Comments on: Real Estate – My Unintentional Rental Property https://www.writeyourownreality.com/real-estate/real-estate-my-unintentional-rental-property/ Aggressively pursuing a dream is the only way to write your own reality. Documenting my path of turning dreams into investments and success! Mon, 30 Nov 2015 00:02:06 +0000 hourly 1 By: writing2reality https://www.writeyourownreality.com/real-estate/real-estate-my-unintentional-rental-property/#comment-40 Sat, 16 Feb 2013 05:11:31 +0000 http://www.writeyourownreality.com/?p=95#comment-40 Personally, I think it depends on quite a few things, but can be broken down into couple of main areas of thought. This first is life priorities, which relates to family/kids, and thus real estate. Generally speaking, if one is to plan on “settling down” and having children, I think the stability of a home can be immensely rewarding in a manner that cannot be shown on the personal income statement. While the actual purchase of the home should be subject to some guidelines, the purchase of the house isn’t made solely on the grounds of an investment gain. Now, if that isn’t the goal, due to anything (ex. geographic freedom), AND someone has the discipline to invest the difference, then renting for your primary place of residence can be a rewarding financial decision.

Now, the second is investing in real estate. I am a full supporter of this type of investment. While obviously the house I currently rent is not an example of this, I did not purchase this house with any sort of investment mentality. As a result, it fails every single method of deciding on a rental property. However, purchasing a rental property that will cash flow, and provide an solid cash on cash return (12% plus) is an outstanding investment. This doesn’t account any appreciation or debt pay down, which would further your return on investment.

Shiller, for the most part is speaking of the first scenario above. Too many people went into home ownership assuming their primary residence would appreciate and make them money. This is entirely the wrong mentality to have. Purchase a home that is LESS than you can afford, with a minimum of 20% down, and with the intangible benefits as your reason to buy. If you want investment properties, that is an entirely different conversation, and an entirely different set of calculations. Personally, I am bullish on the second scenario of real estate investing, and open on the first, which is an independent and not necessarily purely financial decision.

Hope that answers your question, and thank you, because it has fostered a great post idea!

]]> By: Dividend Mantra https://www.writeyourownreality.com/real-estate/real-estate-my-unintentional-rental-property/#comment-39 Sat, 16 Feb 2013 01:48:10 +0000 http://www.writeyourownreality.com/?p=95#comment-39 What’s your thoughts on real estate going forward?

I often think I’ll continue to rent for the time being. Once one is financially independent, then you are naturally geographically independent as well. Owning a home could potentially negate some of those benefits, even if you rent it out.

I’m convinced renting is cheaper over the long run. Even if it weren’t cheaper, the flexibility and liquidity would be worth the premium.

Prof. Shiller actually blasted real estate recently, stating that most people are better off renting and investing the difference (something I’m doing):

http://www.businessinsider.com/robert-shiller-home-investment-a-fad-2013-2#ixzz2KEJiFmRT%29that

Best wishes!

]]>