Home › Forums › Closed Forums › Buying and Selling RE › Many New Pigglords- Why?
- This topic has 18 replies, 11 voices, and was last updated 12 years, 8 months ago by
exsdgal.
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March 22, 2012 at 3:52 PM #19629March 22, 2012 at 4:02 PM #740377
outtamojo
ParticipantMost of our net worth was in 403b equity funds, and cash laying around earning nothing. In our view, housing prices in pretty nice areas were better than rent neutral with 20-25% down less costs(including prop management). Seemed like a nice way to way to earn a few hundred bucks a month and at the same time leave something for our kids should our currency go to the crapper.
March 22, 2012 at 5:05 PM #740379sdrealtor
ParticipantI’d add that Piggs mostly missed out of the fabulous opportunity to destroy our net worths so we have a problem with too much cash lying around. We have also learned that a large portion of the population is not as careful, frugal and thoughtful about housing as we are. Thus we are fairly certain that there will be another housing bubble in our lifetimes when we can sell our inflated investment properties to the foolhardy masses.
March 22, 2012 at 5:26 PM #740380The-Shoveler
ParticipantWait, Guys isn’t RE supposed to only go down in a unstoppable deflationary spiral until at least 2020 or 2025 ?
I mean shouldn’t there be free (or 1 dollar) homes in coastal SD by 2020 ? well at least in TV anyway ?March 22, 2012 at 5:27 PM #740381
CoronitaParticipant[quote=sdrealtor]I’d add that Piggs mostly missed out of the fabulous opportunity to destroy our net worths so we have a problem with too much cash lying around. We have also learned that a large portion of the population is not as careful, frugal and thoughtful about housing as we are. Thus we are fairly certain that there will be another housing bubble in our lifetimes when we can sell our inflated investment properties to the foolhardy masses.[/quote]
Nah… some of us piggs just like finding even more creative ways to destroy our net worths 🙂
March 22, 2012 at 8:08 PM #740384indogirl
ParticipantSome income replacement, you’re not gonna work forever. Have someone else help pay off your properties. Not a bad plan if everything goes smoothly.
March 22, 2012 at 8:37 PM #740385urbanrealtor
ParticipantI think Pigglords would be an awesome band name.
March 22, 2012 at 10:28 PM #740392ParticipantSo would Underwaterealtor
March 23, 2012 at 8:28 AM #740405SD Realtor
Participantmany new pigglords… why?
cash
flow
If you are not cash flowing on a rental then you are simply speculating.
March 23, 2012 at 8:56 AM #740409ParticipantI didn’t go for the best cash flow- I went more for desireable property that sold for a little more rather than cheapest property in area/complex.Mine all have decent views – I figured I could sell them quicker if I decided I didn’t like being a Pigglord and also if a renter had to choose between having a view and being stuck facing the side of a mountain they would choose my place first so less vacancy. I wanna get one more but unless they release the (cough, cough) tsunami, I don’t see anything at all that fits my rental theme any more(ok, maybe 1 house but it’s out of our price range)
Are other Pigglords area diversified? I feel like I should look for something in other parts of the country, like say Seattle, but its much easier buying an area that I know- just have to keep my fingers crossed that sand sun and temperate weather won’t ever go out of style.March 23, 2012 at 10:00 AM #740417an
Participant[quote=SD Realtor]many new pigglords… why?
cash
flow
If you are not cash flowing on a rental then you are simply speculating.[/quote]
I’ll second this. It’s all about cash flow.Also, like flu said, I am more likely to lose 20% in my stock investment than in a cash flow property. Right now, after a good run up in stocks, would be a good time to cash out and move some of the gain I made into something else (RE) that have been beaten up pretty badly.
March 23, 2012 at 10:08 AM #740416CoronitaParticipantIn all seriousness, I’ll tell you why I decided to buy a small rental.
1. I’m much more likely to lose 20+% in the stock market from this point on, versus losing 20+% in a real estate purchase in an area that has already depreciated quite a bit for the past 2-3 years. I need to take money off of the stock market roulette wheel. And this forces me to do it.
Yes, I could also gain 20+% in the stock market, but then I’m not exactly liquidating stock market completely, so if we do see a monster rally, I’ll just earn less….
2. Dollar is going to get trashed…. Imho, staying in cash is suicide… Folks were saying to say in cash back in Sept/Oct/Nov 2011. That would have been a costly mistake for me personally less 15% gain…
3. Loan dollars is cheap … I am in the process of tapping cheap loans to pay myself back. So, I’ll let the banks take the inflation hit.
4. I can cash flow this thing. Ok, maybe it’s not 10% maybe it’s closer to 8%…. Can’t find too many things that can do about 4-5% these days. (Though the rental has more risk, I know…Vacancy,etc)…
5. I didn’t find a problem finding a tenant because where I’m at, hiring has picked up…
Numerous applicants are just 2-3 years on the job (almost fresh grad)… Some biotech folks, some tech folks… Salary for 2 year of experience ranged from about $80 to about $100k…(And yes, I verified the income)….These folks just don’t have the downpayment (yet) and they are just starting out….So perfect candidates for tenants.
6. I need to diversify and count less on stock/bonds/my w2 income, my side business consulting,etc as i get older. When I retire, there will be no social security, there will probably be no medicare, and I’ll probably be paying up the noses in taxes to support everyone stinking baby boomer that still expects their benefits.
Added bonus: Also, I like to try to max out what I can deduct on schedule E:)
7. I don’t have rental property in SD…
March 23, 2012 at 11:36 AM #740431zk
ParticipantBecause I can’t think of a better long-term investment. Basically what flu said.
It’s inflation-protected (rents will go up with inflation), cash-flowing, relatively safe, and, as gravy, has the potential for appreciation, especially since we’re buying near (we hope, we think) the low point in this real estate cycle.
If anybody knows of a better long-term investment, I’m all ears. Really.
March 23, 2012 at 12:05 PM #740436sdsurfer
ParticipantI have more faith in my ability to find a good deal that cash flows and my ability to manage it than I do putting my money in someone else’s hands to do as they please and cross my fingers. I also feel like a home goes up and down, but never to $0 like a stock or other investments can.
I also recall growing up that my grandparents never worked and lived off the cash flow from their various properties in So Cal. All they did was travel around in a motor home going camping and stuff while my parents were off to work. Sure there’s the age aspect, but my mom still works 5 days a week and she is now a grandma and wishing she had a plan a long time ago.
Also…the tax advantages.
March 23, 2012 at 12:10 PM #740437Participant[quote=zk]Because I can’t think of a better long-term investment. Basically what flu said.
It’s inflation-protected (rents will go up with inflation), cash-flowing, relatively safe, and, as gravy, has the potential for appreciation, especially since we’re buying near (we hope, we think) the low point in this real estate cycle.
If anybody knows of a better long-term investment, I’m all ears. Really.[/quote]
Me too. The only people I hear of that have a better investment idea tend to be trying to sell me something. -
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