Cars vs real estate.

[SteveSS]

With my son buying a nice home I am taking another look at real estate. Yes, homes are too expensive but what choice do we have? Even if the bubble bursts, Colorado is growing so much that I don't think it will have much effect here. The home we built in 2000 is worth 3X as much now. Some of our cars have gone up in value and some haven't.

I know most of us buy for enjoyment not investment but damn. All I really need is a roomy car with a radio and AC. So what I've got is maybe $85K in cars right now. If I was smart I'd sell those and put a down payment a rental property or up-size. The latter may be coming. Gma (my mom) is 94 and I should buy her ranch when she passes. I know this will meet with a lot of disagreement here but it doesn't make it any less true.

Now if you're rich and money isn't an issue, I say go for it. Kevin Hart's car collection is awesome. It's just seeing what's going on with real estate makes me think twice about things.

 

[SteveSS]

I don't think Tyler Hoover is doing the right thing either. Building a super fancy home/garage in the middle of nowhere in Kansas is going to have a lot of resale value.

 

[#41]

There is no reason you can't do both. Just pare down the fleet and get on it.

 

[Fran Blacker]

More people looking for houses than cars.

 

[ChipinAZ]

Housing costs in the west/southwest will probably remain high for the foreseeable future. A one bedroom apt. here in Phoenix runs about $1,400+ a month. Permitting has slowed somewhat recently, but my office is still processing a bunch of single-family house permits every month. A home up the road from my place sold the same day it was listed for sale.

Values in real estate and collector cars are both quite high at the moment; however, this economy is unsettled and may take a sharp turn. Maybe see how the election goes before making a decision?

 

[SlingLow]

Investing in real estate has allowed me to 'invest' in cars. It never would have worked the other way around. I don't see the value of my cars dropping much below purchase price, but they will never appreciate much either. It's a place to put some capital that has more entertainment value than a bank balance. Remember, life is for entertainment purposes only!

@SteveSS I've watched nieces and nephews buy homes in the last few years and I have usually thought, 'now is not a good time' as far as pricing goes. The passage of time has proved me wrong. There is no bad time (here's the catch) if you are in it for the LONG haul. It is a get rich slow scheme for most (except the glowing skin, shiny white teeth TV folks of course).

 

[monaco66coupe]

I recommend taking a real estate course called landlord/tenancy law, as Colorado has extremely strict laws regarding tenant rights. Then If you still want to be a landlord after that course, proceed .


I have been a realtor for 31 years, and 25 of those was also as a landlord, with seven homes when at the highest owned.Real estate helped me get to where i am today. But after 25 years I walked away and sold everything needing a tenant. it is not for everyone, but if you have the right mindset it can be good long term security.
My view now is:cars never call you with a problem, they don't miss rent payments, break down on their own, and never talk back.Lol

 

[Fran Blacker]

Daughter and her husband bought a condo near Providence RI. They were reluctant buyers, felt now or never. Will be hoping to refinance in the future. My mortgage was $36,000 @10% but with a small increase in monthly payment every 2 yrs. The increase was about $30 a month so mortgage was paid in 17 years. Never refinanced because rates were still 6.5% and expense made it not worthwhile.

 

[33 IMP]

I am amazed at what's going on In my southern california neighbor hood. I can probably find a thousand new apartments/condos, either just finished, or currently being built. (NOT an exageration). And, this all within a mile or two of my house.
I thought people were moving OUT of California?
And I see VERY little garage/parking spaces in these new four story (which is also a new feature) complexes. I guess they are expecting their customers to use bus, train and bicycles.
I guess if your paying $2000/month rent, you probably can't afford a car anyway.

 

[1 Wild R/T]

I owned a rental for nine years.... Selling it was possibly the best day ever... Most renters don't take care of other peoples houses... I care to much about what I work for to have someone trash it... Never again... Here in California renters have all the rights & zero responsibly.. Thank God I sold it before Covid, the government up & deciding people didn't need to pay rent would have bankrupted me....

 

[SlingLow]

When I got married, my wife owned a condo that we lived in for 4 years before we bought our 1st home. We went through a few renters before 'Liz' moved in and stayed there for 8 years without a rent increase. When we finally raised rent, she moved out and we decided it was time to sell. I told Liz not to worry about cleaning the carpet since it was original and close to 20 years old. When my wife saw it, she was pissed about the condition. Then I explained that Liz paid us $68k in rent for a condo that my wife paid less than $39k for. That cooled her jets.

