Why are you NOT buying rental properties?

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SovereignInvestor
Posts: 494
Joined: Mon Aug 20, 2018 4:41 pm

Re: Why are you NOT buying rental properties?

Post by SovereignInvestor » Mon Jan 13, 2020 1:27 pm

I won't buy for same reason I generally avoid individual stocks. It has more risk although some individuals may well do very well with RE either due to luck or good skill especially at doing repairs and renovation to boost values and/or recognizing and capitalizing on local market inefficiencies.

But for me since I'm not super handy and returns in my local area wold be low to low rental yield rates, I don't buy any investment RE. Also any gains need to be in excess of implied pay for it being additional "work".

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JAZZISCOOL
Posts: 472
Joined: Sat May 18, 2019 11:49 am
Location: Colorado - 5,700 ft.

Re: Why are you NOT buying rental properties?

Post by JAZZISCOOL » Mon Jan 13, 2020 2:41 pm

flaccidsteele wrote:
Mon Jan 13, 2020 1:05 pm
stoptothink wrote:
Mon Jan 13, 2020 10:18 am
JAZZISCOOL wrote:
Mon Jan 13, 2020 10:13 am
I sense the post-2008 financial crisis presented a once-in-a-lifetime RE opportunity for some investors who had the dry powder. But I agree there are various strategies now if one wants to pursue RE.
+1. Unfortunately I, and most of the people I know personally who have invested in residential real estate, were on the wrong side of that once-in-a-lifetime opportunity.
Back when I was buying, we (Canadians) were the largest foreign buyers of US RE

Most were snowbirds looking for winter homes, but I was in my 30s and wanted cash flow. Specifically cash flow in US$ (since my expenses are in C$). I couldn't care less about a winter home
JAZZISCOOL wrote:
Mon Jan 13, 2020 10:34 am
Agree. And psychologically, even if they had the capital to invest, many investors IMO would not have had the ability to pull the trigger at that time (or at least I don't think I would have) after the horrible equity losses in the public markets.
Canadians and other foreigners weren't as psychologically invested in US RE at the time. So we bought with less anxiety. We just saw 1) B class property in B class locations priced at less than replacement value - everywhere and 2) our currency being as strong as the US$

Both occurrences were rare - the combination was once-in-a-century
Interesting. I didn't know that about Canadian buyers! :happy

barberakb
Posts: 56
Joined: Fri Apr 21, 2017 11:14 pm

Re: Why are you NOT buying rental properties?

Post by barberakb » Wed Jan 15, 2020 2:14 am

Mako52 wrote:
Thu Jan 09, 2020 8:54 am
Because the ROI on real estate is terrible, and it's even worse with rentals.

Why would I buy a home for $600,000 in the DC suburbs to rent it for $2,700/month and pay $600/mo in property taxes?
You probably shouldn't. But saying "ROI on real estate is terrible, and it's even worse with rentals." is a purely ignorant blanket statement.

It all depends on your market.

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