Post: #1

I can't see why Gen Y would buy a house these days. Especially if you are a red-pill player.


Of course the ideal situation would be to own a $1m+ house that you own and rent out to someone else, funding your travels in perpetuity with constant monthly passive income.


But that's just not going to be the case unless you win the lottery.


In my last city (Melbourne), the median house price is $567,000 and median household income is $67,700. That's a multiple of 8.4.


In my new city (London), average deposit for first time buyer in London is £64,000 GBP for a £200,000 mortgage. Median household income is £27,800.


As a single man on a single income you will probably have less cash than the combined income of a SWPL couple. Even these high-earning SWPL couples are finding it tough getting a property paid off which should be a cause for alarm.


If you buy you will only be able to afford shitholes on the outer limits of the city. Such an abode will be unsuitable for bringing women back.


You could also get screwed severely on negative equity - prices can't double in price every 10 years forever. The more that people pay on housing, the less consumer society has to spend on everything else. Constant growth over the next decades is an unsustainable model.


A mortgage would stop you from travelling, inhibit you from relocating (would surely make a loss if only holding a property for 5 years) and if you lost your job you could be ruined. The value for money just isn't there anymore like it was for earlier generations. You just don't want to take on that much debt - it's not worth the risk.


Instead I think the better option is to rent where the logistics are good. Save for holidays and invest in shares. Have a long-term vision for your own independent business. The best plan in today's world is to be globally mobile, debt-free, loaded with cash and a high skill set. Live urban, not in the suburbs.


Buy property much later in life, hopefully overseas in a place that has decent property rights. Spend your 20s onwards learning some other languages in preparation for this day.


If you stand a very solid chance of inheriting property from parents when in your 50s it makes even less sense to chase after the home ownership 'dream' now in your 20s. The rules of the game have never been more heavily stacked against this current generation so be smart about how you play the game within such an environment.


Some good analysis I found on the internet while surfing. Note assumption that you will have a partner that is chipping in too (this is a very strong assumption within property articles targeted at First Home Buyers). Of course average RVF forum member is a dirty dog playboy that isn't trying to lock in a house to raise children with his partner.

Quote:Forest Gump - 10 September 2013
In the perspective home buyers mind, one may consider the following.
You and your partner save a deposit of say $80,000.00 and forgo all unnecessary spending, holidays, luxury and fancy cars and clothing for the next say 5 years.

Get a loan for say $300,000.00 as a basic first home buyer and get on the property ladder in the hope that sometime in the future your sacrifice of the deposit and living on plain bread and rice will have been worth it and your home will improve with value. (Fairly unlikely in a FH buyers area.

Then live like a pauper in an effort to quickly pay off your mortgage before interest rates escalate where your repayments outstrip your income.

Put off having a baby since you need 2 wages to kill off the mortgage. After a few years of feverently working and paying interest you and your partner realises that life sucks and decide to have kids, so you lose one wage, then struggle to live on the other wage, paying the mortgage and feeding 3 mouths.

Then the boss says that he needs you to work longer hours (for nix) and you comply knowing that you need this job to pay off the mortgage. The boss figures this out and takes advantage of you. Your wife gets annoyed that you are working so many hours and she is stuck at home with the kid.

After a year or 2, the wife wants a holiday to see her family and to spend some time with her husband thats never at home. So the husband puts the holiday on the credit card. Then the car needs replacing and you need to put the garden in around the home so that junior can have somewhere nice to play, and so you refinance the home and get a bigger loan putting you back a few years.

Before you know it, 12 years has passed, you have still have at least another 4 years of servitude to the bank, you’re never at home, you hate your job and your boss, you cannot afford nice clothes. You’re always grumpy, desperate for a holiday and a decent rest…then your kid hits puberty.

You then go to work and envy all the renters that are happily enjoying holidays, nice lifestyles and are telling the boss where to get off when he’s being unreasonable. Then the boss remembers just how compliant you are and walks over to your desk with another 4 hours of unpaid overtime for you to do tonight.

