RogerKint
RogerKint
Joined: Dec 5, 2011
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December 28th, 2011 at 9:19:08 PM permalink
EvenBob, you're forgetting something. Before World War ll our currency was on a gold standard so prices remained comparably steady by today's standards. This is no longer true as money is now printed out of thin air. This causes large bubbles/fluctuation in asset pricing, including real property values.

In my opinion it is a great time to buy. A real estate investor can actually make profit on rental property. A few years ago this wasn't the case and was a clear indicator that prices were over-inflated. The problem now is getting a loan for a future rental and finding a decent property manager.
100% risk of ruin
EvenBob
EvenBob
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December 28th, 2011 at 9:59:54 PM permalink
Quote: RogerKint

Before World War ll our currency was on a gold standard



Real estate prices are driven by one thing and one
thing only: Supply and demand. No demand, so
no supply is needed. Detroit has a housing glut
because there's no demand. Vegas has the same
problem, but to a lesser degree. If demand in Vegas
never goes up, housing prices will remain depressed.
"It's not enough to succeed, your friends must fail." Gore Vidal
RogerKint
RogerKint
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December 28th, 2011 at 10:02:26 PM permalink
You can demand a house all you want but if the average american doesn't have the means to purchase it then price isn't affected. Purchase power impacts price more than anything. When credit is eased again people will spread out of their parent's and friend's basements and buy. Then we'll go through all this again.

Buying a house to rent until retirement is a modest plan as long as the problem of finding a good property manager is solved. In my own personal experience dealing with property managers out of your (the owner) area is a problem due to the fact that the property manager doesn't feel as accountable.

If it were me I would go the RV route and use the cash I saved to blow on craps and womens.
100% risk of ruin
pacomartin
pacomartin
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December 28th, 2011 at 10:56:18 PM permalink
Quote: RogerKint

Buying a house to rent until retirement is a modest plan as long as the problem of finding a good property manager is solved. In my own personal experience dealing with property managers out of your (the owner) area is a problem due to the fact that the property manager doesn't feel as accountable.



Exactly. I see some foreclosures going for half the price that the owner paid sometimes in the last 5 years. But some of these properties can still command a good rent. Some savvy investors with access to cash are buying up these properties and turning them into rentals.

That said, I still wouldn't live in the midwest for 6 years and think it makes sense to own a rental property in Vegas. You may be better off buying a distressed property in your home town, managing it for 6 years, and then sell your personal residence move to Vegas and keep the other house as investment income. At least for six years you will have personal control and when you move, you should know someone in your home town that will be a decent property manager.
FleaStiff
FleaStiff
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December 28th, 2011 at 11:49:10 PM permalink
Remote property management is difficult. Six years from now you would be remote property managers if you move to Las Vegas. The people you know "back home" drift away, the real estate firms know you are an out of state owner and treat you as one.

I think it would be better to buy in Vegas at these prices ... just make sure you get value. Don't buy a lawsuit over the title and don't buy a house with wrecked innards. I understand much of Vegas has HOA rules regarding exterior upkeep and the worst thing you want to face is being an out of state owner with some jerk going around your property measuring the height of your grass or imposing a fine because your tenants did not take in their garbage cans promptly.

RV? If the lifestyle is for you... fine. Many RVs get put up for sale at the six month mark. Yet some of those upscale Class A parks are selling lots for far more than houses cost.
odiousgambit
odiousgambit
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December 29th, 2011 at 2:14:57 AM permalink
one thing to never dismiss about investing in a home: the leverage you typically get can not be duplicated with any other investment. For the short term that makes it more risky, but for the 30+ year investor it is virtually risk free in most areas of the country [not sure about Vegas!]

PS: pundits are saying that renting makes plenty of sense these days. There is some sort of argument to be made. One thing, it is difficult to compare real estate to other investments; there are a lot of expenses involved: taxes, maintenance, and insurance costs for sure.
the next time Dame Fortune toys with your heart, your soul and your wallet, raise your glass and praise her thus: “Thanks for nothing, you cold-hearted, evil, damnable, nefarious, low-life, malicious monster from Hell!” She is, after all, stone deaf. ... Arnold Snyder
pacomartin
pacomartin
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December 29th, 2011 at 4:12:31 AM permalink
Quote: odiousgambit

For the short term that makes it more risky, but for the 30+ year investor it is virtually risk free in most areas of the country



What you mean is that historically it has been virtually risk free. What about the Japanese Asset Price Bubble which ended just over 20 years ago? To qualify home-owners they invented first the 60 year, and then the 120 year mortgage. Most of those homeowners are still underwater and will be for decades more. In many cases the next generation will be underwater as well.

I suppose everyone can say "we don't live in historic times" at any point in history, but I'll say it anyway. "We don't live in historic times!" We've only had this level of debt for a few years in WWII as the government outlays were four times their revenue. Now we have that same kind of debt with only two comparatively minor wars. What if we have to fight a real war, something comparable to the conflicts of the past. Who will take our paper money then?
NicksGamingStuff
NicksGamingStuff
Joined: Feb 2, 2010
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December 29th, 2011 at 4:16:35 AM permalink
Rent to me I'm starting to get tired of my small apartment.
MakingBook
MakingBook
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December 29th, 2011 at 7:19:23 AM permalink
Indeed the long distance landlord is a huge concern. What if I paid someone to clean the place each month. Not a huge expense, and they could be check out the property and report back to me each month?

Also, I have a friend that would rent from me from Sept - April. What would happen to an empty house in Summerlin from May - August. Would it get trashed?
"I am a man devoured by the passion for gambling." --Dostoevsky, 1871
Wizard
Administrator
Wizard
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December 29th, 2011 at 8:05:11 AM permalink
Quote: pacomartin

But the OP was talking about purchasing a house in Vegas, and living the in the Midwest for 6 years while renting the house as an absentee landlord. He would then move to Vegas to take over the rental as his retirement home. That only seems like a good decision if you think house prices will zoom out of control in the next few years.



I don't think you need to assume that. Even if prices maintain current levels it will be like getting the renters to pay the mortgage for six years. I'm going to go against you and Bob and approve the idea.
It's not whether you win or lose; it's whether or not you had a good bet.

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