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> I could, tomorrow, go buy a duplex, triplex, or quad with only 3% down and immediately rent out all units except the one I’m living in. But that's not someth
by jogjayr 9y ago
> I could, tomorrow, go buy a duplex, triplex, or quad with only 3% down and immediately rent out all units except the one I’m living in.
But that's not something an average person does. The poster I replied to was speaking of real estate wealth building solely in terms of buying a house, living in it till you retire, then selling it at an appreciated value and going live in Florida or wherever. (or alternatively change house every 10 years, rolling the appreciated property value into a bigger house every time)
What you're talking about is the work of a real estate investor, and is far more time-consuming and involved than buying a few index funds on Vanguard. Researching properties, finding and screening tenants, performing or managing repairs is a non-trivial amount of work.
You're trivializing the work of getting into landlording (maybe you're already doing it so you underestimate how much work it is for someone who has no experience doing it). If it really was that easy to earn better than index fund returns, everyone would be doing it and the returns would naturally come down.
> While not the sole way to build wealth, it’s one of the most accessible ways for anyone who isn’t already wealthy and intends to live somewhere more than a few years.
I don't even agree with that. To buy a single share of an ETF you need $50-100 max to spare. To put even 3% down on a property that you can rent out, you're talking thousands of dollars + decent credit for getting a mortgage on the property.
- toomuchtodo 9y agoDoing it already, I probably am glossing over the complexities of doing so. My apologies. My point is that almost always, real estate values in the US go up. So if you need to live somewhere, and the government is going to give you cheap money to do it, you’d be crazy not to. Yes, it’s not as easy as opening a Vanguard account and buying a share of a mutual fund. But it’s also not terribly difficult.
- seanmcdirmid 9y agoYou would have gotten killed in the 90s if you think real estate could just go up. You definitely have risk that prices might not be where you want them to be when you need the liquidity.
- toomuchtodo 9y agoAs with all investments, you must ensure you have sufficient capital to not be forced to liquidate your investment when it’s not advantageous to do so. Your market investments did fine if you could weather 2008. If you had to liquidate, you got wrecked.
- seanmcdirmid 9y agoSure, but the 90s was basically a nightmare decade for real estate. It’s one thing to weather one year, but an entire decade?
- toomuchtodo 9y agoI have yet to have a property I couldn't keep tenants in for at least a decade. Some even sign 2+ year leases if they plan on being in the area for a while. As long as the mortgage is covered, I can hold a property indefinitely.
- seanmcdirmid 9y agoYou were active in the 90s?
- toomuchtodo 9y agoI was through the global financial crisis, 2007-2009; I had some properties lose >$100k in value. I'm mid 30s, and have invested in real estate since my early 20s.
- seanmcdirmid 9y ago2007-9 isn’t really comparable to what went down in the 90s, especially for californian real estate after the Japanese had to liquidate from their binge, but all throughout the country as well.