It’s then that you remember its your wedding anniversary.

My Advice is not “Don’t buy now” Rather…”Sell now” ….and take back your life, love your wife, buy her flowers, take your kids on an overseas holiday, and tell your boss to plug his unpaid overtime in someone else’s exhaust. You will feel much better and look much younger and have the confidence to ask for a pay-rise for all the hard work you have done over the past 10 years.

Quote:Forest Gump - 10 September 2013
Here is a common ending.

The couple decide to by a house that that cannot afford. The repayments are so high that the man decides to work on Fly-In Fly-Out (FIFO) and earn the big dollars in the mines.

After working FIFO for 2 years, the woman is tired of being alone, seeing her partner for just 1 week in the month where he basically sleeps to recuperate for the previous 3-4 weeks of working 10 hr days.

You can see where this is going….the woman meets a nice guy say a local guy with a local 9-5 job and they both decide to hook up. She falls for him simply coz he’s around and she is lonely. She files for divorce-separation and gets 50% of the house thats almost paid off thanks to FIFO….or should I say Thanks to the stress of a mortgage.

The point is, mortgage stress has an impact on relationships, spending, health, kids behavior, adult behavior and attitude.

I know a young guy that has a house 2 kids and is desperate to pay off his home. He works so much that he’s never at home to see his kids or his misses.

He eats like a pigeon, takes public transport so its a very long commute for him and is so scared of losing his job that he does extra hours just to impress the boss.

I keep telling the guy that he has his focus all wrong.

Last week he was made redundant.

Post: #2

Post: #3

Why housing affordability wasn't an Australian election issue in 2013 campaign.

Same reasons why politicians wouldn't dare tackle unaffordability in the London housing market.

Quote:Chodley Wontok
Cross Cultural Consultancy

Housing affordability isnt an election issue for a few straightforward reasons.

Let’s start with 2/3 of people either owning their own home outright or paying off a mortgage. The last thing they would be interested in seeing is a fall in nominal prices. You cant convince the babybooming element (the vast bulk of those who own outright compared with those who have been suckered in to paying off a mega mortgage) the future is being held to ransom, because they are too busy trying to make sure they have poll position on the public funding teat for super, pharmaceutical benefits, sundry pieces of welfare spending, and low taxes. The fact that they also constitute about 2/3 of the investment property owning types involving an outlay of about $4 Billion on negative gearing (compare that with the sums outlaid for manufacturing support) means that trying to wean the Australian public off that could pose some issues for the body politic. Negative gearing of course is the gimp of Australian politics insofar as nobody is allowed to mention it in public, let alone question the logic of outlaying $4 Billion to encourage 1.2 million investment property owners to run their properties at a loss, or why it would apply to existing real estate rather than new construction only. Going there is like asking for a form of political Ebola virus.

The media sees this 2/3 and simply plays up every last scintilla of hour price rise, and of course it is held firmly by the fiscal nads by a Real Estate industry which is one of the major sources of revenue for the cash strapped commercial TV field (hence the plethora of home renovation TV shows) the print media (hence the eminently superior production values of any real estate related insert in any print, not to mention the complete skewing of all print media related coverage, and the omnipresence of the mantra 'there has never been a better time to buy real estate' on the radio waves.

That media plugs the punting masses straight into the government. Thats the same no matter what side of politics one votes. That government sees domestic real estate construction as the only viable means of maintaining aggregate economic demand in the face of a mining capex downturn of the type we will have over the next couple of years - stimulus elsewhere quickly leaks overseas, whereas if the money is spent on housing construction then at least some people are kept busy until such point as those tradies spend the money on a new TV. Treasury and the RBA arent dills, they know that punting types wont spend on housing construction if house prices are falling, so they have propped them up with rate cuts.

