Gatordoc50
Full time employment: Posting here.
REWahoo said:I think Gatordoc was referring to only successful real estate specuvestors...
People were buying dairy cows for the meat. I'm sorry their "investment" failed. Better luck next time.
REWahoo said:I think Gatordoc was referring to only successful real estate specuvestors...
We're holding on because:So I am asking myself the questions others have brought up. Do I want that much money tied up in one asset that is not liquid? What happens if it doesn't rent? Do I want this headache and this risk?
Has anyone on this board ever met a landlord with an actual exit strategy, other than "probate"?
We're holding on because:
(1) Landlording's not that bad, except when it is, and
(2) Our primary residence is in a good school district. Someday our daughter might want our grandkids to attend her old school (after the statute of limitations expires), so we'd put her family in the primary residence and we'd move into the rental.
And then, of course, the tax situation could get really interesting.
Or maybe none of that will happen. But in the meantime there's no compelling reason to sell.
Ouch. Good point. I wasn't thinking globally enough.Well, I did meet one whose exit strategy was "divorce" and a few whose exit startegy was "bankruptcy".
You're right, it's just my time and my labor... both of which the IRS claims are non-deductible, and to everyone else are worth only their barter value. At some point it begins to resemble "work", only with lower pay and fewer benefits.On a more serious note, why do you need an exit strategy at all? If you have brought properties which provide positive cash flow, why sell? Selling is expensive (transaction costs, taxes).
Sell take the profits (if any) and pay IRS and commission fee PERIOD. How is it different from selling a business, stocks, golds or any other assets
Of course, real estate investment is a business. You're in it to make money, just like you're go to work 8-9 hours a day to make money. Unless you're an expert in picking stocks and you buy gold and both of those investment appreciate then you "don't" really have to work or put money in the bank and get 1% in return.
sheehs1 said:Still don't think real estate is as liquid as some of those other assets you mentioned. If I want to sell my jewelry or gold there is a market. Want to sell stocks, it's a click on the computer or a phone call away. Any business with decent assets and generating a profit should sell rather well. We've had my parents home on the market since 2006 (over 5 years).
sheehs1 said:That may be arbelspy...but there have been no offers at any price. There are few if any buyers in this area.
For the most part on this entire real estate topic...I'm playing devils advocate with myself. Am struggling with the decision. At the end of the day.we all have to do what we are comfortable with.
There are many urban legends about the 3 AM toilet stoppage and having to get out of bed and clean the tenant's sewer lines.
1. I have never gotten THAT call.
2. I would call the plumber. At today's prices, I can afford it.
Those thoughts keep many, many people out of the rental game. More for the rest of us!
I have a few qualifiers for my real estate investments.
1. Close proximity to my home
2. Single family, 3 bd or more
3. House must sit on a unique irreplaceable lot
4. No HOA fees
5. Positive cash flow or extremely undervalued
6. A place I would live in myself
7. Appeals to high end renters
This still doesn't protect you from bubbles, unfortunately.
sheehs1 said:Realistically...we would have to carry the house for 9 plus months before it generated any income.
chinaco said:The part missing from this discussion is looking at the real books. Plus, it is a forward looking investment opportunity discussion (hopes and dreams) and not a backward look at what actually happened (i.e., the accounting books).
I am more of a hands-off passive investor (i.e., securities). That, of course, influences my opinion.
A common sense question is: Why that investment vs another? Will it yield a higher risk adjusted profit? On average... I doubt it.
For many (I suspect the reason is): they borrowed the money (leverage). It is a business venture and they hope the eventual ownership (and sale of the property) along with net income yields a profit in the end with + cashflow along the way.
But if they subtracted their sweat equity (i.e., paid themselves a fair salary for their work along the way) and subtracted that from the rental income... they would find out the actual return on investment is less than they think.
This is not a criticism of owning/managing/maintaining/renting... just an observation.
Has anyone on this board ever met a landlord with an actual exit strategy, other than "probate"?
Yep. Or should I say "Whinny..."
I think most landords view "diversification" as "having more than one property". While there may be lots of bargains around, the problem is the temptation to take on too much work, let alone leverage the debt. I don't know about you guys, but most of my landlording routine seems to be months of silence punctuated by hours of slavery. My feelings depend on which part of the cycle I'm currently experiencing.