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Jul 23, 2019
10:16
:44
pm
NorthwestCoug
All-American
Same. Got a vacation rental on Maui. Zero out of pocket for 7 years
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NorthwestCoug
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NorthwestCoug
Joined
Dec 14, 2001
Last login
Sep 28, 2024
Total posts
11,283 (99 FO)
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Messages
Author
Time
<< Deleted >>
DetmerForever
7/23/19 9:59pm
What about rental income?
titlecoug
7/23/19 10:02pm
Rental income rarely covers the mortgage payment plus all of the maintenance
DetmerForever
7/23/19 10:05pm
Bought one last week that is +$800 a month. After maintenance and repairs I'm
byubyu
7/23/19 10:13pm
Same. Got a vacation rental on Maui. Zero out of pocket for 7 years
NorthwestCoug
7/23/19 10:16pm
Because he doesn't want to do the work of to find those properties
molodyets
7/23/19 10:17pm
This is not accurate. I don't know how many hundreds of times I have found
grandpacoug
7/24/19 3:31am
People buy bonds at a lower rate of return than rentals.
ToasterChive
7/23/19 10:36pm
That isn't true.
YSMACK
7/24/19 7:42am
Lol, ok...I have a rental that produces well above and leaves me extra each
Romex
7/24/19 1:45pm
We investors all have that- except Detmer, I guess.....
grandpacoug
7/24/19 2:02pm
Strange....here is another thought...
cougsrule
7/23/19 10:09pm
I didn't buy my house as an investment but it is great when the place you live
O Gaucho
7/23/19 10:11pm
Comparing owner occupied home and rental home is the idiotic part!
grandpacoug
7/24/19 3:34am
terrible analysis - you completely ignore the utility gained from living in the real estate (or rent collected). It's
HarlemCoug
7/23/19 10:19pm
I'm talking about the investment returns. The OP said a home is where you live.
DetmerForever
7/23/19 10:24pm
you are completely ignoring the financial benefits of having a home - unless you have an alternative place to live that
HarlemCoug
7/23/19 10:33pm
This is a massively stupid concept. It is money you are spending anyway, why not get value back.
Tokolosh
7/23/19 10:19pm
I'm talking about investment returns.
DetmerForever
7/23/19 10:25pm
If that's the case, where is your calculation for rental income in your scenario
byubyu
7/23/19 10:30pm
Rental income is, on average, less than the mortgage payment and mtx cost.
DetmerForever
7/23/19 10:33pm
Even if true (which it is not) you used a 41 year time period.
byubyu
7/23/19 10:43pm
You mean rent goes up but mortgages stay the same?! SHOCKING
molodyets
7/24/19 12:22am
I'm not sure how 1968 to 2019 is 41 years - isn't it 50 years (or 51 depending
DetmerForever
7/24/19 1:03am
51 years makes it even worse for you.
byubyu
7/24/19 8:14am
If you think it's so easy to beat stock market returns with median homes
DetmerForever
7/24/19 12:02pm
This post is so incorrect! I gave a specific example of an apartment building
grandpacoug
7/24/19 3:37am
If you had $100,000 you had to invest within the next month what would you do?
Regal Ute
7/23/19 10:20pm
Bitcoin!
BYUALWAYSNUM1
7/23/19 10:26pm
The problem with viewing your personal residence as merely an investment and
CougBlu
7/23/19 10:22pm
That's pure idiocy.
mulletino
7/23/19 10:23pm
He's well aware of that fact now. I feel for him.
CougBlu
7/23/19 10:25pm
So...just continue the idiocy forever until the landlord sells and he gets kicked out?
mulletino
7/23/19 10:30pm
🤷🏼♂️ He's close to retirement (within 5 years) and then they're moving.
CougBlu
7/23/19 10:40pm
People in my neighborhood renting their house pay over twice what my mortgage is
viper
7/23/19 10:31pm
Goodness gracious the OP is about choosing to invest in stocks or real estate
DetmerForever
7/23/19 10:40pm
Considering that I wasn't the only one who came to the conclusion that you were
CougBlu
7/23/19 10:49pm
A portfolio of rental homes with minimum cash down will win every time.
grandpacoug
7/24/19 3:41am
No, it won't. No data backs up the claim that diversified RE is better than a diversified portfolio.
memento
7/24/19 6:00am
I can only use my personal history and beginning with the 1970s and continuing
grandpacoug
7/24/19 8:28am
Glad we finally agree that historical data doesn't back that claim up.
memento
7/24/19 8:38am
correct and historical data doesn't refute the claim either.