Those rate cuts have benefited first and foremost those who have access to investment funds - lets say those who own their own home and can mortgage it to invest in something else, which is largely the same one who have the first dibs, in the best circumstances, at their super, but for general purposes we can call them babyboomers too. The first access of these types to funds for investment purposes should be most obvious to the casual observer at any given auction in the inner suburbs of Sydney or Melbourne who happens to note that there seems to be a remarkable absence of young buyers and a remarkable predominance of those people who would appear to be in the 'golden years' and have no inclination to invest in anything other than existing bricks and mortar because they have been given the message loud and clear that real estate never goes down by governments of both persuasions who have bent over backwards to ensure that that is indeed the case. They tend to be of the view that if there is a major economic meltdown then property will be the safest place to be, and that if the economy is to boom then that will be most overtly felt in the real estate sector. They arent concerned about subsequent generations - they once were a subsequent generation and they didnt feel it was that difficult, and have no regrets about the title being held by generations X and or Y currently.

Of course the other major participant at any given inner city auction will be the migrant community, with migration running at historically high levels, and absolutely no questions asked about where they get the money from (and if someone’s uncle is a corrupt member of a politburo somewhere then the Foreign Investment Review Board appear not to actually man the gate, and not actually ask if visa requirements are being met). The net effect of this is to underline in bold (if not emboss) the idea that real estate can never be allowed to decline in price.

From here we move along to the various state governments who by and large have twigged to the idea that stamp duties on real estate sales are a fine basis for funding their operations, and that it just so happens that if they restrict the supply of residential land then the price for existing residential land actually rise and that the net effect is that they get more money from the stamp duties because the transaction prices are higher. To help ensure that their operations remain on a somewhat plausible budget footing they have ceased funding services to anywhere not in the major urban centres, which helps to support demand to live somewhere within cooeee of the centre of a large city.

Then we have local governments who have worked out that charging developers up front for services makes sure that they get their dough first up and that if that happens to ensure that prices are somewhat higher for anyone looking to buy a new build then thats just the market in operation and it isnt their fault.

Next up come the property developers. They have invested vast sums in hoarding a generations worth of land and having outlaid such sums (for which they have tended to borrow from the obligingly supportive banks) they are not inclined to get back anything on their investment which may not keep shareholders and banks perfectly sated. They tend to be aware that the younger first up buyer is a little reticent to go into debt to say the tune of maybe 300-400K so they have obligingly trimmed land parcels from the 700+ metres a generation ago to maybe 350-400 metres these days in places in the boondocks from the major urban centres. Somewhat surprisingly sales are currently slow.

Of course the backstop to the whole shebang is the banking system. Australia has the worlds only banking system which lends 2/3 to mortgages on real estate (which many economists would tell you tends to fall under the heading 'unproductive investment') and 1/3 to whatever it is that could conceivably be more productive for the economy (but tends to be less so for the banks). That banking system currently borrows about 20% of what it lends out for from the wholesale capital markets and what it borrows is invariably collateralized by whatever the bank has its hand on which global markets may take as collateral - lets say mortgages, shall we? This in turn means that if there is anything in this world which might conceivably reduce the value of the said mortgages then presumably the global capital markets may ask Australian banks for more and may conceivably ask them to pay an increased rate of interest (nobody wants to go there, as we tend to have a large number of bank funded property investors who are restricting their repayments to interest only despite the lowest interest rates in 50 years – they may not be speculating one could argue, but given the mantras in play you would ask why they weren’t, as it seems for sure a one way bet).

There is a load more but the basic themes will run off these.

This is why nobody wants to touch housing affordability, and why both sides of Australian politics just want the Australians of tomorrow to shut up and suck it up. They can have the houses when they can pay the market price, and if they don’t then the Australians of today will just find someone else who will, and if the Australians of tomorrow just happen to need to work eternally in fairly uncompetitive workplaces, then that isn’t the fault of the Australians of today or the people they put into power at elections. That is just the way democracy and economic happens to work and the Australians of tomorrow will simply have to get over it.

Post: #4

If you pay rent for 30 years, you do not own the house.

