ducky911
Recycles dryer sheets
- Joined
- May 18, 2010
- Messages
- 497
I believe that rising interest rates will actually increase the price of real estate. For at least a couple of years
I believe that rising interest rates will actually increase the price of real estate. For at least a couple of years
the age wave means that more and more baby boomers are retiring and this will steadily drive prices up (even if there is a dip) for 20 years.
In the short term higher interest rates hurt prices because of affordability. But higher interest rates also mean inflation (usually) so if they stick around that generally means higher prices, in the long run.
Think of how housing got short term killed by rates in late 70s then took off when rates moderated.
Why are you so concerned about the value of your residence?
Treat it as a home, not an investment.
I personally know dozens of landlords. None are losing money (except for tax "losses"). If renting long term truly was more profitable than owning, landlords would move their money and invest elsewhere.
So you are saying if a landlord is "unsuccessful", they will invest elsewhere, leaving only "successful" landlords - which is exactly the condition you say you know.
So perhaps survivor bias is at work in your circle of dozens?
I personally only know a few landlords. Several of them are now ex-landlords (they were "unsuccessful").
Edit:
Ya know what, nevermind, believe what you wish. You're welcome to think that everyone in the world moves every year and that landlords are all losing money because renting is cheaper than owning in your opinion. That's not going to impact the truth at all.
Remember this is a retirement forum.
Being tied to a mortgage while in retirement can severely limit your options.
So you are saying if a landlord is "unsuccessful", they will invest elsewhere, leaving only "successful" landlords - which is exactly the condition you say you know.
So perhaps survivor bias is at work in your circle of dozens?
I personally only know a few landlords. Several of them are now ex-landlords (they were "unsuccessful").
My guess is that the problem of that family you are helping is financially deeper than just the mortgage. A HELOC? Where did that money go? Do they have car payments, also? I had an elderly relative in a similar situation, but becoming a renter would not have solved the problem. The problem started about 40 years ago and did not improve with age.Remember this is a retirement forum.
Being tied to a mortgage while in retirement can severely limit your options.
Right now I'm trying to help an older relative of whose income 40% goes to mortgage/HELOC (property tax/insurance only about 10%)
Their financial situation would not be so dire had they chosen to limit the size/price of the home in which they "invested."
They also would have had more funds to deploy to investments with a much higher real rate of return than the residential real estate market, i.e. equities.
My guess is that the problem of that family you are helping is financially deeper than just the mortgage. A HELOC? Where did that money go? Do they have car payments, also? I had an elderly relative in a similar situation, but becoming a renter would not have solved the problem. The problem started about 40 years ago and did not improve with age.
I will bet many successful retirees carry mortgages into retirement. Obviously, a 40% of income payment(s) on mortgage/HELOC is extreme and limits options. But not 10%, 15% or 20%. Those payments are usually not more than rent.
In an area that you're not totally familiar with or have zero friends/family, I would rent. See how you like it and get familiar with the housing market in the process. Buys time in finding deals too. If a deal never materializes....keep renting.
I wholeheartedly agree.