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Forum » Property is NOT how you make money..srs
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Thread: Property is NOT how you make money..srs

post 1540478131 01-13-2018, 08:32 AM
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Originally Posted By milesgiles1⏩
A moderately successful small business or side hustle is going to return a lot more than 10% if it's at all scaleable.

Will look up long term average property price rises when not on mobile. Think in the uk it's probably in the 6-7% range over 40 years, and probably less in the States. For an average guy on an average salary, that isn't going to make you rich. Comfortable yes, but not rich.
You mad I can get infinite returns if I leverage debt properly?

Yeh you mad
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post 1540478421 01-13-2018, 08:36 AM
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Originally Posted By the700level⏩
You mad I can get infinite returns if I leverage debt properly?

Yeh you mad
The amount of debt anyone reputable would lend you is usually a multiple of your salary, which in your case I'm pretty sure isn't infinite.

So that's drivel isn't it.
post 1540480541 01-13-2018, 09:11 AM
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post 1540482331 01-13-2018, 09:41 AM
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I saved like a dog and bought my first house outright. Now each month I am saving £500 plus per month rental, that alone is making things easier. Once I have finished renovating the property I will start saving for a large mortgage payment on a property that needs work or buy outright again. I highly recommend you doing this if it's viable with your financial situation.

I have one friend who did a house up to live in while renting 3 rooms in the property. That has given him a lot of equity, so I wouldn't write off property because it's a money maker.

Also, I agree with OP, Corbyn wants a rental state where landlords are punished.
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post 1540484171 01-13-2018, 10:04 AM
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To put things in perspective, here are some stats about the costs of running my 4 bedroom house in Ontario:

City taxes: $4,600 per year
Natural gas for forced air heating and hot water tank: approx $1,300 per year
Water and sewage fees: approx $600 per year
Electricity: approx $700 per year
Total: about $7,200 - give or take.

This is obviously not counting small random expenses like furnace filter, general maintenance, outdoor stuff supplies like caulking, paint, light bulbs, etc, NOR big ticket maintenance stuff like roofing, driveway sealing, and what not. Don't forget to that when you own a house you will now have to buy a ****load of stuff that you would not normally buy if you rented an apartment or a condo.

Believe me, when you calculate the TRUE cost of owning a house, it is far less attractive than morons on this forum think.

People create a narrative that fits into what they believe and/or to justify their decision. Nothing new here.
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post 1540491031 01-13-2018, 11:24 AM
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Originally Posted By MidnightSun⏩
To put things in perspective, here are some stats about the costs ofrunning my 4 bedroom house in Ontario:

City taxes: $4,600 per year
Natural gas for forced air heating and hot water tank: approx $1,300 per year
Water and sewage fees: approx $600 per year
Electricity: approx $700 per year
Total: about $7,200 - give or take.

This is obviously not counting small random expenses like furnace filter, general maintenance, outdoor stuff supplies like caulking, paint, light bulbs, etc, NOR big ticket maintenance stuff like roofing, driveway sealing, and what not. Don't forget to that when you own a house you will now have to buy a ****load of stuff that you would not normally buy if you rented an apartment or a condo.

Believe me, when you calculate the TRUE cost of owning a house, it is far less attractive than morons on this forum think.

People create a narrative that fits into what they believe and/or to justify their decision. Nothing new here.
What do you mean by running? Are you renting out or simply living in that house?
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post 1540491121 01-13-2018, 11:26 AM
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It's easy to make money in real estate
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post 1540493481 01-13-2018, 11:54 AM
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Originally Posted By getbig_ttt⏩
What do you mean by running? Are you renting out or simply living in that house?
I am living in that house.
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post 1540496241 01-13-2018, 12:23 PM
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Originally Posted By MidnightSun⏩
To put things in perspective, here are some stats about the costs of running my 4 bedroom house in Ontario:

City taxes: $4,600 per year
Natural gas for forced air heating and hot water tank: approx $1,300 per year
Water and sewage fees: approx $600 per year
Electricity: approx $700 per year
Total: about $7,200 - give or take.

This is obviously not counting small random expenses like furnace filter, general maintenance, outdoor stuff supplies like caulking, paint, light bulbs, etc, NOR big ticket maintenance stuff like roofing, driveway sealing, and what not. Don't forget to that when you own a house you will now have to buy a ****load of stuff that you would not normally buy if you rented an apartment or a condo.

Believe me, when you calculate the TRUE cost of owning a house, it is far less attractive than morons on this forum think.