Post: #5

Couldn't agree more. For someone who has been an owner for the past 13 years, I can tell you that the cons far outweigh the pros. I'm in the process of selling that sucker which has been holding me down. Not just the mortgage but also other costs, which can be as high if not higher than the mortgage proper such as maintenance fees, property taxes etc...Right now, the monthly maintenance fees on my condo is higher than the monthly mortgage I'm paying. How is that possible? How does that even make sense? But one thing for sure, I am selling that sucker asap and that I ain't buying anything new in the foreseable future, at least not in here. I may buy in the future in some tropical place on the beach where the prices are a lot more affordable than in Canada.

All in all, I'll say that the condo, with its hosts of on going costs, has been the single biggest cause of what's been holding me back from living as I used to, the location independent lifestyle. No more of that bullshit anymore! Time to get my life back! Fellows, don't fall into that trap!

Post: #6

Good point. The only time buying makes sense over renting is if you're set on remaining in the same location for the next 5-10 years as at least, you'd building some equity in your property and see some potential profit at the time of sale. However, most guys in here, are the adventurous type who want to roam around, have location independent lifestyles. For these kinds of guys, owning doesn't make sense. So if you are looking to stay put and settle somewhere, then owning is the way to go. If you are looking to travel and bounce around all the time while running your own online biz, then renting is the way to go.

(09-12-2013 11:53 AM)void Wrote:  If you pay rent for 30 years, you do not own the house.

Post: #7

(09-12-2013 11:53 AM)void Wrote:  If you pay rent for 30 years, you do not own the house.

In which city do you live? I don't disagree that owning a house is better than renting 'in principle'. My point is it's the sheer amount of your life you destroy in the process of finally getting to the point where you are an owner. And if you stand to inherit anyway, seriously, what is the point?

Baby boomers could buy detached houses at x3 salary. Owership was cheap. Those days are gone. Even a shitbox in a crime ridden area is formidably expensive to a high earning young professional. And if you get hit by negative equity, which is very possible given the housing market looks like a speculative bubble, you're trapped.

Post: #8

I own an apartment for one reason: it would cost me around 25 percent more to rent the same apartment. If I move, I'll ret it, give a management company 10% to collect the rent and generally not worry about it.

Rent differentials are the thing to pay attention to when deciding whether or not to buy.

Post: #9

What city do you live in j r where the rent is more expensive than mortgage repayments? Just curious.

Post: #10

Rent is 100% lost money, landlords want to make their profits too. Mortgage may be lost money if the house is not near a city and you have to sell it after some time for a loss, because no one wants to live at the countryside or suburbs far away anymore.

For a young mobile (global) (professional). It doesn't make much sense. A option to consider for medium time spans is buying a apartment in a city and treating the mortgage payments as rent and sell it later on.

Post: #11

(09-12-2013 02:21 PM)void Wrote:  Rent is 100% lost money, landlords want to make their profits too. Mortgage may be lost money if the house is not near a city and you have to sell it after some time for a loss, because no one wants to live at the countryside or suburbs far away anymore.

For a young mobile (global) (professional). It doesn't make much sense. A option to consider for medium time spans is buying a apartment in a city and treating the mortgage payments as rent and sell it later on.

If you rent in a logistically desirable area in a popular city, depending on your lease agreement, you can come out on top renting your spot out on airbnb while maintaining the global lifestyle.

Post: #12

What about buying outright in poosy paradise? Let's say 40k in the Phils pre-construction, pay it off in a couple years so when you get to retirement you can just go there and rake in the poon without worrying about rent and all that shit.

I have an idea where RVF members form a retirement poon network in various poon rich nations and switch accommodations on a free basis.

lets say..

Ali-b buys in DR

Roosh buys Poland

VP buys Colombia

etc etc...

Then trade places every two months or whatever.

Free you could even pull it on SS if it's still around.

