OT - Dow plunges 1,175 - worst point decline in history

[mg2ride]

Originally Posted by Nooch

This is going to be a potentially stupid question with likely no right answer, but, well, i ask a lot of those...

The majority of my savings (well, virtually all of it, and we're not talking huge sums) is tied up in the market. Let's say roughly two third's of it.

My 'goal' is to at some point invest in a summer rental property.

I would need the money in the market to cover the down payment, but I always look at it and say 'but if I sell this, I'll never have it again.' So I feel like I'm stuck with wanting to always leave my money invested and growing rather than taking a leap and cashing out my chips and doing something else with it all..

The fact that I don't consider money invested as available is really the only way I've been able to stash away some savings..

How do you decide to pull out and do something else, I guess, is the ask?

edit: and i know the disclaimers about free advice being worth what you pay for it

I would try to mentally and physically separate "retirement" investments and general "savings/investments". Retirement falls more into the "must find" category and I think a summer rental property may be more high risk than I would find suitable.

May very likely mean that after funding retirement you have nothing left for general investing.

[Nooch]

Originally Posted by mg2ride

I would try to mentally and physically separate "retirement" investments and general "savings/investments". Retirement falls more into the "must find" category and I think a summer rental property may be more high risk than I would find suitable.

May very likely mean that after funding retirement you have nothing left for general investing.

Yes, the investments I'm speaking about are personal, non-retirement savings. While I was working two jobs I was putting a small amount every month aside into a brokerage account, buying mainly AAPL and some TSLA with a smattering of DIS and GE... really not diversified at all, but AAPL has proven to be a good investment for me..

I think I'm doing 'okay' at my age with my 401k and rollover IRA from a previous company.. It could always be better, but at the moment is about 2 years of my annual salary, with almost 35 years left in the workforce..

[KarlC]

What are the groups thoughts on the AIRBNB IPO ?

They are saying it would be in the $44 - $50 a share range

Part of the reason I ask is we can buy in thru Airbnb's Directed Share Program, tho I'm not sure that really benefits us in any way, but I'm considering it.

.

[likebikes]

Originally Posted by Nooch

My 'goal' is to at some point invest in a summer rental property.

when you say "invest" do you mean invest as in buy a place for vacation family fun or "invest" as in decimals and dollars a care as to what the property is like outside of a spreadsheet?

[bronk]

From what I know, vacation rentals for investment are difficult. Large investment, lots of work with the high tenant turnover, variable income stream. After the 2008 meltdown, I decided to invest in long term rentals (ie., not vacation rentals) and this has proven to be a decent way to buffer the ups and downs of the market and provided a nice income stream. As someone mentioned, townhouses/condos are easier to manage but come with a healthy HOA. Profits are higher if you can be your own manager and don't mind responding to tenant requests.

If you're looking to buy a vacation home that you can use some of the time and rent out the rest of the time then just don't plan to make much money doing it.

[Nooch]

Originally Posted by bronk

If you're looking to buy a vacation home that you can use some of the time and rent out the rest of the time then just don't plan to make much money doing it.

Not looking to make off it, but for it to essentially pay for itself thru the rental income. So, perhaps invest is a shoddy word for it, though it does have the potential to go up in value..

[mg2ride]

Originally Posted by Nooch

Yes, the investments I'm speaking about are personal, non-retirement savings. While I was working two jobs I was putting a small amount every month aside into a brokerage account, buying mainly AAPL and some TSLA with a smattering of DIS and GE... really not diversified at all, but AAPL has proven to be a good investment for me..

I think I'm doing 'okay' at my age with my 401k and rollover IRA from a previous company.. It could always be better, but at the moment is about 2 years of my annual salary, with almost 35 years left in the workforce..

Sounds like a very nice position. My redneck fiends would say that your a "S***ing in high cotton"

[oldguy00]

Originally Posted by Nooch

Not looking to make off it, but for it to essentially pay for itself thru the rental income. So, perhaps invest is a shoddy word for it, though it does have the potential to go up in value..

My wife and I have had some investment properties for about 15 year, condos, that are rented out full time (not vacation rentals).

Unless you are getting a totally sick deal, I would not bother. Given how high real estate prices are now, given that you will likely -not- cover all your expenses via people renting it (mortgage, taxes, upkeep, utilities, etc), you'd likely be better off investing your money and then just buying a property way down the road when you are ready. Still some good 'covid sales' in stocks right now IMHO.

