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Considering that rent over that period would have been more than the sum of my house payments, you have to really try hard to not recognize it as a very good investment.
Of course not every transaction or market is like this. That was my original point, your blanket statement was a silly cliche and shouldn't be treated as anything else.
As for me reaching I am not. I am a contractor by trade and labor is what most people get wrong. I hear all the time that people did this or that themselves. When they could easily have hired it done for less and put in a few more hours at their day job. People forget that labor has a value. My competition forgets this as well. The average contractor bids a job as materials plus labor. They consider labor profit and it's not, labor is money I would be making anyway regardless. To properly bid a job we generally take labor plus materials and triple it. That's not the exact formula but it simplifies it
Your market is crazy! These dumps wouldn't bring half what they are asking here. I also see that Safeguard was doing the property maintenance and that tells me there will be plumbing, mold, and electrical issues. No qualified contractor will work for Safeguard. When you see those orange stickers be afraid be very afraid.
http://www.zillow.com/homes/for_sale/fore_lt/61948391_zpid/50000-125000…
http://www.zillow.com/homes/for_sale/fore_lt/61939928_zpid/50000-125000…
http://www.zillow.com/homes/for_sale/fore_lt/61939005_zpid/50000-125000…
http://www.zillow.com/homes/for_sale/fore_lt/61939005_zpid/50000-125000…
Also most people rent far more than what they need. America is against living modestly for the most part.
The argument that you have to live somewhere is nothing more than justifying a bad decision. I can rent an adequate place for very little. If you would rent a cheap place and invest the extra every month for 10 years you would have far more money than your friends who buy homes and put their money back into the house.
The Shop
Using his cousin's case as an example, he was focused on the purchase and selling price to note what he considered a low return.
The real numbers should concern total outlay (sum of all house payments plus repairs, etc. that a landlord would handle in a rental) vs. total of rent payments during that period. Without knowing that market, it's probably a safe assumption that the cousin's outlay was higher than rent initially, but gradually became lower. In our situation it only took a year or so before rents rose above our payments, and pretty much our total outlay. That doesn't even factor in our tax deduction benefit or the tax free status of the proceeds of selling our home.
Obviously if you live in an area where homes simply don't appreciate and rents are stagnant, it could be a different outcome and purchasing a primary home as a short term investment can be ill advised, but my experience isn't a rarity. It's probably the norm here in the Northwest.
Moses Lake was growing very rapidly for a while. Unbelievably cheap power and relatively cheap labor with a community college that would tailor programs for just about any industry. One of their largest employers was that air bag manufacturer (Takata?) and I think they've really curtailed production. But they have a HUGE runway at their little airport that anything can fly in and out on, and 300+ days of sunshine each year. For decades each and every JAL pilot did training in Moses Lake because they never missed flight time due to weather.
But Moses Lake is far different of a housing market than ours is.
And labor in this case doesn't really apply because I'd be doing the yard work in a rental anyway.
As for whether people buy or rent more than what you think they 'need', that's an entirely different subject and not relevant to this comparison.
I had a couple friends out in Ca. that sold house after house and made an absolute killing. Ended up leaving the state in the end as it was too expensive to buy a house.
My house is paid for. I bought it at a tax sale gutted it and sunk a healthy chunk in it to get it how I wanted. If I had sold then I would have netted a nice sum. Instead every year I live there I lose money.
The amount I have tied up would be netting me a far greater return if I had it in play.
The little woman loves our house and it's where she wants to be so I continue on this path.
I would sell it all and not even have a house. I'm tired of being a slave to it all. They make some damn fine RV's and my gypsy soul liked to travel.
You aint foolin' me country boy.
A house boat in key west is also a good option. I just don't want to cut grass, maintain a home, or deal with people. I like wide open spaces and no one around to talk to.
Pit Row
Anyone painting with such a broad stroke are up to no good IMO. There are good investments and bad. That applies to buying a home as well.
If you have a couple of million and you can't get a 4% return you should fire your broker. I can guarantee a 10% return through Tax liens backed by the state of Indiana. Anyone that isn't making greater than 4% on their investments isn't trying.
Hahahahaha.
I guess some sucker will believe that from you, but nobody is getting that right now.
We are making more than 4% on some of the more risky stock investments, but nobody is seeing those type of returns right now. That goes from Ronald Blue to lesser known as well.
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