Post: #13

(09-12-2013 11:27 AM)Que enspastic Wrote:  A mortgage would stop you from travelling, inhibit you from relocating (would surely make a loss if only holding a property for 5 years) and if you lost your job you could be ruined. The value for money just isn't there anymore like it was for earlier generations. You just don't want to take on that much debt - it's not worth the risk.

Instead I think the better option is to rent where the logistics are good. Save for holidays and invest in shares. Have a long-term vision for your own independent business. The best plan in today's world is to be globally mobile, debt-free, loaded with cash and a high skill set. Live urban, not in the suburbs.

Those assumptions are all wrong.

If you're saying a mortgage for residential property is too risky but you advocate starting a business - I'd have to conclude you've never had a mortgage or a business.

I've had a mortgage for a long time now. I sleep just fine at night. I don't see it as a risk.

When I look back at the appreciation on the first property I bought, it took a bit longer than 10 years to double. But just counting the appreciation, I gained an average of $1,300 per month. So month in, month out, passively, the property is throwing a bunch of money into my net worth.

That doesn't even account for the years I lived in it for free, or the many years I rented it for cashflow.

All those things you said you can't do with a mortgage, I did. If I'm location independent right now, it's largely thanks to having capital and passive income.

The investment decision does change depending on local conditions. Price/earnings, future market expectations, interest rates.

You may well be right that buying in Melbourne is not worth it. You can still look elsewhere. The world is a big place. Opportunities abound for those who seek them out.

Previous generations would have been extremely jealous of finance in EUR and USD for between 2% and 5%. They would tell you to take that deal immediately.

One last thing. You want to count on inheriting part of a valuable estate from your family. But you assume your family doesn't have your back to even advance you a few mortgage payments if you're out of a job?

Post: #14

(09-12-2013 02:47 PM)Tigre Wrote:  Those assumptions are all wrong.

If you're saying a mortgage for residential property is too risky but you advocate starting a business - I'd have to conclude you've never had a mortgage or a business.

Correct. Obviously I wouldn't jump into anything I don't fully understand given high failure rate of businesses.

(09-12-2013 02:47 PM)Tigre Wrote:  I've had a mortgage for a long time now. I sleep just fine at night. I don't see it as a risk.

Negative equity following a downturn.
Spike in interest rates.

(09-12-2013 02:47 PM)Tigre Wrote:  You may well be right that buying in Melbourne is not worth it. You can still look elsewhere. The world is a big place. Opportunities abound for those who seek them out.

Previous generations would have been extremely jealous of finance in EUR and USD for between 2% and 5%. They would tell you to take that deal immediately.

Would prefer higher interest rates of early 1990s for lower wage to mortgage ratio of 1990s.

You're right about Melbourne (and London). I want to buy in Bangkok if I can. The trick is aligning career with location.

(09-12-2013 02:47 PM)Tigre Wrote:  One last thing. You want to count on inheriting part of a valuable estate from your family. But you assume your family doesn't have your back to even advance you a few mortgage payments if you're out of a job?

I didn't think about that. They have my back pretty much always. I'm v fortunate. Big difference between those with supportive parents and those whose parents can't afford to be supportive.

Post: #15

Clearly the case against home ownership is stronger in certain cities that rating agencies deem "substantially overpriced". This is where I am coming from. Buying up a home that is affordable (less than x5 salary) is not a bad move.

Post: #16

I don't think there's a solid case for or against home ownership. It's not a "one size fits all". Like college, I'm pretty sure home ownership has been talked up by Realtors and mortgage companies, and parrots, or people who just repeat whatever sounds good and makes them feel enlightened.

Just figure out what you want out of life, and go that route. Maybe buying a house and staying stationary is the best thing for you. Or maybe renting so you can pack up and move on short notice is better for what you want out of life.

I listen to a lot of people who rent who keep parrotting "I'm tired of paying somebody else's mortgage! I'm tired of flushing money down the toilet in rent!" I try to tell them that renting isn't flushing money any more than buying groceries is. It's an economic transaction. If it works for both parties, great.

