This is an interesting deal

[Simi 60]

Houses as income properties or flipping can be investments. However, I can't think of the home we live in as an investment. The value is apparently higher than what we paid, but that benefits us in no way since we have no intent to sell. All it does is increases our property taxes.

Even if you did sell it and bought again back into the same area you be pretty much paying the same value so any paper property value increase is negated.

 

[Giggitoni]

Wifey B:

When California fired Gray Davis as Governor of California in 2003, I couldn’t decide who his replacement should be. I didn’t always agree with life and business choices of Arnold Schwarzenegger. I was stuck. I didn’t think Larry Flynt or the porn star, Mary Carey were qualified. So, I voted for Gary Coleman.

 

[jimisbell]

Even if you did sell it and bought again back into the same area you be pretty much paying the same value so any paper property value increase is negated.

In our small town, the mayor wanted to put in sidewalks to increase the property values. I asked why? I want my property value to be zero as long as it is where I want to live.

I have sold properties where the property value according to the county assessor was half the market value. They want to buy it for the assessment, I tell them the price should be HIGHER than I am asking to pay for my annual efforts to keep the assessments down.

I am always amazed at the number of people that dont protest their assessment every year because they dont know how easy it is to get a reduction. And they are PROUD of the big number that shows how rich, and stupid, they are.


Oh, Yes, Being rich does not equal stupid. Some of my richest friends watch every penny. If you are stupid, you are soon also not rich.

 

[Seevee]

A house is not an investment? Have you spent any time looking at how unaffordable they have become for many? Now compare a home’s price to how affordable a 15-20 year old boat can be.

No, the house you live in is not an investment, it's an expense. You don't buy it for a profit, you buy it to live in.

Affordability has nothing to do with it. However, I could argue on both sides of the boat is less expensive than a house.

Houses will NEVER be so expensive that folks won't buy them, but boats could. Boats are a luxury, homes are a necessity. At least for 99.5% of the population.

 

[Tator]

Your personal house/home may not be an investment, but like a boat it is an asset. I carry them both like my investments, on my personal balance sheet as an asset. The big difference is that once a year I adjust down the value of my boat by what I think that I could get for it if I sold it and adjust up my house amount by what ever Zillow or the county appraiser thinks is the fair market value. Except for 2008, that house value has never gone down.

 

[foggysail]

No, the house you live in is not an investment, it's an expense. You don't buy it for a profit, you buy it to live in.

Affordability has nothing to do with it. However, I could argue on both sides of the boat is less expensive than a house.

Houses will NEVER be so expensive that folks won't buy them, but boats could. Boats are a luxury, homes are a necessity. At least for 99.5% of the population.

Affordability has nothing to do with it? What the $^* are you referencing. If you cannot afford something you should not buy it. And there are many many houses that are so expensive they remain unsold. Boats are a luxury? Do you have a problem with me calling them toys?

ENOUGH! Go find a boat and live on it

 

[Seevee]

Another note....

Houses as an investment are fabulous! There's a ton of advantages to buying house for fun and profit. They are usually small deals, easy to handle, no complication and can have tremendous returns and stability. And they are easy to rent, maintain and sell. You can buy one on a Friday and flip it on Monday and provide beer money for the next year... or you can hold them and rent them and provide beer money for a lifetime. Love em.

Other investments have complexity. Even the stock market requires a broker, an account, lots of personal info given out, and costs to buy and sell with a TON of risk. Big deals are worse, with lawyers, accountants, banks and a ton of risk.

Enough about housing.... back to the boat. Still and expense, but offers a ton of fun and satisfaction and for many, a way of life and living. But, I'll keep my dirt.

 

[BruceK]

Another note....

Houses as an investment are fabulous! There's a ton of advantages to buying house for fun and profit. They are usually small deals, easy to handle, no complication and can have tremendous returns and stability. And they are easy to rent, maintain and sell. You can buy one on a Friday and flip it on Monday and provide beer money for the next year... or you can hold them and rent them and provide beer money for a lifetime. Love em....