People create a narrative that fits into what they believe and/or to justify their decision. Nothing new here.
While I agree with you, the location of rental property drastically changes ones perspective/view. Those who have posted who actually do have rental properties seem to be managing them pretty well. pulling contingency money out of your rents every month is an absolute no brainer.
post 1540498921 01-13-2018, 12:50 PM
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Originally Posted By milesgiles1⏩
The amount of debt anyone reputable would lend you is usually a multiple of your salary, which in your case I'm pretty sure isn't infinite.

So that's drivel isn't it.
So you’re talking about traditional mortgage lending

No.
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post 1540499551 01-13-2018, 12:59 PM
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I never once was happy paying rent, and getting nothing out of it myself. That enough is reason to buy a property. brb being told to move after lease or rent goes up.
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post 1540500061 01-13-2018, 01:06 PM
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Originally Posted By FreedomPenguin⏩
I never once was happy paying rent, and getting nothing out of it myself. That enough is reason to buy a property. brb being told to move after lease or rent goes up.
You definitely don't live in California.

There's no way to buy a home in about 75% of this state unless you make absurd money.
post 1540503651 01-13-2018, 01:51 PM
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ITT miscers who made money in an almost decade long bull market reference a huge bull run as disproving OP's theory

I agree with OP btw in general, although some markets are exceptions.
post 1540504841 01-13-2018, 02:02 PM
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Originally Posted By IH8RICE⏩
While I agree with you, the location of rental property drastically changes ones perspective/view. Those who have posted who actually do have rental properties seem to be managing them pretty well. pulling contingency money out of your rents every month is an absolute no brainer.
Agreed. Also, at the end of the day, you have to ask yourself whether you really want to go down that road all the way. I'm always a bit peeved when I hear Donald Trump real estate wannabes clamouring that real estate is the way to go. It has its share of risks and downsides just like any other business. I'm just a middle class professional here and I can't be asked to extend myself financially to buy a couple of other properties and rent them out. My wife and I both have full time jobs and we sure as chit don't want to deal with all that noise.
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post 1540510611 01-13-2018, 03:08 PM
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Originally Posted By MidnightSun⏩
Agreed. Also, at the end of the day, you have to ask yourself whether you really want to go down that road all the way. I'm always a bit peeved when I hear Donald Trump real estate wannabes clamouring that real estate is the way to go. It has its share of risks and downsides just like any other business. I'm just a middle class professional here and I can't be asked to extend myself financially to buy a couple of other properties and rent them out. My wife and I both have full time jobs and we sure as chit don't want to deal with all that noise.
Renting can be a serious PITA. It once took me 3-4 months to evict someone and another month to clean up. Had some STEM students I was renting to that would call me to change a fuking lightbulb or flip a breaker in a panel. Stupid af! Anymore I only rent to certain friends, slight discount but I still make a profit and I know they’re clean and can fix minor issues.

I do have a property in a tourist area, during a week long rally I can charge 6-10K for the week, and I use it as a Air BnB the rest of the year. I pay my cousin a bit to look after it and clean up.

I used to live at every property I own, I just didn’t sell it. I also lucked out buying the other two in Denver before everyone started moving here.

Definitely a good side gig if you have the down payment and the right market in your area. All in all I agree with OP though.
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post 1540511571 01-13-2018, 03:19 PM
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property and or house is not the investment it used to be

too many hooligans on the take in the banks

thank the jews
post 1540533291 01-13-2018, 06:48 PM
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Originally Posted By MidnightSun⏩
To put things in perspective, here are some stats about the costs of running my 4 bedroom house in Ontario:

City taxes: $4,600 per year
Natural gas for forced air heating and hot water tank: approx $1,300 per year
Water and sewage fees: approx $600 per year
Electricity: approx $700 per year
Total: about $7,200 - give or take.

This is obviously not counting small random expenses like furnace filter, general maintenance, outdoor stuff supplies like caulking, paint, light bulbs, etc, NOR big ticket maintenance stuff like roofing, driveway sealing, and what not. Don't forget to that when you own a house you will now have to buy a ****load of stuff that you would not normally buy if you rented an apartment or a condo.

Believe me, when you calculate the TRUE cost of owning a house, it is far less attractive than morons on this forum think.

People create a narrative that fits into what they believe and/or to justify their decision. Nothing new here.
how much you paid for the house?
post 1540576091 01-14-2018, 07:49 AM
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Originally Posted By the700level⏩
So you’re talking about traditional mortgage lending

No.
So who is fronting you the $? I'm sure we'd all like to know
post 1540576891 01-14-2018, 08:03 AM
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best ROI is usually just flipping any items you can find at a reasonable price and finding specific buyers


IE: Vintage 80s skateboard at goodwill for $5.99. Flip on Ebay for $400

This does require a lot of hustle and time but it beats any stock market pick without the anxiety of market trends
post 1540577511 01-14-2018, 08:12 AM
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Originally Posted By milesgiles1⏩
Here's the thing though.. how are you going to crystallise that 184k 'profit'..?