Since I'm going through a divorce and don't need much, I'm just renting somebody's basement. It works well. It's inexpensive and I have my own area, bedroom, bathroom, etc. Compared to what studio apartments in this area go for, I'm coming out ahead. I put an ad on Craig's List that I was looking for a private suite to rent and these people answered it.

Post: #17

(09-12-2013 01:06 PM)Que enspastic Wrote:  What city do you live in j r where the rent is more expensive than mortgage repayments? Just curious.

DC, where the rents are really quite insane. It's not as bad as New York, but in New York the for sale prices are even higher.

The whole 'renting is throwing away money' argument is not quite right either. You always pay rent. The question is whether you pay it to a landlord or you pay it to yourself; that's the best way to think about it. If you owned something and you weren't living in it, you could rent it out. So, there is an opportunity cost to living in a home you own.

The best way to decide which works out better is to split up the costs into the cost of owning and cost of renting. Here's what I mean:

I own an apartment and the mortgage is $700 and the condo fee is $300 (these are not my actual numbers, but the ratios are real). The cost of rent for a similar apartment in my neighborhood is anywhere from $1200 to $1400. Of the $700 most of it is interest at this point, so I'm only building a small bit of equity every month (say $100). I'm paying $1000 to live here and the place is bringing in $100 (plus or minus whatever the ROI is, which depends on what I sell it for). $900 is much cheaper than what I would pay to rent another apartment, so buying made sense for me.

If I lived somewhere that similar apartments were renting for $750, then it would not have made sense to buy.

The other option would be to rent out my place, say for $1300, and try to find someplace cheaper to live. The problem with DC is that you can't go much below what I'm paying now without either moving much further out than I want to live, living with roommates, or living in a really crappy place.

If the situation came up where I absolutely downsize my budget, I could. Using the same numbers, I could probably find a room in a group house in a decent neighborhood for $750. With the $300 in profit from renting my place, I'm down to $450 net on housing, which is still better than not owning at all. I don't do this, because the downgrade in living conditions just isn't worth an extra few hundred bucks a month.

Post: #18

I hope Pax didn't own his home.

Banks and employers and women want you to own a home because it makes you a slave to the system.

I rent a nice little place. I could walk away any time and just forfeit the deposit since it would rent within a month.

You can't put a price on my freedom. (Well, you could maybe. But doing a cost analysis of renting v. buying wouldn't cover it, even if buying was the better deal.)

Post: #19

(09-12-2013 07:17 PM)MikeCF Wrote:  I hope Pax didn't own his home.

Banks and employers and women want you to own a home because it makes you a slave to the system.

I rent a nice little place. I could walk away any time and just forfeit the deposit since it would rent within a month.

You can't put a price on my freedom. (Well, you could maybe. But doing a cost analysis of renting v. buying wouldn't cover it, even if buying was the better deal.)

If you own in a place with high rents and steady demand for rentals you can "walk away" just as easily by handing the keys over to a management company and let them deal with the hassle of tenants for 9% of the rent. Even if unforseen maintenance costs and an empty month here or there eat into your profit, you're still breaking even and building some equity every month.

Post: #20

(09-12-2013 07:28 PM)j r Wrote:  If you own in a place with high rents and steady demand for rentals you can "walk away" just as easily by handing the keys over to a management company and let them deal with the hassle of tenants for 9% of the rent. Even if unforseen maintenance costs and an empty month here or there eat into your profit, you're still breaking even and building some equity every month.

How many investment properties do you own?

I am going to buy my first properties this year.

It is not nearly as simple as you claim.

Or maybe it is.

Drop a data sheet on cash flow, etc.

Also, what happens if you get a tenant you have to evict? That's six months without rent.

Then what?

Do you always assume the most rosy scenario possible?

Post: #21

(09-12-2013 02:21 PM)void Wrote:  Rent is 100% lost money,

The interest component of your repayments is also 100% lost money.

