The more expensive a home, the harder it is to rent for cashflow. Expenses are higher and renters who can afford that are generally able to buy. Only people who rent are those who are in transition: medical residents, professionals on temporary assignment, those waiting for their houses to be built/renovated; while supply is high because a lot of owners who want to sell will rent to defray some of their carrying costs.
Is Real Estate a much superior inflation hedge compared to gold?
- Thread starter Daal
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The more expensive a home, the harder it is to rent for cashflow. Expenses are higher and renters who can afford that are generally able to buy. Only people who rent are those who are in transition: medical residents, professionals on temporary assignment, those waiting for their houses to be built/renovated; while supply is high because a lot of owners who want to sell will rent to defray some of their carrying costs.
I don't mean to offend any of you guys, but quality of life is kind of important to me and living in the sticks with 20 properties is not my idea of a good life. I'm not saying it's not heaven for others. Out in very rural areas you probably have a nice fertile area of rednecks with bad credit and 6 kids that need rental homes vs an apt. Not judging here but let's be honest about who these people are the issues one has to deal with when renting to these people. I know I am painting a broad brush here but I rather live in a large educated city where I have to pay a premium for quality of life but at least I live a high quality life.
I think this thread is getting further away from the original topic. I actually am in agreement with most of you that if one is looking for a safe and stable investment the last thing I would buy is Gold or Silver and real estate is stable. But as far as an inflation hedge I still hold that Gold is better.
With regards to managing tens of properties and scaling your wealth, I have friends that do that and it's a full time job. In fact, it's a 24 hour 7 day a week job with tenants calling at the absolute worst times for emergencies and what have you. One buddy of mine it ruined his marriage. But to each his own. I prefer trading over managing rentals although admittedly most on ET would probably be far better off in real estate vs trading.
I think this thread is getting further away from the original topic. I actually am in agreement with most of you that if one is looking for a safe and stable investment the last thing I would buy is Gold or Silver and real estate is stable. But as far as an inflation hedge I still hold that Gold is better.
With regards to managing tens of properties and scaling your wealth, I have friends that do that and it's a full time job. In fact, it's a 24 hour 7 day a week job with tenants calling at the absolute worst times for emergencies and what have you. One buddy of mine it ruined his marriage. But to each his own. I prefer trading over managing rentals although admittedly most on ET would probably be far better off in real estate vs trading.
Yeah I get the elasticities. There are pros and cons to renting out to the "transitioners" as well one being the dead time in between rentals that eats into yield. Again, it will come off as condescending but I would not be terribly interested in dealing with the low end market that offers the attractive yields. Look, I grew up with a lot of these people. The last thing I want is to have them as my renters. I have enough problems in my life, I don't need to adopt theirs as well.
No,the money did not ruin the marriage. Getting phone calls 7 days a week, on holidays, on weekends, at 2 effing in the morning. THAT ruined the marriage.
Yes you are painting a broad brush. I thought someone with your intellect would understand the socio economic diversity in America. Apparently that's not the case. Go back to your bubble.
Yeah dude, I know it well. I've lived in it my whole life. That is the problem. LOL.
I didn't see this post. There can be problems. I think there are generally problems with renters at levels.
My buddy sold his manufacturing business a few years ago and started buying a few of these. He's got some interesting stories about his tenants. He owns 10. He's starting to hire managers so he isn't getting the calls at night. Like most businesses, it requires capital to get a scale that you aren't the one fixing the toilet at 2AM.
Like you, I don't want to own rental real estate. However, a lot of my employees live in houses like this because they can't afford anything else. Hard working family oriented guys who didn't win the "pick 6" in the ovarian lottery.
It's not an issue of affordability, it's an issue of credit. You can be poor in this country but you do have to pay your bills. I have friends that have gone through 2 bankruptcies and barely making a living wage and they are homeowners. There is usually "more" to the story then just not winning the "pick 6". But that is a topic for another thread I suppose.