We actually sold a couple of our rentals in September, immediately put the money in oil and bank equities, and have been extremely pleased.

[froze]

Originally Posted by oldguy00

My wife and I have had some investment properties for about 15 year, condos, that are rented out full time (not vacation rentals).

Unless you are getting a totally sick deal, I would not bother. Given how high real estate prices are now, given that you will likely -not- cover all your expenses via people renting it (mortgage, taxes, upkeep, utilities, etc), you'd likely be better off investing your money and then just buying a property way down the road when you are ready. Still some good 'covid sales' in stocks right now IMHO.

We actually sold a couple of our rentals in September, immediately put the money in oil and bank equities, and have been extremely pleased.

How do you see oil doing in the long term considering a lot of countries want to switch off of gasoline cars to battery cars, maybe nickel would be the better investment?

I too have rental properties, they pay me more "dividends" than any stock has ever remotely done. The only loan I have on anything is on my 8 plex and there's not much left on that either. But I got lucky buying my rental properties because I got them below what they should have been selling for, and the market, in general, was still profitable to buy, even my banker was happy with the buys I did, but now...no, I wouldn't buy any real estate to rent where I live, the margins are no longer favorable. I still keep my eye open for stuff but I don't see any new purchases any time soon if ever. The only thing I would consider is a partnership with a big 100 plus unit complex, if the deal was decent, then I would have to sell a couple or all of mine to buy-in.

The only way a person would make a positive cash flow on rentals now, at least where I live, is to pay at least 75% cash down. I know that seems like a high down but you have to remember it's cash flow you want, if the loan is too big there will only be enough cash flow to make the mortgage payment and none going into your pocket after other expenses, and in fact if you have a repair to make you could easily be looking at negative cash flow which means it will be coming out of your pocket and not out of the rental income.

Of course, a person could do what they do in California and other places, they buy rental property knowing they're not going to make any money on the rents, they buy and then in about 5 years they sell hoping to make a profit, but that's sort of like gambling, you can't ever be guaranteed that property values will continue to go up, or go up significantly enough for a decent profit.

[Toddtwenty2]

This is all good advice.

I created a spreadsheet to evaluate property investments. After I input assumptions for all property maintenance over the expected lives and assume one unrented month a year, the best deals I have found on property offer a CAGR of 3-7% over 10 years after paying down principal. This includes some of the nation's better property rental markets like Grand Rapids. I can do some due diligence in stocks and easily get this return with solid dividend appreciation with far less hassle. The only benefit I see in real estate is the ability to easily use leverage, which can be good or bad depending upon the deal you got.

I have owned two rental properties in the past, and people calling you expecting a plumber to be sent out because the shower takes 30-40 seconds to warm up in the morning gets old fast (yes, this happened). I also had a fellow burn a half of a house down with a kitchen fire...

Good luck in your decision. Don't buy it unless you create real assumptions and expect to allocate some of your time to the management. Even property management company interactions take some of your time.

[oldguy00]

Originally Posted by froze

How do you see oil doing in the long term considering a lot of countries want to switch off of gasoline cars to battery cars, maybe nickel would be the better investment?

I too have rental properties, they pay me more "dividends" than any stock has ever remotely done. The only loan I have on anything is on my 8 plex and there's not much left on that either. But I got lucky buying my rental properties because I got them below what they should have been selling for, and the market, in general, was still profitable to buy, even my banker was happy with the buys I did, but now...no, I wouldn't buy any real estate to rent where I live, the margins are no longer favorable. I still keep my eye open for stuff but I don't see any new purchases any time soon if ever. The only thing I would consider is a partnership with a big 100 plus unit complex, if the deal was decent, then I would have to sell a couple or all of mine to buy-in.

The only way a person would make a positive cash flow on rentals now, at least where I live, is to pay at least 75% cash down. I know that seems like a high down but you have to remember it's cash flow you want, if the loan is too big there will only be enough cash flow to make the mortgage payment and none going into your pocket after other expenses, and in fact if you have a repair to make you could easily be looking at negative cash flow which means it will be coming out of your pocket and not out of the rental income.