Quote:landlords want to make their profits too. Mortgage may be lost money if the house is not near a city and you have to sell it after some time for a loss, because no one wants to live at the countryside or suburbs far away anymore.

For a young mobile (global) (professional). It doesn't make much sense. A option to consider for medium time spans is buying a apartment in a city and treating the mortgage payments as rent and sell it later on.

So your strategy is reliant on capital gains? ... that's called speculation.

Post: #22

(09-12-2013 07:07 PM)j r Wrote:  DC, where the rents are really quite insane. It's not as bad as New York, but in New York the for sale prices are even higher.

I've heard the women are great there.

Haha just playin.

Just ran some matchups (four cities in which I will most likely spend the majority of my working life) vs DC.

London and Melbourne are +67.70% and +55.48% more expensive than DC outside of the centre. This is on the fringes, first home buyer territory. New York is slightly cheaper -3.23% to buy than DC on the fringes. Hong Kong enters scary territory +132.97% more expensive than DC outside of the centre.

All of these cities are significantly more expensive than DC for City Centre properties (+134.97%, +37.71%, +67.50%, +209.51%). DC residents are also helped in having a much greater disposable salary after tax than Londoners ($3,810 vs $2,785) yet cheaper property.

This means there will be many young professionals who can afford to own property in DC that wouldn't if they moved to any of these other cities I've mentioned.

My long term plan is to forget trying to pay off an unaffordable mortgage in any of London/Melbourne/New York/Hong Kong. I'll just rent instead, still saving though, and ultimately aim to buy something in Bangkok in the city centre if anything (condominium maybe, if Thai property law allows it) later on in life.

Post: #23

(09-12-2013 07:43 PM)MikeCF Wrote:  

(09-12-2013 07:28 PM)j r Wrote:  If you own in a place with high rents and steady demand for rentals you can "walk away" just as easily by handing the keys over to a management company and let them deal with the hassle of tenants for 9% of the rent. Even if unforseen maintenance costs and an empty month here or there eat into your profit, you're still breaking even and building some equity every month.

How many investment properties do you own?

I am going to buy my first properties this year.

It is not nearly as simple as you claim.

Or maybe it is.

Drop a data sheet on cash flow, etc.

Also, what happens if you get a tenant you have to evict? That's six months without rent.

Then what?

Do you always assume the most rosy scenario possible?

It should be obvious that I'm not trying to pass myself off as a real estate mogul.

I'm just saying that there is no one answer to rent or own. It all depends on your specific market. That's it.

As for cash flow, it's pretty simple. You add up the net present value of all the expected future cash inflows and you minus the down payment and the net present value of all the expected future cash outflows. It's always a good idea to stress test by underestimating inflows and overestimating outflows. There's risks, but there's risk with any investment.

Post: #24

Mike there's even way more to it than that and it's all America specific so you really can't go by what foreigners have to say about this...

If you want to invest for long term profit light industrial warehousing is the way to go. You're not responsible for shit and own all the improvements also only business people are your tennants not struggling families.

I can go way deeper into this if anyone wants to know..

One more thing about property managers.. Your money sits in their escrow and they deduct when repairs are needed if you're absent they use their own people or whoever the tenant calls and deducts from the rent. Youre getting fucked hard at that point.

I can go way deeper into that as well

Post: #25

(09-12-2013 07:52 PM)Que enspastic Wrote:  

(09-12-2013 07:07 PM)j r Wrote:  DC, where the rents are really quite insane. It's not as bad as New York, but in New York the for sale prices are even higher.

My long term plan is to forget trying to pay off an unaffordable mortgage in any of London/Melbourne/New York/Hong Kong. I'll just rent instead, still saving though, and ultimately aim to buy something in Bangkok in the city centre if anything (condominium maybe, if Thai property law allows it) later on in life.

In those cities I agree; although I really only know New York well. There are parts of Brooklyn, however, where I would buy a house for the right price.