Stocks Vs. Investment Property

[Lucavia123]

Has anyone ever owned investment property? In particular single family and multifamily housing? Good investment to have? Better, worse or just different from stocks?

[mrmarket]

I just bought a condo in Somerville, MA. The rent less condo fees and taxes should generate about a 6% - 10% return. Any appreciation on the asset is a bonus. It's good to diversify.

[mimo_100]

I think that you can get involved in real estate in many ways. You can do what Ernie did and buy it and manage it yourself. Or you can buy a REIT. In any case the "secret" is the same - location, etc., etc. You have to have renters. People flock to vacation areas and resort areas.

Apartment owners in my area have benefited form an interesting phenomenon - natural gas and oil were discovered - oil companies bought up land making many farmers millionaires - oil cos brought in lots of people to get the oil and gas out + staff - apartments became scarce as occupancy climbed - gas employees rented homes - new apartments and hotels are going up. It is good to own rental property here for the next 15-20 years.

[Lucavia123]

Thanks for the advice guys. Rental property seems to have a lot of money making potential. Plus... if the economy goes south more people will be renting. If the economy goes up home prices will rise. ANd with interest rates being extremely low still this seems to be a win win. I'm still feeling cautious though as I have no experience in doing this.

[riverbabe]

My experience is somewhat limited to renting a house to a family member at fair market value. The expenses are RE taxes, "business" (house) (property) insurance, maintenance costs, depreciation. Although the rent is over $1200/month, at tax time my accountant always gleefully informs me, "Well, you made a little over $400 on the house this year." The depreciation has to be reclaimed (as a capital gain) if sold. I also have some high divi REITs that are fairly safe until interest rates change.

[Lucavia123]

I found a nice 4 unit building in WI.

Conservative rent is $500/unit for $2000/month. Renter pays utilities.
Holding back 10% of monthly rent for Property Management, 10% for Maintenance, 10% Vacancy, 10% for possible collection issues. - $800.00/month spent
Insurance - $50.00 / month (this is purely a guess based on internet research)
Taxes - $200.00 / Month
Mortgage - $527 / month ($104,000 loan at 4.5% for 30 Years)

Positive Cash Flow - $423.00 / Month

What am I forgetting to factor in?

[Louetta]

I just bought a condo in Somerville, MA. The rent less condo fees and taxes should generate about a 6% - 10% return. Any appreciation on the asset is a bonus. It's good to diversify.

Cramer talked this morning on CNBC about changes for the better in the Davis Square area of Somerville. There was a comment connecting him with Tufts tho his resume shows Harvard College and Law. Interesting that on a national broadcast he'd single out that area.

[billyjoe]

Lucavia, I'm sticking to stocks. You can get your money back fast. You don't have to cut the grass. Nothing breaks that you have to pay to fix. You don't have to pay to store them. They don't get unemployed or have a string of bad luck usually. You don't have to buy insurance on them. Stocks don't call you in the middle of the night with an emergency. You don't have to call the cops or go to court to get rid of them. Stocks don't spread bed bugs or cockroaches. Stocks don't pee or poop all over your house or fill it with a stench you can't get rid of. These are real problems you'll run into with rental property.It depends on when you were born. Older friends of mine born in the 1930's and 1940's could buy almost any property and make a killing., doubling their money in 5 years or less and they did it time after time. My wife and I bought our first houses in the late 1970's and early '80's. I lost big time on a duplex. She broke even on hers after 5 years. Interest rates reached 19% and unemployment was high. Made money on 1 fixer upper and my current house of 33 years if I'd ever sell. Just my opinion.

--------------------billy

[blindsquirrel]

My $0.02 on real estate as an investment. It is a good investment if you follow the basic rules of real estate like "Location, location, location" and know where the value is when you buy (ie - are you buying it because the price is low enough to make it a good value, or are you buying it because you are going to do something that will help out the value), and the most important rule IMHO is to treat it as a long term investment unless you are a contractor and know how to flip.

[Louetta]

I just bought a condo in Somerville, MA. The rent less condo fees and taxes should generate about a 6% - 10% return. Any appreciation on the asset is a bonus. It's good to diversify.

Cramer talked this morning on CNBC about changes for the better in the Davis Square area of Somerville. There was a comment connecting him with Tufts tho his resume shows Harvard College and Law. Interesting that on a national broadcast he'd single out that area.

[Louetta]

I just bought a condo in Somerville, MA. The rent less condo fees and taxes should generate about a 6% - 10% return. Any appreciation on the asset is a bonus. It's good to diversify.

Well, Large Person, as a property owner in Somerville I thought that you might be interested to know I attended a Yawkee Baseball League playoff game twixt the Somerville Alibrandis (Alibrandi is a barber) and the Stoneham Sabers. Good brand of American legion style ball and it was over in just two hours. Amazing what can happen when the pitchers work fast and throw strikes. Anyway, if you're ever in town and looking for something to do it might work. Details: http://yawkeybaseball.com/

[mrmarket]

Well, Large Person, as a property owner in Somerville I thought that you might be interested to know I attended a Yawkee Baseball League playoff game twixt the Somerville Alibrandis (Alibrandi is a barber) and the Stoneham Sabers. Good brand of American legion style ball and it was over in just two hours. Amazing what can happen when the pitchers work fast and throw strikes. Anyway, if you're ever in town and looking for something to do it might work. Details: http://yawkeybaseball.com/

There are a lot of great baseball leagues around. There aren't many walks because everyone is up there to swing a bat. My son plays in this league: http://www.bostonmabl.com/ He is on the Newton Dodgers.

[Louetta]

There are a lot of great baseball leagues around. There aren't many walks because everyone is up there to swing a bat. My son plays in this league: http://www.bostonmabl.com/ He is on the Newton Dodgers.

Figured you might know about this stuff. The game I saw was played at Bentley, nice facility. Earlier this summer I saw a high school all-star football game there put on by the Shriners. There's some cool stuff around if one looks and the effort they put in is tremendous.

[mrmarket]

Figured you might know about this stuff. The game I saw was played at Bentley, nice facility. Earlier this summer I saw a high school all-star football game there put on by the Shriners. There's some cool stuff around if one looks and the effort they put in is tremendous.

Boston is a great town..no doubt