Of course, a person could do what they do in California and other places, they buy rental property knowing they're not going to make any money on the rents, they buy and then in about 5 years they sell hoping to make a profit, but that's sort of like gambling, you can't ever be guaranteed that property values will continue to go up, or go up significantly enough for a decent profit.

So regarding the 75% cash down, again, I think you'd be -way- better off investing that money in the markets right now.

Oil - What I know is that companies like Exxon and Suncor are still down like 40+% from pre-covid. Gasoline cars are not going anywhere anytime soon, at least not in the next year. I do believe oil stocks will recover, maybe not to pre-covid highs, but even if they only get to 70% of where they were, you can -still- make a lot of money off them now.
We put about 200k into Suncor, CNQ, Exxon, and Canadian banks a couple months ago, and have made 25-30%, and I still think they will grow. Exxon was 70+ pre-covid, and they are still only back up to about 41 today, -and- they pay roughly 8-9% dividend just for holding the stock. Its a no brainer.

Edit - Again with regards to vaca property....we looked at buying a condo in Mont Tremblant a couple years ago. The hotels there are basically condos, you own them, and they go into a rental pool when you aren't using them. After considering the purchase downpayment (20% in Canada to avoid mortgage insurance), the money we would have to put in monthly to top up the expenses, vs the amount of income we'd get from the management company, we figured we were better off investing the money, and -never- buying the property, but rather just rent it like anyone else when we want.

[mg2ride]

Originally Posted by oldguy00

Oil - What I know is that companies like Exxon and Suncor are still down like 40+% from pre-covid. Gasoline cars are not going anywhere anytime soon, at least not in the next year. I do believe oil stocks will recover, maybe not to pre-covid highs, but even if they only get to 70% of where they were, you can -still- make a lot of money off them now.
We put about 200k into Suncor, CNQ, Exxon, and Canadian banks a couple months ago, and have made 25-30%, and I still think they will grow. Exxon was 70+ pre-covid, and they are still only back up to about 41 today, -and- they pay roughly 8-9% dividend just for holding the stock. Its a no brainer.
.

Agree on your position with Oil Stocks. Own a little and considering much more if it dips at all anytime soon. Hindsight is 20/20 but I shod have loaded up when I got mine.


BIG NEWS for me is that as of today, I will have hit my goal in my retirement account!!!!!!! Only concern is that I'm a year or 2 from retiring and have to consider how much risk I willing to take with it.

[C40_guy]

Originally Posted by oldguy00

we looked at buying a condo in Mont Tremblant a couple years ago.

Hmm...a condo by the track...nice!

[froze]

I don't know where you guys live, but I live in Fort Wayne IN, and I get really good income from my property, I'm getting right around a 20% return, not including tax advantages, if I had a loan, but my loan balance on my biggest building is only at $50k so all the money coming in from rents go into various expenses, and you all know what those are, I have a reserve set aside for repairs so I don't have to cough it up out of my pocket. I do all my own management so there are no fees going into that sort of thing. I've had very little trouble with any of my renters. The places I bought were fixer-uppers, they weren't in horrible shape but not in excellent condition, I've since improved the properties a lot with about another $40,000 in improvements I have to do before I retire, so all the money I get now really goes into the repair savings, once that's done in the next 3 years which is when I'm retiring not only will I have a great income but the properties will be worth about twice what I paid for them.

I have a 403b as well and that's not doing too bad, the last I checked the last quarter I was averaging 13%. The problem with me is that I don't understand enough about stocks to where I can take a bunch of money and become a day trader and make a lot more money, I would probably lose it all! LOL!! so with rentals, I have an almost guaranteed income, even if the stocks crash people will still need places to live.

I personally think that rental property is a safer bet than the stock market is over the long haul even though I have a lot of money in my 403b, even though stocks have always gone up since the great depression, but I think now the US is far overextended, and I think war is going to happen with China which will completely destroy the US economy even IF we win that war, and with our economy destroyed then other western countries will be destroyed along with ours. Believe it or not, China actually wants a war with the US, I've seen reports to that effect, and some of you will say why when they rely on us and a war will hurt them too, in Chinas eyes they feel they can recover from a war in less than 10 years but the US may not ever recover leaving China to be the sole superpower which they believe is their destiny. So I'm not real bullish on America's financial future.

[oldguy00]

Originally Posted by C40_guy

Hmm...a condo by the track...nice!

Track?