6 ms·

You don't say where you are based, but you are going to get a shock if you think interest rates are going to stay on the floor. If you can get a genuine 25-year

You don't say where you are based, but you are going to get a shock if you think interest rates are going to stay on the floor. If you can get a genuine 25-year fixed rate, great, but you need to tread carefully here. Brexit, Trump, EU sentiment, China trying to deal with their own problems, they're all pointing to the same way: devalued currencies. Where they start, rising interest start to follow. I'd also be wary of assuming commercial real estate was a lock-in. I've heard horror stories. I'm glad it's working for you right now, I'm just saying: make sure you tread carefully and have done your research before you start gearing up.

lowpro 10y ago
This isn't necessarily true. The US dollar is actually increasing in value as people want their money to be safe. If Trump does bring back American jobs, meaning less jobs in Asia, the dollar buy will continue, depressing Asia and strengthening the US for now. But you're right, the OP definitely needs to tread lightly with property and the contracts. The devil is always in the details.
- threeseed 10y ago
  The unemployment rate in the US is 4.9% which is basically full employment. Now sure there are a number of people who don't report and those who wish to work more. But I don't think it's going to be easy to get those people back into work. Most are either in industries that are disappearing due to automation. Or they lack the skills/training to re-educate themselves. And without tariffs (which will impact exports) there is little chance of US being all that competitive in most industries that compete with Asia (I assume you actually mean China).
  - FrancoDiaz 10y ago
    4.9% isn't even close to being the real unemployment rate.
    - StevePerkins 10y ago
      Nor does it reflect the stagnant/decreasing income of the jobs that people DO have.
      - enraged_camel 10y ago
        Not to mention hordes of underemployed college grads.
  - 551199 10y ago
    You want to look into participation rate. Compare participation and unemployment rate over time and it's clear '4.9%' is pure fallacy.
  - bb611 10y ago
    Unemployment is only 4.9% because the participation rate dropped 3% points in the last 10 years: http://data.bls.gov/timeseries/LNS11300000 http://data.bls.gov/timeseries/LNS11300000 That's close to 10 million people who have stopped looking for jobs who we would otherwise expect to have them.
    - krakensden 10y ago
      Baby Boomers should be leaving the labor market though.
      - icebraining 10y ago
        It's not just old people: "in 2000, if you happened to be a 20-year-old man with less than a Bachelor's Degree--and when I say 20-year old, I mean in their 20s--21 to 30. About 8% reported not working at all during the prior year. That number, today: About 18%." http://www.econtalk.org/archives/2016/11/erik_hurst_on_w.html http://www.econtalk.org/archives/2016/11/erik_hurst_on_w.htm...
    - berdario 10y ago
      But the participation rate can float for a few different reasons http://qz.com/286213/the-chart-obama-haters-love-most-and-the-truth-behind-it/ http://qz.com/286213/the-chart-obama-haters-love-most-and-th... (clickbaity headline, but the contents seem sound)
  - bigboris 10y ago
    Roughly 100 million people in the US are out of work or no longer looking for work. That's approx a third of the population. "4.9% is basically full employment" is a terribly naive statement. The trend clearly shows things getting worse, not better. https://fred.stlouisfed.org/graph/?g=4CRu https://fred.stlouisfed.org/graph/?g=4CRu
antr 10y ago
The all-in fixed rate is 2.10%, and let me repeat: fixed. Not LIBOR + spread + you need to have you savings account with us + you need to buy my home insurance, etc. I don't understand why you say "tread carefully"... when it's the bank bearing all the IRS cost. Plot any LIBOR curve, and you'll see that the bank is the one to lose here. Banks are fighting for customers, and cheap loans and mortgages is the game they are playing. I could go into more detail, but given that I have a 12 month DSRA account in place, I'm quite happy with the investment.
- brianwawok 10y ago
  Don't you lose if you can't find Tennant's for your property? Or do you plan to just go bankrupt if that happens?
  - antr 10y ago
    > but given that I have a 12 month DSRA account in place, I'm quite happy with the investment.
    - brandon272 10y ago
      What happens if you can't find tenants for 12+ months? I've seen many commercial properties sit barely occupied for years.
      - antr 10y ago
        Worst case scenario, pay the mortgage with my salary.
        brianwawok 10y ago
        So that seems a pretty risky investment to me. Only a few percent profit for the risk of eating a giant monthly bill.
        10y ago