HarlemCoug
7/24/19 10:08am
Yes it does.
memento
7/24/19 10:38am
I love that type of tenant. I had one that lived in a home of mine for 13 years.
grandpacoug
7/24/19 3:40am
Your math and conclusions are wrong.
PizzaPipeline
7/23/19 10:24pm
Plus you are paying down your loan and you get the financial benefits of depreciation...
HarlemCoug
7/23/19 10:26pm
Plus rolling your rents received into furthering leveraging the capital
molodyets
7/23/19 10:36pm
This this this. All those who argue against rentals often assume
CougaRR4L
7/24/19 12:13am
Most homes don't generate positive cash flow.
DetmerForever
7/23/19 10:30pm
I'm batting 1.000 on every rental property I've owned over 15 years.
mulletino
7/23/19 10:32pm
Yes, and some brilliant stock market investors beat the market every year
DetmerForever
7/23/19 10:37pm
I'm not brilliant. It's not rocket science.
mulletino
7/23/19 10:47pm
true and true
HarlemCoug
7/23/19 10:57pm
Thought I'd give you a softball tonight to give you some Didi Gregorius-like confidence.
mulletino
7/23/19 11:00pm
The problem is, what is average?
slatecoug
7/24/19 12:27am
wrong
HarlemCoug
7/23/19 10:33pm
Why would I rent out a place, if it wasn't generating positive cashflow?
BYUALWAYSNUM1
7/23/19 10:35pm
People do it because they are betting on appreciation, or underestimate
DetmerForever
7/23/19 10:37pm
Only investors with no knowledge or experience would do it this way. Incorrect.
grandpacoug
7/24/19 3:45am
This is an uneducated response. I'm not saying you are uneducated
CougaRR4L
7/24/19 12:38am
I guess I wrote my post poorly because clearly it's being misunderstood
DetmerForever
7/24/19 1:01am
I have bought the median priced home well over 100 times in different states
grandpacoug
7/24/19 3:48am
“Your home is where you live, not an investment.”
garyfan
7/23/19 10:31pm
Residential real estate gain can be tax free, but I still agree with your
BDAWG
7/23/19 10:31pm
Residential real estate gains are taxable when you sell out.
DetmerForever
7/23/19 10:35pm
you defer the gains from the sale using a 1031 exchange. Other tax implications - a cash out refi is a tax free
HarlemCoug
7/23/19 10:40pm
All true of stocks as well.
DetmerForever
7/23/19 10:43pm
I don't think you understand what "all true" means. 1031s and depreciation are MAJOR tax advantages.
HarlemCoug
7/23/19 10:54pm
^^ i'm with this guy
BlueFrog
7/23/19 11:09pm
1031 or 250/500 2 year exemption. Get real...
BDAWG
7/24/19 12:40am
A 20k home in LA back in 1968 is basically 750k right now..
ToasterChive
7/23/19 10:38pm
And $20K in the S&P 500 in $2.4 million - which do you think is better?
DetmerForever
7/23/19 10:41pm
Factor in rents at 40% net of gross...
ToasterChive
7/23/19 10:44pm
Then factor in new properties bought with that rental income,
CougaRR4L
7/24/19 12:47am
Depends on how much you paid for rent along the way.
O Gaucho
7/23/19 10:44pm
You aren't making sense, at all. In your scenario, you automatically invested
byubyu
7/23/19 10:47pm
Also why would you assume you bought the house with 100% cash? That would be weird
YIsForBrigham
7/23/19 10:53pm
I bought that house for $20,000 multiple times. Never paid a down payment larger
grandpacoug
7/24/19 3:52am
I have a couple explanations on my previous posts.
grandpacoug
7/24/19 1:33pm
this is my last post on the issue - it's completely faulty to try and use your analysis to prove that ave stock market
HarlemCoug
7/23/19 10:53pm
Since so many of you are asking about rental income
DetmerForever
7/23/19 10:53pm
So which stock should I buy tomorrow?
BYUALWAYSNUM1
7/23/19 11:03pm
and not that it matters but the median home price in the US $285,700 - not sure where you got $168k
HarlemCoug
7/23/19 11:12pm
He explains that in his original post.
Blue Cat
7/24/19 12:02am
He obviously didn't read the original post
DetmerForever
7/24/19 12:12am
For the 20th time, you are making incorrect assumptions. The rate of return
grandpacoug
7/24/19 3:58am
I'm not sure he understands basic finance.
