3 ms·

In 2009 during the real estate crisis, I purchased 2 properties for rentals for fairly cheap. They had depreciated by about 35% at the time when I purchased. Th

by cronix 8y ago

In 2009 during the real estate crisis, I purchased 2 properties for rentals for fairly cheap. They had depreciated by about 35% at the time when I purchased. They've since almost doubled in value ($120k=>~$220k ea) and have had a nice little cashflow ever since. I put down 20%. My mother did the same when she retired and purchased 6 outright and 2 mortgaged. She lives comfortably in retirement on a $11k/mo income, which will not ever go down since it's not in a "retirement account." She can also will them to her children. There are many advantages for real estate investments if you can hold onto them, especially if you can pick them up below regular market conditions. That's just money in the bank as the prices will increase to regular levels again.

pureliquidhw 8y ago
Assuming your mother and yourself each have your own residences, your 2 households own 12 properties. Your situation isn't unique. Investors over the past decade went on a massive buying spree that has reduced the pool of affordable, available homes. Assuming you put down 20k on the 100k homes, you've returned 500%. That is incredible, but also fairly common story from the past few years. "I made it rich with real estate!" "How?" "Easy, buy at a historically low price." The word is out, it's not a secret to success anymore. There is a pile of money out there waiting to invest in under-priced homes. This drives prices up! Because of this, a recession will not trigger a home price drop. Property values will likely remain stable/inflated until something happens to break whatever math it is that keeps investors invested. It's the massive stockpile of homes investors gobbled up in 2009-12 that need to be released back to the market. It is a self-perpetuating cycle, people rent a home because home prices are too high due to investor held inventory. Then investors keep renting their asset out because renters don't graduate to buying. I could be way off, or have missed something obvious, but I don't think real-estate is going to be the big moneymaker form this recession unless something happens to dramatically increase inventory in places with jobs.

by cronix 8y ago

pureliquidhw 8y ago

Assuming your mother and yourself each have your own residences, your 2 households own 12 properties. Your situation isn't unique. Investors over the past decade went on a massive buying spree that has reduced the pool of affordable, available homes. Assuming you put down 20k on the 100k homes, you've returned 500%. That is incredible, but also fairly common story from the past few years. "I made it rich with real estate!" "How?" "Easy, buy at a historically low price." The word is out, it's not a secret to success anymore. There is a pile of money out there waiting to invest in under-priced homes. This drives prices up! Because of this, a recession will not trigger a home price drop. Property values will likely remain stable/inflated until something happens to break whatever math it is that keeps investors invested. It's the massive stockpile of homes investors gobbled up in 2009-12 that need to be released back to the market. It is a self-perpetuating cycle, people rent a home because home prices are too high due to investor held inventory. Then investors keep renting their asset out because renters don't graduate to buying. I could be way off, or have missed something obvious, but I don't think real-estate is going to be the big moneymaker form this recession unless something happens to dramatically increase inventory in places with jobs.