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for sure.. especially when i think of the fact that over the last 4 years just the interest i gave up on the 300k i spent on the vacation house would have given us 12k a year for vacations and i would still have my 300k ... instead if we do sell ill have lost about 50k on the house plus that interest i gave up.
oh well!
It wasn't the concept but the stage in your life and the location. My nephew and cousin live in the Pocono's and yes it is beautiful but winter requires a specific lifestyle willingness.
[SIZE=2]% RETURN ON INITIAL EQUITY[/SIZE][SIZE=2]44.98%[/SIZE][SIZE=2]50.38%[/SIZE][SIZE=2]56.21%[/SIZE][SIZE=2]62.51%[/SIZE][SIZE=2]69.32%[/SIZE][SIZE=2]76.68%[/SIZE][SIZE=2]84.62%[/SIZE][SIZE=2]93.19%[/SIZE][SIZE=2]102.45%[/SIZE][SIZE=2]112.45%[/SIZE]
This is for one property bought in 2003. This was projected for first 10 years. Actual numbers have been much better. I also don't get calls in the middle of the night or worry about bad tenants and I don't paint!
these numbers mean nothing without the returns on cash flow . i can tell you going from 5,000,000 to 11,000,000 in appreciation in 30 years is only 2% a year.
i can tell you a conservative mix of equities,long term treasuries ,gold and cash have produced just under 1400% over 30 years or a little over 9% cagr.
i dont have to paint my portfolio. my portfolio does not call me up in the middle of the night to tell me the heats out and my portfolio doesnt move out in the middle of the night with my appliances.
Mathjak107
Where the numbers I posted what you were looking for? Sure beats 9% cagr if it's comparable.
[SIZE=2]% RETURN ON INITIAL EQUITY[/SIZE][SIZE=2]44.98%[/SIZE][SIZE=2]50.38%[/SIZE][SIZE=2]56.21%[/SIZE][SIZE=2]62.51%[/SIZE][SIZE=2]69.32%[/SIZE][SIZE=2]76.68%[/SIZE][SIZE=2]84.62%[/SIZE][SIZE=2]93.19%[/SIZE][SIZE=2]102.45%[/SIZE][SIZE=2]112.45%[/SIZE]
This is for one property bought in 2003. This was projected for first 10 years. Actual numbers have been much better. I also don't get calls in the middle of the night or worry about bad tenants and I don't paint!
this is what im seeing,i cant make heads or tails out of it.
this is what im seeing,i cant make heads or tails out of it.
Yeah, it's an excell format, years one thru 10. Per cent return on initial equity, 44.98%, 50.38%, 56.21%, 62.51%, 69.32%, 76.68%, 84.62%93.19%, 102.45%, 112.45%
Real estate as an alternative investment for retirees?
Either rental, or purchase foreclosure and fix up and sell?
Thoughts?
AAAAAARRRRRGH!
I HATE that phrase "fix it up"
Unless you're a contractor, or carpenter, or some sort of handyman, no way ever would I buy something to "fix it up" You have no idea what you're getting into.
Our first house was a steal---below-market, in sound condition, just needed some "fixing up" Ok, we bought it for 80K, sold it for 140K, pretty good deal, right? but we spent 10 years "fixing it up" while we were living in it. Look, there reaches a point one simply wants to live, not "fix up" all the time. we never had the house the way we wanted, it was always a work-in-progress. Most of the appreciation was market appreciation, BTW. all our improvements did not contribute to the increase much.
Ok, if you're married to a guy like that Holmes with the TV show (nice build, that guy), then, maybe. But just what do you want, a place to live, or an ongoing hobby/pain?
Do remember, as you round the bend into retirement, you aren't getting any younger. Hopefully you're in fine health now, but you can't afford for your investments to be dependent on your ability to "fix it up" at retirement age.
Hey, if you want to invest in real estate, have you considered a REIT?
these numbers mean nothing without the returns on cash flow . i can tell you going from 5,000,000 to 11,000,000 in appreciation in 30 years is only 2% a year.
Agree. There are so many variables here, I wouldn't count on - especially with the global economy devaluing US property via reduced wages of its citizens. As mentioned, liquidity, economic conditions. For a 2% return, I'd rather have cash. For sure not worth the aggravation unless you have property managers as a buffer. Those great returns mentioned upthread - yeah, I had those too - on paper - when everything was leveraged. 50%-100% a year, every year during the 70s, and then again in the 90s.
Quote:
Originally Posted by mathjak107
i dont have to paint my portfolio. my portfolio does not call me up in the middle of the night to tell me the heats out and my portfolio doesnt move out in the middle of the night with my appliances.
ROFLMAO - you're getting funnier, mathjak. I can hardly wait for the next build on this great observation.
Quote:
Originally Posted by mathjak107
for sure.. especially when i think of the fact that over the last 4 years just the interest i gave up on the 300k i spent on the vacation house would have given us 12k a year for vacations and i would still have my 300k ... instead if we do sell ill have lost about 50k on the house plus that interest i gave up.
oh well!
Real estate ownership in certain areas is a luxury these days. Property values declining here still and home needs constant maintenance to the tune of 10K/year for the next few years. Not moving but it isn't an investment and may not be for at least 10 years. Now if I had a buyer and wanted to move, I could probably go somewhere and pay cash for a house at a fraction of the 'value' here.
Last edited by Ariadne22; 07-18-2011 at 07:13 PM..
On the house I am currently "fixing up" (with the aid of my contractor son, whom I pay), in two years' time I will net 15-20%, because of the area. I guess that would not be true everywhere. And you do factor in baseline COL, as you have to live somewhere. I actually enjoy the transformation process, and I'm careful not to overimprove in any way. No granite countertops here.
you see a lot of talk of buying property through your ira. dont fall for these pitches to buy real estate thru your ira. this can be a horrible deal. all the benefits of buying a property go right out the window
You need a special trustee to handle all transaction
Anything you spend on the property, such as repairs, renovations ,etc have to be done, by only retirement money.
no depreciation allowance
Any money used for the property and its maintaince has to come from the trustee using the ira.
Unless you’re paying cash for the property, It very hard to impossible to get a loan.
If you get a loan, all payments have to be paid from the tax deferred account and you cant write them off your taxes.
All fees, assessments, property tax etc. have to be paid from the tax deferred account, you cant write them off on your taxes.
If you turn the property into a rental, you cant touch the rental income without it being considered a withdrawal.
the worst part is upon sale it does not qualify for the personal residence exclusion.
Last edited by mathjak107; 07-19-2011 at 02:58 AM..
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