WDaddy
7/24/19 4:48am
Why did you delete your post?
cheezedawg
7/24/19 10:17am
I delete most of my posts after a day or two.
DetmerForever
7/24/19 10:42am
RE: I delete most of my posts after a day or two.
cheezedawg
7/24/19 10:46am
I'll give you a more completely honest answer, since you asked
DetmerForever
7/24/19 11:57am
You’re still missing the point.
garyfan
7/24/19 11:59am
He (or she) is actually not. As I mentioned before, Blackstone doesn't use a 20% IRR
memento
7/24/19 12:06pm
You’re talking RE funds, which also misses the point people have made repeatedly
garyfan
7/24/19 12:59pm
No I'm not. Blackstone buys residential RE. Thus their portfolio is the actual residential RE
memento
7/24/19 1:43pm
So are you saying the people on this board claiming to have otherwise are lying
garyfan
7/24/19 1:46pm
Sigh. I'm saying 20% as a return assumption is unreasonable. If I tell you the Equity markets earn 20% a
memento
7/24/19 1:53pm
I don’t think people have been unreasonable in explaining the upside involved,
garyfan
7/24/19 1:59pm
It has been a panacea for me. I repeat- Buy positive cash flow residential with
grandpacoug
7/24/19 2:14pm
Great, why haven't you invested a billion dollars in this strategy?
DetmerForever
7/24/19 2:29pm
This is a silly argument. Buying and managing a few investment properties is
Skeptical Optimist
7/24/19 2:34pm
THAT IS EXACTLY THE POINT!!!
DetmerForever
7/24/19 3:03pm
What’s the point of narrowing the analysis to investments of a billion dollars
garyfan
7/24/19 3:07pm
Because people look at historic performance of asset classes
DetmerForever
7/24/19 3:28pm
Would it have been better in 1968 to put money in the stock market or under a
DetmerForever
7/24/19 3:52pm
And you just zoomed past the point.
garyfan
7/24/19 4:31pm
Ok, then I don't understand the point of the original post. Why come here to
Skeptical Optimist
7/24/19 3:09pm
Yes, they are talking about a DIFFERENT investment strategy than the one
DetmerForever
7/24/19 2:32pm
Look, if what you are really trying to say here is treating your
CougaRR4L
7/24/19 3:27pm
It's not as complicated as you're making it
DetmerForever
7/24/19 8:56pm
It's a lot easier to buy and manage your own real estate portfolio than it is to
Skeptical Optimist
7/24/19 1:53pm
This is just fundamentally flawed thinking. This is like saying it's easier for you to find the next hot stock
memento
7/24/19 1:55pm
Not at all. It's only saying that being a successful real estate investor
Skeptical Optimist
7/24/19 2:35pm
Of course not, but the thought that your return assumptions should be
memento
7/24/19 2:52pm
This is the last thing I'll say about this topic. The issue isn't should or shouldn't RE be a part of
memento
7/24/19 2:00pm
Sorry, but my data does support the #'s. Leverage and compounding are great.
grandpacoug
7/24/19 2:17pm
Your data is not the market. I repeat. Your data is not the market. This is not difficult to understand
memento
7/24/19 2:32pm
Comparing the median home price in the 1960's to today is also not the market.
Skeptical Optimist
7/24/19 2:45pm
Thanks for putting words in my mouth. I didn't say that nor did I agree with that analysis.
memento
7/24/19 2:56pm
People make investment return assumptions based on their experience and history
Skeptical Optimist
7/24/19 3:13pm
I agree that everyone shouldn't expect to be able to do what I was able to do.
grandpacoug
7/24/19 3:59pm
Nobody said that it was easy to earn 20% on residential real estate.
Skeptical Optimist
7/24/19 12:17pm
Have you read the comments?
DetmerForever
7/24/19 2:30pm
I wish I could rec this more than once.
memento
7/24/19 2:33pm
I see people saying that they consistently achieve those returns. I don't see
Skeptical Optimist
7/24/19 2:43pm
I think we're talking past each other
DetmerForever
7/24/19 3:07pm
I need to take five minutes on checking weekly rental reports. I'm done on this
grandpacoug
7/24/19 4:02pm
Ok, fair enough, but that seems like a pretty meaningless comparison to make
Skeptical Optimist
7/24/19 4:09pm
I only wish you were right
DetmerForever
7/24/19 8:52pm
That was probably the crux of where the discussion derailed here.
CougaRR4L
7/24/19 11:10pm
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