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5 years ago was a great time to invest in real estate. Today is probably okay, though prices have risen dramatically across the board (even the cities that got

5 years ago was a great time to invest in real estate. Today is probably okay, though prices have risen dramatically across the board (even the cities that got crushed in the recession have risen past pre recession levels), and rates are rising. Returns are getting compressed. Still good deals out there, but the risk/reward profile is shifting in the wrong direction. For more on real estate investing, I write a lot on the topic here: https://ramenretirement.com/ https://ramenretirement.com/

mephitix 8y ago
I guess I should rephrase - now is a good time compared to the foreseeable future? As in, next couple of years it will be a worse time. I actually bought a house 5 years ago, and I really feel I totally lucked out. Back then though, the fear of rising interest rates scared me into buying. Like you, I don't expect those type of returns with any investment I make now... but I was thinking about diversifying my finances, and moving money away from stocks into property real estate. I know that I'll have to be much more diligent about finding the right market/deal. I'm using Bigger Pockets at the moment which is quite an amazing resource. Thanks for pointing me to your site too.
- ramen-san 8y ago
  Yes - if rates continue rising, along with prices, then returns will get compressed. Check out my analysis of that dynamic here: https://ramenretirement.com/2018/05/16/interest-rate-impact/ https://ramenretirement.com/2018/05/16/interest-rate-impact/ Doesn't mean you shouldn't invest - just figure out what sort of returns you're willing to accept (along with the corresponding risk / cushion you need), and hold that line when you run your diligence. FWIW, I think you can still find single family investments in the midwest that will generate 8%+ cash on cash returns (after fully accounting for all direct, and reserved expenses). That's still a pretty good return, but getting harder to find. It's hard to say when the market will soften or correct, so a dollar-cost-averaging approach to buying RE is probably a good idea (i.e. buy a rental property every quarter, or every half year.). Given that pretty much everything is going right in the economy right now, my investment stance is more conservative. It's not a bad time to buy, but it's definitely not a fire sale. Bigger Pockets is a great resource. Drop me a line if you ever want to chat in more detail. I've gone pretty deep in the whole space, and have a background in investing and finance.

mephitix 8y ago

I guess I should rephrase - now is a good time compared to the foreseeable future? As in, next couple of years it will be a worse time. I actually bought a house 5 years ago, and I really feel I totally lucked out. Back then though, the fear of rising interest rates scared me into buying. Like you, I don't expect those type of returns with any investment I make now... but I was thinking about diversifying my finances, and moving money away from stocks into property real estate. I know that I'll have to be much more diligent about finding the right market/deal. I'm using Bigger Pockets at the moment which is quite an amazing resource. Thanks for pointing me to your site too.

ramen-san 8y ago
Yes - if rates continue rising, along with prices, then returns will get compressed. Check out my analysis of that dynamic here: https://ramenretirement.com/2018/05/16/interest-rate-impact/ https://ramenretirement.com/2018/05/16/interest-rate-impact/ Doesn't mean you shouldn't invest - just figure out what sort of returns you're willing to accept (along with the corresponding risk / cushion you need), and hold that line when you run your diligence. FWIW, I think you can still find single family investments in the midwest that will generate 8%+ cash on cash returns (after fully accounting for all direct, and reserved expenses). That's still a pretty good return, but getting harder to find. It's hard to say when the market will soften or correct, so a dollar-cost-averaging approach to buying RE is probably a good idea (i.e. buy a rental property every quarter, or every half year.). Given that pretty much everything is going right in the economy right now, my investment stance is more conservative. It's not a bad time to buy, but it's definitely not a fire sale. Bigger Pockets is a great resource. Drop me a line if you ever want to chat in more detail. I've gone pretty deep in the whole space, and have a background in investing and finance.