Was that so post GFC? Surely that proved house prices can fall, significantly,resulting in negative equity and a lot of pain.
I know people who think real estate always goes up, shares always go up. That`s bubble territory. Suddenly, oops, it reverses. We largely escaped the US generated 2008 GFC, but now house prices have just peaked after a long period of rising, and dropped a little, proving they can go down. Flippers with stock will soon find that to their detriment. Hopefully it`s the gentle landing we are seeing, not a crash. Even so, real estate is overall a good investment which boats are not. Nor should they be,they are for pleasure, recreation, etc. Some sharp operators may buy and sell boats for profit, but that`s the exception, and more a product of buying cheap than anything else.

 

[South of Heaven]

Welcome to Houser Forum guys.

 

[dhays]

Home prices do cycle although the general price slope is upwards. When I built my current home the cost was 1/10th its present value. And sure, it came with expenses for things such as mortgage payments, taxes, water bills and maintenance. Without home ownership, I would have a stack of worthless rent receipts to show for my money spent.

I know what you are saying. I’ve owned only three homes but have sold the first two for a lot more than I paid.

I have seen a couple exercises where they compare the ultimate value of renting vs buying over time. Surprisingly, renting isn’t a bad financial option compared to buying if all costs are factored in and the savings (initially rent is a lot less than payments, taxes, insurance etc...) are invested.

If the federal government quit subsidizing our home purchases, it wouldn’t even be close.

 

[BandB]

I am always amazed at the number of people that dont protest their assessment every year because they dont know how easy it is to get a reduction.

Depends on the area and timing. In FLL, when you buy a home, you're pretty well stuck as they do look carefully at the purchase price. As you move away from the purchase date, you have a better chance. In periods of declining values you can have success. In periods of rising values you can sometimes get a small reduction. Now, I've seen other locations where the vast majority of protests were successful. It was as if the moment you complained they were going to give you something.

Business properties I've had success on.

 

[jimisbell]

Business properties I've had success on.

Absolutely. The day I started making REAL money was the day I realized that commercial property, not residential was the way to go.


I did alright on residential and still have several residential properties, but commercial is where the money is to be made. Up or down economy, vendors want venues and have inventories you can grab and will rent producing cash flow until the next upturn. But residential renters will leave at the drop of a hat and in the middle of the night.

 

[Woodland Hills]

In 19 years our last home doubled in price to over $1m, during that time we made approximately $150k of improvements which we enjoyed for at least 17 of those 19 years. Certainly we had other expenses like taxes, repairs and other improvements, but as renters during that same time we would have spent just as much or even more with nothing to show for it. Had we invested that money anywhere else the increase would have been subject to capital gains taxes, so how was this not an investment?

BTW, nothing brings a bigger smile than signing off on another triple net lease!

 

[dhays]

I am always amazed at the number of people that dont protest their assessment every year because they dont know how easy it is to get a reduction. And they are PROUD of the big number that shows how rich, and stupid, they are.
.

So you feel the assessment you are given is higher than the market value of your home? I would be happy to contest my assessment but in my state, the assessed value is supposed to be the actual market value of the home. So far, the assessed value has always been far below the actual market value. Since I as well as money, I also value personal integrity, I can’t in good conscience, tell the county assessor that they valued my home higher than its true market value when they actually haven’t.

Each state and each market is different however. Your state laws could be written differently and you could be in a market that has falling prices, or your house could be losing value relative to your neighbors for other reasons. I’m just not in that situation.

 

[dhays]

Absolutely. The day I started making REAL money was the day I realized that commercial property, not residential was the way to go.

