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Sorry for mistyping a word. Don't think I can edit it now. And yeah, I can't predict the future and I don't know the specific housing you're looking at so I ca
by GoldenRacer 4y ago
Sorry for mistyping a word. Don't think I can edit it now.
And yeah, I can't predict the future and I don't know the specific housing you're looking at so I can't know for a fact what those precise numbers will be. They are inline with historical and national averages though. I'm not just making them up out of no where and at the end of the day, any investment will have uncertainty.
Can you explain to me how purchasing housing with the intention of renting it out at 0.5% per month makes sense without either relying on high amounts of leverage or hoping it appreciates in value? That's the crux of my argument and I don't think that changes if you change the numbers I listed above by any reasonable amount. I mean even if you get property taxes, repairs, and property management costs down to 2% (a pretty lofty goal if you ask me), you're still only getting 4% ROI every year (and that assumes you have 0 vacancy ever). Why not just invest in government bonds at that point?
- lotsofpulp 4y ago> Can you explain to me how purchasing housing with the intention of renting it out at 0.5% per month makes sense without either relying on high amounts of leverage or hoping it appreciates in value? I do not disagree, the crux of real estate as an investment relies on being able to invest on margin without the lender being able to call back the loan, and of course, 1031 exchanges serving as a tax deferment vehicle. If not for those two benefits, people would be better off buying VOO on margin.