 

[Takoctopus]

I do rentals, at 49 it has allowed me to retire and spend time me working on my cars.

 

[Richard Cranium]

Most renters don't take care of other peoples houses...

And that's why most will never be homeowners themselves.

 

[YY1]

Now is still a terrible time to buy a rental.
I follow rent pretty closely and in our target neighborhood, the rent has come down about $100/month in the past year.
Thousands of houses and apartments are under construction in the area and are starting to be completed with many more on the way.
Our rule of thumb is it's gotta be close to 50% profit or it's not worth it.
If you are buying at the "top of the market" you will never make 50% profit when the rent trends down.
Even "fixer uppers" are high right now.
One across the street from ours is for sale and it has a lot of questionable issues, like a literally white washed privacy fence that should have been torn down.
They are trying to make 80K on it. Not gonna happen, but that's where the market is.
It would need to be half of the asking price in order to meet my numbers.
...and it still needs real work.

 

[AR67GTX]

I think still high mortgage rates, rising property taxes and rising property insurance rates are sapping some of the profits off of real estate. But still probably a better investment than cars.

 

[Hey-O]

Daughter and her husband bought a condo near Providence RI. They were reluctant buyers, felt now or never. Will be hoping to refinance in the future. My mortgage was $36,000 @10% but with a small increase in monthly payment every 2 yrs. The increase was about $30 a month so mortgage was paid in 17 years. Never refinanced because rates were still 6.5% and expense made it not worthwhile.

Everyone needs a home and rates can be refinance down the road, I did the same as your daughter and you, many houses ago.

My thoughts are, stay away from California and Florida, to me, they're hopelessly stuck with insurance and tax problems, insurance being the worst. My daughter flips houses and owns 9 right now. Two are duplexes and one other she will keep and the rest will go. Profits are down and costs are up to renovate, pass it alone and move on. Cars are useless if you don't sell them for profit. They're good for passing along money to others while you play now and let them deal with them after you're gone. I don't bet on things I won't be around to see, let them deal with taxes on cash, cash is king where I'm from. I do believe, in some ways, renters will prevail. With the people coming up to scared by the world we live in, renting only makes sense. In many countries, renting is a way of life and people rent their whole lives. We have a thing about a big house, big yard and the feel of ownership. I believe, because of the world we live in, smaller housing is a trend that may be more realistic in the future. Taxes, insurance, utilities, and maintenance on big houses is a thing I have downsized away from. It has nothing to do with being able to afford it, I don't need it. I don't like rental property and that's not about to change. My daughter's a gambler and very good at it. She'll sit on them and deal with the renters, not my forte.

I don't own the house I have now, the bank does. At 2.65 percent, I'm using their money, not mine, 20 Percent down and that's it. My payment is more about taxes and insurance than principal, by a mile and the first two, will never go away. So with taxes and insurance, do we really get away from a payment, I think not. That's where renting comes in, someone else deals with it and keeps up with the mess, they don't need to be bothered with. We live in a very strange world and reaching way out there betting on what to do these days and the days to come, is not in my plans anymore, that's for my daughter, and yes, for good or bad, she has me............

 

[YY1]

When I got married, my wife owned a condo that we lived in for 4 years before we bought our 1st home. We went through a few renters before 'Liz' moved in and stayed there for 8 years without a rent increase. When we finally raised rent, she moved out and we decided it was time to sell. I told Liz not to worry about cleaning the carpet since it was original and close to 20 years old. When my wife saw it, she was pissed about the condition. Then I explained that Liz paid us $68k in rent for a condo that my wife paid less than $39k for. That cooled her jets.

We had a 9.5 year tenant, that paid 95% of the financed cost of the house.
It did need a remodel after they left, but we laughed all the while doing the work and paying for it, because they basically bought the house for us.
We had a 5% max increase year over year clause at that time.
We've since reworded that to reflect the possibility of a 15% increase in the market and costs to us.

 

[Hey-O]

Homeowners in Florida pay annual premiums that are nearly four times higher on admission than the national average, with a heavy reliance on reinsurance. Think of reinsurance like insurance for insurance companies. These firms have hiked their premiums by 30 to 40 percent in recent years, especially with looming hurricane threats and the market is taking the hit. I can't deal with a state that could end up like Sudan, permanently damaged by what ever is going on with our climate.

 

[YY1]

Ours is up $800.

Not too long ago, the whole premium was $800.

Last year was the worst, up $1200 IIRC.