I have only purchased two commercial properties. One has turned to be a solid investment and, after paying off the loan as quickly as I could afford, is netting me a nice profit yearly. The second one was a very bad decision. I bought it months before the real estate crash 10 years ago. It dropped in value, rents plummeted, and I was so under water on it that I wasn’t able to take advantage of the low interest rates to refinance because I didn’t have enough equity. I finally was able to refinance is this year. After 10 years of mortgage pmts, the value of the property is about the same as it was a decade ago (but increasing now). I am only 1 decent tenant away from being able to have it stop being a net loss every month and that is with myself being one of the tenants in the building!

I’ve decided I’m not smart enough for real estate. Eventually, it will work out, but I’d have been much better off leasing the space I needed and sticking my money in my retirement accounts.

 

[BandB]

Absolutely. The day I started making REAL money was the day I realized that commercial property, not residential was the way to go.


I did alright on residential and still have several residential properties, but commercial is where the money is to be made. Up or down economy, vendors want venues and have inventories you can grab and will rent producing cash flow until the next upturn. But residential renters will leave at the drop of a hat and in the middle of the night.

I meant I'd had good luck on protesting property taxes on business properties. Wasn't speaking as to the investing in them. I'll leave that to you.

 

[Simi 60]

Absolutely. The day I started making REAL money was the day I realized that commercial property, not residential was the way to go.


I did alright on residential and still have several residential properties, but commercial is where the money is to be made. Up or down economy, vendors want venues and have inventories you can grab and will rent producing cash flow until the next upturn. But residential renters will leave at the drop of a hat and in the middle of the night.

Plenty of people have done their dough on commercial.
I can show you sheds, office buildings, shops that have been empty for years.
America has plenty.
Everyone needs a house to live in but not everyone needs commercial property.

 

[Woodland Hills]

Location, location, location. Buying good properties in blue chip areas will cost more, but rents will be higher, stay higher during any downturns and recover quicker when bust turns to boom again.

 

[Simi 60]

Location, location, location. Buying good properties in blue chip areas will cost more, but rents will be higher, stay higher during any downturns and recover quicker when bust turns to boom again.

Yield is generally poor here on high end property
Think $2 million to buy ($2500/week repayment + ++) vs $1000/week to rent
Far better of renting

Yield is generally better on cheaper housing

 

[psneeld]

As usual...personal experience and limited examples seem to rule the TF discussion.

For every "fact" posted on real estate....there in an "anti-fact" that has been experienced or studied by someone else.

Most people here have some pretty nice boats...bet they have done OK in whatever real estate deals they have been in...even if just owning and moving in tneir own residences.

Go to a rwal estate forum or business forum and see how loften it's ess than 10% that do so well.

Buying and living in a house isnt a guaranteed way to either grow your wealth or beat the market.

I have personal experience to prove that well enough for me.....along the way, a few articles have been published to substantiate many of my thoughts and experiences.

To say something is absolute is to ignore some ral life stories out there.

 

[BruceK]

Plenty of people have done their dough on commercial.
I can show you sheds, office buildings, shops that have been empty for years.
America has plenty.
Everyone needs a house to live in but not everyone needs commercial property.

Too true. Residential is safer, here at least. A way bigger more reliable market.

It`s true yield is low.In large part, substantial profit comes from capital gain, not rent.

 

[Delta Dog]

Real life story here...We decided when we retired we wanted to live aboard. We could have stayed in our house and our expenses would have been lower due to the equity we had. It was NOT a financial decision, other than "Can we afford to do this?" It was because we knew we weren't getting any younger and if we were going to do it, it had to be now. We don't regret a minute of it or for that matter, the dollars spent. The kids will just have to make their own way in life, not depend on their inheritance from Mom and Dad.

 

[Bigsfish]

It seems to me far too many of members criticize the way others spend their money and if it doesn’t fit your personal views it’s called stupid. It’s your money please spend it any way that pleases you, it doesn’t have to please me.

