount of equity as if you're renting. None. But your payment has never gone up. If the value in 30 years is still 50% of the purchase price you have ~$90K equity and no mortgage payment. If you rented the entire time you still would not have anything to show for your 30 years of payments to your landlord (who now has $90K equity and cash flow every month).

Think long term.

[vtvette]

Originally Posted by bledsoe3

I don't know what you pay for rent, but if you purchased one of those condo's right in the middle ($179K 20% down) your principle and interest payment would be about $726. Add $150 for taxes and insurance and $150 HOA (just guessing on these numbers) and you're buying your own place for $1026. If the value goes down 50% in 15 years you have the same amount of equity as if you're renting. None. But your payment has never gone up. If the value in 30 years is still 50% of the purchase price you have ~$90K equity and no mortgage payment. If you rented the entire time you still would not have anything to show for your 30 years of payments to your landlord (who now has $90K equity and cash flow every month).

Think long term.

One of the key's here is that the mortgage payment stays the same but rent is going to continue to increase. You have to consider the opportunity costs of that money as well.

[ScoopLV]

Another key is that when the homeowner is having a run of good financial months, he or she can pay down the principle of the mortgage and be free and clear sooner.

Renting is great for landlords. Everyone else takes a 100% loss.

[BBMW]

Are you cash flow positive on all your properties? I'm sure there are a lot of investors around the valley who aren't.

Originally Posted by airics

That's why my tenants are paying for my homes..... they just keep throwing money away!

[BBMW]

Generally speaking, the math on renting vs buying is easy. If you're monthly expenses for buying a house are higher then the rent for the equivalent, then rent. Otherwise buy. For a while in Vegas, it was a stupid no brainer to buy. With prices going up, it may not be so much any more. It all comes down to the numbers.

Oh, and if your paying cash (part or all), you have to figure the lost interest/cap gains from other investments that you could be making, into the rent vs buy calc.

Originally Posted by ScoopLV

Another key is that when the homeowner is having a run of good financial months, he or she can pay down the principle of the mortgage and be free and clear sooner.

Renting is great for landlords. Everyone else takes a 100% loss.

[Scott456]

Originally Posted by BBMW

Generally speaking, the math on renting vs buying is easy. If you're monthly expenses for buying a house are higher then the rent for the equivalent, then rent. Otherwise buy. For a while in Vegas, it was a stupid no brainer to buy. With prices going up, it may not be so much any more. It all comes down to the numbers.

Oh, and if your paying cash (part or all), you have to figure the lost interest/cap gains from other investments that you could be making, into the rent vs buy calc.

near zero interest at the bank now, and probably in the next couple years.
any other investment involves risk, and can result in lost.

[Scott456]

Originally Posted by Reno Joe

I don't know if one is underpriced or one is overpriced. Seems that the Canadians are snapping up everything on the market for asking price. But on the other hand, some condos are sitting empty. Until I know what is worth what, I am not risking my future and then having the Canadians dump thousands of condo units on the market and I wake up one day and find it is worth 50% of what I paid for it.

I think you are missing one aspect of Canadians buying activities, people with a lot more money can certainly afford the risk of loosing 50% value of a $200K condo, which is $100K. They pay cash.
But you don't have those equity and need to get a mortgage.
You are not at the same financial standing of those Canadians.

[lvoc]

Originally Posted by Scott456

I think you are missing one aspect of Canadians buying activities, people with a lot more money can certainly afford the risk of loosing 50% value of a $200K condo, which is $100K. They pay cash.
But you don't have those equity and need to get a mortgage.
You are not at the same financial standing of those Canadians.

I have had a few Canadian clients. Mostly very much on the frugal side. Looking for $50K or $80K condos. Generally as seasonal second homes at least eventually. Reasonable people who do not over pay but do have cash.

They are not significant in the over all market.

[BBMW]

And investing in RE doesn't involve risk?

Originally Posted by Scott456

near zero interest at the bank now, and probably in the next couple years.
any other investment involves risk, and can result in lost.

[jjameson922]

Why hasn't anyone suggested getting a really competent real estate person who will give good advice and back it with the comps and figures they are able to obtain? Buying a house does not have to be a game using a crystal ball or a wild walk thru a dark woods.