I'm not saying it isn't real money, it is, but unless you downsize or move somewhere cheaper you aren't going to see that money. You have just ensured you can afford to buy something similar if prices were to rise quickly
Not sure how mortgages work where you are (probably very different to here), but in Aus. you can increase the mortgage if your property increases in value. So you effectively 'cash out' profits without paying capital gains tax or other transaction costs.

I.e 500k property
(400k) loan equals
100k equity

[property value increases to 700k]

700k property
(560k) loan equals
140k equity

And you now have a 160k line of credit AKA access to your capital.

Good way to make tax free gains IMO, although it depends on the property increasing in value. The ability to safely leverage money is the big drawcard for property, you can magnify your gains massively by borrowing large amounts of money.
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post 1540582651 01-14-2018, 09:34 AM
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Originally Posted By keels141⏩
Not sure how mortgages work where you are (probably very different to here), but in Aus. you can increase the mortgage if your property increases in value. So you effectively 'cash out' profits without paying capital gains tax or other transaction costs.

I.e 500k property
(400k) loan equals
100k equity

[property value increases to 700k]

700k property
(560k) loan equals
140k equity

And you now have a 160k line of credit AKA access to your capital.

Good way to make tax free gains IMO, although it depends on the property increasing in value. The ability to safely leverage money is the big drawcard for property, you can magnify your gains massively by borrowing large amounts of money.
You can effectively do the same here with equity release, but the last time I looked it was considerably more expensive than the original mortgage. Pensioners groups have warned against these schemes as being a rip off, and always advise people to move house instead. Don't know if that's the same in aus.
post 1540582861 01-14-2018, 09:37 AM
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Originally Posted By vulgoo⏩
how much you paid for the house?
$462,500. Not willing to reveal which city I live in. I live in a major city in Ontario, Canada.
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post 1540583261 01-14-2018, 09:41 AM
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Originally Posted By milesgiles1⏩
Property is to store wealth already accumulated. It is not the way to get rich in the first place.

So many miscers come on here, particularly in a rising market, say 'huh duh' I'm getting into real estate, going to pay off this one in 6.13 years (back of an envelope calculation based on fantasy figures) 'then I'm getting a multi occupancy huh duh and I'll be on that passive income retirement when I'm 35' etc etc..

Absolute piffle. Governments, and markets, can't just let property go up higher than earnings indefinitely. You end up with a nation of renters who feel they are being extorted and will vote for someone who taxes property wealth (viz, Corbyn in the UK).

Any idiot can look at the last few years of the housing market and think ' this is where I need to be'. It doesn't work like that. You may well have made money the last few years, in fact if you bought after 2009 you almost certainly did. Doesn't make you Warren Buffet.

Cliffs/life advice. Get a skill. Educate yourself. Get a side hustle. Stop looking for shortcuts. Forget the words passive income. Live within your means, acquire capital, invest said capital wisely. Eventually you may feel some of your wealth should go into real estate. There ain't no easy road.
Investing is always contextual. You're post is invalid. It honestly sounds like you just figured this out for yourself and are so arrogant that you think no one else has came to this conclusion lol. How much money did you lose, op?
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post 1540583511 01-14-2018, 09:45 AM
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Originally Posted By rectifryer⏩
Investing is always contextual. You're post is invalid. It honestly sounds like you just figured this out for yourself and are so arrogant that you think no one else has came to this conclusion lol. How much money did you lose, op?
Haven't lost a cent.

You're.
post 1540584011 01-14-2018, 09:52 AM
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Originally Posted By milesgiles1⏩
You can effectively do the same here with equity release, but the last time I looked it was considerably more expensive than the original mortgage. Pensioners groups have warned against these schemes as being a rip off, and always advise people to move house instead. Don't know if that's the same in aus.
Are you from UK? Similar lending environment over there as far as I am aware, whereas USA for example is much different.

The lending is the main reason I like property anyway. You can technically leverage into shares or cryptoassets if you want, but the volatility is way higher.

Over here for example, you can borrow at 5% interest rate for a property and borrow up to 90% of the property value. Shares, in contrast, are 7-10% interest rate and you can only borrow 60% for blue chip shares.

It is a pretty safe bet to leverage into property IMO. I have 800k debt in property and I am more worried about my 5k investment in crypto lol.

Even if the property grows at 5% per year, that is still 30k annual growth on a 600k asset. It's a very different environment in the UK though: I think property in Aus. is good because
- the population is growing at 350k per year,
- 90% of population growth is in the main 4 capital cities
- 70% of property owners are homeowners (i.e not investors)
- loans are full recourse - meaning you can't walk away from the loan like in the US subprime crisis
- and also the lending environment mentioned above.