 

[Juggerknot]

I would not want it. No island berth. Ever struggle with putting on sheets on a master stateroom berth like that. Why have the angled counter in the galley? Takes up a lot of room. What is with the high chair on the flybridge? Some may like it but it looks out of proportion to my eye. I do like the humongous swim platform but it also is out of proportion. The engines are awesome but it looks really tight in the ER. I can believe the price of the paint job having just painted my boat. What I have trouble believing is that anyone would spend $600k on a refurb of this size boat.

Good salesman at the yard People all have their own ideas on things but I agree, poorly executed and money dumped into the wrong hull for my needs.

 

[Juggerknot]

Why ? Because he could.

Same reason this fella put 21yrs and $2,500,000 building this

"There an ass for every seat"

 

[CruisingTheICW]

You took the words right out of my mouth!

I would not want it. No island berth. Ever struggle with putting on sheets on a master stateroom berth like that. Why have the angled counter in the galley? Takes up a lot of room. What is with the high chair on the flybridge? Some may like it but it looks out of proportion to my eye. I do like the humongous swim platform but it also is out of proportion. The engines are awesome but it looks really tight in the ER. I can believe the price of the paint job having just painted my boat. What I have trouble believing is that anyone would spend $600k on a refurb of this size boat.

Could not agree more! No matter what the boat or price, I have to be able to get out of bed without climbing over my bride. Must also be able to make the bed without standing on my head.

As for that “tuna tower” looking upper helm, my dog, “Kate the Mate” doesn’t do ladders, so my boats must have stairs, not ladders.

As for the boat’s age and money spent, I’m guessing somebody started spending their inheritance or lottery winnings before before meeting with a good financial planner! Just saying!

 

[lady sue]

Have recently joined Forum. Am mystified by others giving opinions, some rather smart alecky, on a person and his efforts to renew a boat and then sell it. Please stow it and communicate about more immediate delights...or at least, subjects concerning our own boats.


Oh, I'm offering Lady Sue a 1982 Mainship I with brand new life jackets for nine million dollars cash, non-negotiable.


Jim Ferry

 

[Seevee]

Absolutely. The day I started making REAL money was the day I realized that commercial property, not residential was the way to go.


I did alright on residential and still have several residential properties, but commercial is where the money is to be made. Up or down economy, vendors want venues and have inventories you can grab and will rent producing cash flow until the next upturn. But residential renters will leave at the drop of a hat and in the middle of the night.

Jim,

Might respectfully disagree with you for a number of reasons.

Folks get into commercial, because they are perceived to be bigger, better, higher rents and less headaches, when just the opposite is true.

Some of the reasons single family homes are absolutely the best:
You can do deals quickly and easily, no lawyers, accountants, long closings, and big closing costs..... You can buy a house with a contract on a napkin over a weekend, close on Monday and have it rented on Tuesday. You can do it without a bank and possibly nothing down and zero percent financing. And you can get upwards of 50% return over the first few years or longer.

Now, you can also sell it over a weekend, no complications and easy.

SFHs are small deals and easy to handle. Commercials are complicated and have a lot of parts to deal with.

As for tenants.... there's always a tenant for a house and when the economy crashes the rents do not. In commercial, it's not uncommon for buildings to stay vacant for years, and to get a prime tenant you have to give THEM the prime deal.

I've done all of the above, including commercial and multi family and over the past several years, nothing but SFHs.

Plus, there SFHs can be handled by most any investor so any one of us can get into them.

Now all of the above requires knowledge and training. Just because one has lived in a house or rented space for their business doesn't make them a real estate investor. Yes, one can screw up and loose their money.

 

[Fletcher500]

IMO, a reset is overdue for property and the market. My crystal ball says one more year at most.

 

[Bigsfish]

Just to weigh in on real estate investment, having been in the residential and commercial market I much prefer the commercial market. Yes you have to deal with lawyers, a closing may take longer, you need to dot the Is and cross the Ts but you don’t have to deal with sob stories of tenants who can’t pay and the humanity factor.

Just my SSO.