lowpro 10y ago

This isn't necessarily true. The US dollar is actually increasing in value as people want their money to be safe. If Trump does bring back American jobs, meaning less jobs in Asia, the dollar buy will continue, depressing Asia and strengthening the US for now. But you're right, the OP definitely needs to tread lightly with property and the contracts. The devil is always in the details.

threeseed 10y ago
The unemployment rate in the US is 4.9% which is basically full employment. Now sure there are a number of people who don't report and those who wish to work more. But I don't think it's going to be easy to get those people back into work. Most are either in industries that are disappearing due to automation. Or they lack the skills/training to re-educate themselves. And without tariffs (which will impact exports) there is little chance of US being all that competitive in most industries that compete with Asia (I assume you actually mean China).
- FrancoDiaz 10y ago
  4.9% isn't even close to being the real unemployment rate.
  - StevePerkins 10y ago
    Nor does it reflect the stagnant/decreasing income of the jobs that people DO have.
    - enraged_camel 10y ago
      Not to mention hordes of underemployed college grads.
- 551199 10y ago
  You want to look into participation rate. Compare participation and unemployment rate over time and it's clear '4.9%' is pure fallacy.
- bb611 10y ago
  Unemployment is only 4.9% because the participation rate dropped 3% points in the last 10 years: http://data.bls.gov/timeseries/LNS11300000 http://data.bls.gov/timeseries/LNS11300000 That's close to 10 million people who have stopped looking for jobs who we would otherwise expect to have them.
  - krakensden 10y ago
    Baby Boomers should be leaving the labor market though.
    - icebraining 10y ago
      It's not just old people: "in 2000, if you happened to be a 20-year-old man with less than a Bachelor's Degree--and when I say 20-year old, I mean in their 20s--21 to 30. About 8% reported not working at all during the prior year. That number, today: About 18%." http://www.econtalk.org/archives/2016/11/erik_hurst_on_w.html http://www.econtalk.org/archives/2016/11/erik_hurst_on_w.htm...
  - berdario 10y ago
    But the participation rate can float for a few different reasons http://qz.com/286213/the-chart-obama-haters-love-most-and-the-truth-behind-it/ http://qz.com/286213/the-chart-obama-haters-love-most-and-th... (clickbaity headline, but the contents seem sound)
- bigboris 10y ago
  Roughly 100 million people in the US are out of work or no longer looking for work. That's approx a third of the population. "4.9% is basically full employment" is a terribly naive statement. The trend clearly shows things getting worse, not better. https://fred.stlouisfed.org/graph/?g=4CRu https://fred.stlouisfed.org/graph/?g=4CRu

antr 10y ago

The all-in fixed rate is 2.10%, and let me repeat: fixed. Not LIBOR + spread + you need to have you savings account with us + you need to buy my home insurance, etc. I don't understand why you say "tread carefully"... when it's the bank bearing all the IRS cost. Plot any LIBOR curve, and you'll see that the bank is the one to lose here. Banks are fighting for customers, and cheap loans and mortgages is the game they are playing. I could go into more detail, but given that I have a 12 month DSRA account in place, I'm quite happy with the investment.

brianwawok 10y ago
Don't you lose if you can't find Tennant's for your property? Or do you plan to just go bankrupt if that happens?
- antr 10y ago
  > but given that I have a 12 month DSRA account in place, I'm quite happy with the investment.
  - brandon272 10y ago
    What happens if you can't find tenants for 12+ months? I've seen many commercial properties sit barely occupied for years.
    - antr 10y ago
      Worst case scenario, pay the mortgage with my salary.
      - brianwawok 10y ago
        So that seems a pretty risky investment to me. Only a few percent profit for the risk of eating a giant monthly bill.
        10y ago