Quote: (09-20-2017 12:14 PM)911 Wrote:
Real estate is a superior investment today because of interest rates being at historic lows.
Quote: (02-16-2014 08:16 PM)T and A Man Wrote:It will, eventually, and usually well before the end of the mortgage. You are locking in those rates, while rents rise, at rates faster than inflation in many markets like SF, NYC, Paris, London etc. Renting in the long term doesn't make sense.
Could the estimated rental value cover the mortgage?
Quote: (02-16-2014 02:00 PM)buja Wrote:
This is how the corporate/government school power structure "educates" us to stay on the plantation.
I don't know why anyone would get a 30 year mortgage on non-income producing property.
Most people don't realize that $100,000 borrowed for 30 years at 8% interest is really 160% interest when compounded.
Actually, it's the opposite. Banksters want to drain your savings, keep you a debt slave and a consumer slave. Buying property and investing early is your ticket to freedom. That 27yo Londoner did very well to buy property and focus on his career. He will build up his skillset and experience, which will allow to take a few months off between jobs every few years while still being on the right track.
He is not stuck in his suburb, he will be able to rent it out and cover his mortgage next decade, and by his 40s or 50s, he will have owned the property outright.
And it's more like 3% than 8% now, huuuge difference, because the real inflation rate (which is underreported) is at least as high, so you are effectively acquiring a safely leveraged asset almost interest-free, while also hedging for any future rises in interest rates and inflation.
Thing is though 911, the 27 year old got a little lucky and bought in a rising market. Also, by his own admission, he makes some money on it but is living a simpler lifestyle since he's not making a ton of money on it. He's happy and has freedom so ultimately that's the only thing that matters thus I'm only making this point from a purely financial perspective. The other thing too is that unless he has a fixed rate mortgage for his entire term, future interest rate increases will eat into his income. Along with taxes and costs of maintenance and insurance, he could easily see his profit dwindle significantly.
I will say though that the idea of buying a condo in the center of a big city and then deciding to rent it out when and if your life circumstances change is still better than what I did by buying, no, building, a big house in the suburbs. Talk about a money pit. I did some calculations and I figured that if I had rented a house for that same 7 years that I owned that house that I would have come out ahead by about 200K. This is after factoring in mortgage, property taxes, insurance, maintenance (I could not believe how much goddamn money I spent on maintenance and repairs for a new construction) and the pathetic amount of money I netted for the house after I sold it during my divorce.
I'm convinced now that the only way to own property is if it generates income. Multi units are the best since you can live in one and rent the others out. Then one day, if you decide to move to Chiang Mai to work on your PUA blog, you can rent your unit out, have a property manager take care of it and have some quasi passive income. These days with the rise of crowdfunding real estate investment sites like Fundrise and Realtyshares, you can invest in real estate and get 8-12% income generation without the hassle of physically owning property and this where I've started to put some of my money. Of course I've also started buying bitcoins now as well which should make these other investments irrelevant, right?