Is it a good time to buy an investment property

A

ashatet

I do not trade anymore but I have some investments in the equities and metals etc in the 401K.

Is it a good time to buy a condo or a town house for an investment purposes. Or should I just hold on to the cash?

I understand that the prices can fall another 10-20%, but one can almost never catch a bottom.

I have done some math and the rent should pay for the condo if I get a 15 year loan.

On the other hand, if I can pay with cash, there are some compelling deals in foreclosures.

The only way I lose big is if I can not rent the property out and the association fees go through the roof with large number of vacancies.

I have respect for the ET community, so I am expecting a well balanced response. Please no perma bears with their doom and gloom scenarios.
 
If you rent it out, how long would it take you to recuperate your money back, assuming the tenants would stay for the long haul? Ideally, within 7 years and you start seeing profit is the best way to go.
 
Not yet, another 6% discount is coming up. Wait till mid 2011

If you have cash, do covered combos, covered calls on SPY and short put positions. (50/50)

You will get a better return than the hassles of overpriced property and pain in the ass tenants.

Condos you have HOA fees that can increase quickly, surprise fees to cover issues, taxes,repair costs,the time you have to spend managing the whole deal, dealing with pain in the ass people etc..

Not worth it.
 
I'm in the real estate investment business and I bought 3 investment property's the last 2 years


Personally I think the bottom has already hit(In the Houston area)

I will second the opinion of the previous poster,stay away from condos and townhouses
 
Quote from ashatet:
----Is it a good time to buy a condo or a town house for an investment purposes. Or should I just hold on to the cash?......there are some compelling deals in foreclosures.
----The only way I lose big is if......
----doom and gloom scenarios.
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1) Real estate and stocks tend to perform "well" from the middle of the decade until the end of the decade. The first few years of the decade tend to be "bad". You can sidestep that by waiting until 2013-2015 before buying and hoping for capital gains potential on the property in addition to rent and depreciation.
2) You may underestimating the downside potential with buying property now. There are many ways to "lose big". :eek:
 
I sold all my real estate holdings mid 2007 when I thought stock market was getting toppy. And I still believe until unemployment gets back down to 5.5%, real estate is a bad investment. I never want to be first to the party when buying, and there are always great deals in foreclosures, but I think when unemployement gets to 5.5% there will be tons more of discounted real estate foreclosures.

Past three years I have been concentrating on tax lien notes.
 
Quote from Handle123:

when unemployement gets to 5.5% there will be tons more of discounted real estate foreclosures.
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Agree w/ the last post... RE will keep dropping until jobs really pick up.

The question is: How can you afford to buy a house when you don't have a freakin' job ??
 
Thanks to all for some great points. My reason for wanting to make this investment is the lack of better opportunities elsewhere. I am also ready with the possibility that I will just keep the property to myself. I already have quite a bit of investments in foreign bonds, equities, agriculture and metals.

I understand that rental property is a catch 22. You want good tenants, but good tenants are sensible people, but sensible people generally own homes and not rent them. So a good renter is an oxymoron.

A good rental income does not hurt in retirement either. Just about all my friends have suggested me to stay away from being a landlord. I will see how it goes and start one at a time.




Quote from KINGOFSHORTS:

Not yet, another 6% discount is coming up. Wait till mid 2011

If you have cash, do covered combos, covered calls on SPY and short put positions. (50/50)

You will get a better return than the hassles of overpriced property and pain in the ass tenants.

Condos you have HOA fees that can increase quickly, surprise fees to cover issues, taxes,repair costs,the time you have to spend managing the whole deal, dealing with pain in the ass people etc..

Not worth it.
More...
 
Quote from jalee25:

Agree w/ the last post... RE will keep dropping until jobs really pick up.

The question is: How can you afford to buy a house when you don't have a freakin' job ??
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Lol , he already has considerable investments in foreign bonds, equities , agriculture and metals....., maybe he dont need that freakin' job.
 
considerable as in a considerable portion of my portfolio. I do need my job though and I intend to keep it...


Quote from Spiker:

Lol , he already has considerable investments in foreign bonds, equities , agriculture and metals....., maybe he dont need that freakin' job.
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