4 ms·

I think you missed the entire point of the parent. Who cares about the resale value of the house? What you should care about is if it's a good rental or not.

I think you missed the entire point of the parent. Who cares about the resale value of the house? What you should care about is if it's a good rental or not. In the 'burbs, you'll have more stable families, people who care a bit more about their house, people looking for longer term places to raise a family in a good neighborhood, and you can get some great tenants. Now, in X years when it's dated and some things needing repairing, you've got cashflow to cover that, factored into your money model. Multiply that by a few properties, and even if the "investment" hasn't budged a dime in value, you're making money. At a scale where you can hire a management company to take care of the details for you, it's even simpler.

chrissnell 10y ago
You're talking about the rentals game which is another story altogether. I'm talking about buying property--for my personal use as a primary house--and making money on it. Your statements about the stability of the 'burbs are not a blanket truth. It entirely depends on the city and location. You may do well in a suburb of D.C. or San Francisco but a Las Vegas, Albuquerque, Denver, or San Antonio suburb is an entirely different story. In places where there is essentially infinite room to expand (i.e. all cities that aren't super-expensive), there's little reason for someone to buy your 10 year-old home when they can build a brand new one for the same price. Thus, some of the neighborhoods lose value and go to crap. This is especially true if the original construction was unremarkable and cookie-cutter. I also think you gloss over the difficulties of being a landlord. Great tenants are the exception, not the rule. There is good money to be made in the rentals game but the markets in which you can do this are limited and strongly favor the landlord who has owned for decades and bought in at 1970s prices (SF, LA, etc.). For most people in average American cities, the best you can hope for is to cover expenses and build a little equity. It's no slam-dunk for the average Middle America landlord.
- white-flame 10y ago
  Property that you buy for your own personal use is always going to be a money sink, and therefore shouldn't be looked at as a monetary investment. Sure, it might be an investment into your family or your lifestyle or whatnot, and that's a reasonable expense to manage for that reward. But it still is an expense. There's a chance that you'll come out 10s of K "ahead" at the end in selling your own family home, but divide that over the number of years you've lived there and subtract out all the repairs and related expenses, and it's not great in the vast majority of cases. Heck, subtract out all the interest you paid on your mortgage, and you're nearly guaranteed to be in the red, if you're not buying places for cash. The only way to look at a house as a monetary investment is to actually seek to make money directly off of it; namely flip it or rent it. Don't sit on it and think it's going to be a significant financial positive for you. Value it as your home, and as an expense you deem worth it.
NeutronBoy 10y ago
> I think you missed the entire point of the parent. Who cares about the resale value of the house? What you should care about is if it's a good rental or not. In the 'burbs, you'll have more stable families, people who care a bit more about their house, people looking for longer term places to raise a family in a good neighborhood, and you can get some great tenants. It really depends. In Australia, tax concessions and negative gearing often mean making an operating loss on your rental is preferable, as you can deduct those losses from any other taxable income sources.

chrissnell 10y ago

You're talking about the rentals game which is another story altogether. I'm talking about buying property--for my personal use as a primary house--and making money on it. Your statements about the stability of the 'burbs are not a blanket truth. It entirely depends on the city and location. You may do well in a suburb of D.C. or San Francisco but a Las Vegas, Albuquerque, Denver, or San Antonio suburb is an entirely different story. In places where there is essentially infinite room to expand (i.e. all cities that aren't super-expensive), there's little reason for someone to buy your 10 year-old home when they can build a brand new one for the same price. Thus, some of the neighborhoods lose value and go to crap. This is especially true if the original construction was unremarkable and cookie-cutter. I also think you gloss over the difficulties of being a landlord. Great tenants are the exception, not the rule. There is good money to be made in the rentals game but the markets in which you can do this are limited and strongly favor the landlord who has owned for decades and bought in at 1970s prices (SF, LA, etc.). For most people in average American cities, the best you can hope for is to cover expenses and build a little equity. It's no slam-dunk for the average Middle America landlord.

white-flame 10y ago
Property that you buy for your own personal use is always going to be a money sink, and therefore shouldn't be looked at as a monetary investment. Sure, it might be an investment into your family or your lifestyle or whatnot, and that's a reasonable expense to manage for that reward. But it still is an expense. There's a chance that you'll come out 10s of K "ahead" at the end in selling your own family home, but divide that over the number of years you've lived there and subtract out all the repairs and related expenses, and it's not great in the vast majority of cases. Heck, subtract out all the interest you paid on your mortgage, and you're nearly guaranteed to be in the red, if you're not buying places for cash. The only way to look at a house as a monetary investment is to actually seek to make money directly off of it; namely flip it or rent it. Don't sit on it and think it's going to be a significant financial positive for you. Value it as your home, and as an expense you deem worth it.

NeutronBoy 10y ago

> I think you missed the entire point of the parent. Who cares about the resale value of the house? What you should care about is if it's a good rental or not. In the 'burbs, you'll have more stable families, people who care a bit more about their house, people looking for longer term places to raise a family in a good neighborhood, and you can get some great tenants. It really depends. In Australia, tax concessions and negative gearing often mean making an operating loss on your rental is preferable, as you can deduct those losses from any other taxable income sources.