For me it seems like the safest way to invest money, it is a set and forget strategy - whereas I am looking at my crypto holdings every 2 hours.
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post 1540586231 01-14-2018, 10:26 AM
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Look into seller financing as well op. Huge benefit to real estate if you know what you’re doing.
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Originally Posted By keels141⏩
Are you from UK? Similar lending environment over there as far as I am aware, whereas USA for example is much different.

The lending is the main reason I like property anyway. You can technically leverage into shares or cryptoassets if you want, but the volatility is way higher.

Over here for example, you can borrow at 5% interest rate for a property and borrow up to 90% of the property value. Shares, in contrast, are 7-10% interest rate and you can only borrow 60% for blue chip shares.

It is a pretty safe bet to leverage into property IMO. I have 800k debt in property and I am more worried about my 5k investment in crypto lol.

Even if the property grows at 5% per year, that is still 30k annual growth on a 600k asset. It's a very different environment in the UK though: I think property in Aus. is good because
- the population is growing at 350k per year,
- 90% of population growth is in the main 4 capital cities
- 70% of property owners are homeowners (i.e not investors)
- loans are full recourse - meaning you can't walk away from the loan like in the US subprime crisis
- and also the lending environment mentioned above.

For me it seems like the safest way to invest money, it is a set and forget strategy - whereas I am looking at my crypto holdings every 2 hours.
Yes uk

Tons of articles online, lots of different types of equity release. Offered by both insures and building societies as 'reverse mortgages'

Honestly I think they are immoral. I doubt one person in a hundred understands what they are about. I'd be very concerned if my parents did it. Anyway that's a different conversation.

Hope you are right in your prediction, obviously the 800k is relative to the equity you have and your salary. Not saying you have done, but history shows people tend to borrow up to their limits when it comes to houses, so a sharp rise in interest rates or sudden drop in salary can be disastrous.
post 1540587961 01-14-2018, 10:45 AM
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Originally Posted By milesgiles1⏩
Yes uk

Tons of articles online, lots of different types of equity release. Offered by both insures and building societies as 'reverse mortgages'

Honestly I think they are immoral. I doubt one person in a hundred understands what they are about. I'd be very concerned if my parents did it. Anyway that's a different conversation.

Hope you are right in your prediction, obviously the 800k is relative to the equity you have and your salary. Not saying you have done, but history shows people tend to borrow up to their limits when it comes to houses, so a sharp rise in interest rates or sudden drop in salary can be disastrous.
Yeah a lot of people are uneducated and unaware of the risks. And life can come at you hard - I just lost my job a few days ago completely out of the blue as it happens, which is why it is good to have a buffer of at least 20k for a rainy day.

As for the reverse mortgage, I don't see it as a bad thing - similar thing to a line of credit. It can help out cash poor/asset rich retirees who don't have the liquidity to pay their bills.

Anyway, property is definitely not a get rich quick scheme. You need a lot of capital just to get into the market these days...I would say it is a very safe way to compound existing wealth though.
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Originally Posted By MidnightSun⏩
$462,500. Not willing to reveal which city I live in. I live in a major city in Ontario, Canada.
Kathleen Wynne is coming for you. Shes gonna tax your foreskin brah.
how can she neg... HOW CAN SHE NEG!!! HOW?!
post 1540615431 01-14-2018, 03:04 PM
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Originally Posted By keels141⏩
Yeah a lot of people are uneducated and unaware of the risks. And life can come at you hard - I just lost my job a few days ago completely out of the blue as it happens, which is why it is good to have a buffer of at least 20k for a rainy day.

As for the reverse mortgage, I don't see it as a bad thing - similar thing to a line of credit. It can help out cash poor/asset rich retirees who don't have the liquidity to pay their bills.

Anyway, property is definitely not a get rich quick scheme.You need a lot of capital just to get into the market these days...I would say it is a very safe way to compound existing wealth though.
This this and this.

I cannot stress this enough, coming in with a small down payment and having your paycheck just cover your monthly expenses (with or without tenants) is a serious risk. If your mortgage is a variable rate, you will most likely see another interest rate increase coming in soon, in most countries.

Also people completely fail to realize to expenses related to property ownership, specially if they aren't handyman. You will need furnace, AC, roof, plumbing, exterior, etc repairs at some point. I understand that the average joe probably can't redo a roof himself/herself, but if you call a plumber/electrician every time you get any related issues, you will not get ahead very fast.
how can she neg... HOW CAN SHE NEG!!! HOW?!
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