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    Anyone into real estate here?

    Anyone into real estate here? Not necessarily looking for professionals only, but i'd love to hear from all people that are interested, invest, rent, or own. What areas are you interested in, how you think the market is, or details about being a property owner. As something i'm really considering in the future, i'm especially interested on people that have rented out their place and the pros/cons/pitfalls of that.

    I'll start with my real estate history. I bought a house after the crash three years ago in Dunwoody, GA (basically Atlanta) in the 300K range. I didn't follow the rule of your monthly payment being less than 1/3 of your take home pay, and it caused some initial struggles, but I am used to it now and have a friend renting out a room. The local housing market appears to be picking up now and a local real estate agent friend confirmed that the supply of houses is starting to diminish and it is a sellers market. Although it was more work and more money than I thought owning a house, I ultimately was happy with my choice and enjoy the increased space and the freedom to do whatever I want on my property. From a purely financial standpoint, I sometimes think I would have been better off renting, saving the money, and investing it.

    #2
    I follow the market when I have time, and have a few acquaintances who are carving out their portions of the local demand for realtors, but as a grad student I have approximately five dollars to invest in owning property (during a good month). All I can do is pine for the price of housing in 2008, and watch as it steadily climbs back up.

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      #3
      I see property as a value holder and not necessarily an investment. Case in point there are taxes, maintenance, utilities, furnishings, and updates that come along when a house looks dated 20-30 years down the line. Anyone a huge fan of 80s style design? Also I will only buy some much house since they just hold value and do not necessarily appreciate over the long term. I am not saying they don't but they are not returning an average of 7% over the long haul which I assume they stock market should. I have convinced my fiancee of this and even though we could afford a ton of house we are restricting ourselves and investing the excess.

      I do invest in REITs, as they collect rents, even though as interest rates go up they look less enticing but over a long term they tend to trend with the stock market for rate of return. With REITs I am taking less of a return for ease of owning. I am not handy so that makes it more expensive to own myself.

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        #4
        Owning a house (or a condo) is a major pain in the ass. I've rented since I was 18 years old, and while there are disadvantages, it is a tremendous money-saver.

        Before I moved to the UK, I rented a house in the US. I didn't have to worry about maintenance when things in the house broke, property taxes, spraying for bugs or other unwanted pests, and etc. I also have inexpensive renters insurance due to military discounts.

        On the flip side, owning a condo is just about the worst investment I've seen a family member purchase. Condos charge a condo association fee to cover building maintenance, staff, etc. The fee is often just as much as it would cost you to rent the condo as an apartment. You're effectively paying more money for the same service, and you're on the line if the fridge breaks.

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          #5
          Most of what I know about real estate is through my parents (who are, themselves, not especially big real estate players). Interest rates are so low that my mom decided to put some of her money into a house as an investment a few years ago. At that point, the market was still basically bottomed out. My brother and I plus a friend of ours are currently renting it from her. Even after maintenance expenses, and despite the rather modest amount of rent we pay, she is still making considerably more profit off us than she would be if that money were sitting in a bank. Plus the local market has been steadily recovering since then, so she could easily sell the house now for at least 15% more than what she's put into it (including purchase price and renovations).

          The house is also smaller and closer to town than the house my mom and dad currently live in. If my dad kicks the bucket first, I think her plan is to kick us out (or whoever is renting at the time) and move into the house for herself.

          I may soon become more familiar with real estate myself, as I am attempting to secure full-time, long-term employment in my hometown area. If I manage to land a job like that, my dad - who is, among other things, a retired contractor/carpenter - has effectively offered to build a house for me. That would be a pretty exciting opportunity, since I have a good idea what I want from a house, but there is really nothing like it on the market. (Large yard or small acreage with tons of trees, ideally fairly close to the mountains... a house that is small but with an efficient, modern, open-concept interior and tons of windows, smallish bedrooms and larger kitchen/living space. That'll be the day....) Finding a reasonably priced lot that meets my wants will be challenging, but not nearly as challenging (or expensive) as finding the kind of house I'd like.

          I've never really seriously considered home ownership as an option before, as the market is volatile enough and the work significant enough that renting makes a lot more sense unless you know you will be in one place forever and have the opportunity to really get what you want out of a house.

          [Edit] Having a hyper-perfectionist carpenter and all-around handyman for a father has also made me wary of investing in a house that was built by persons unknown. I've seen my dad do more than his fair share of cleaning up after builders who were lazy or incompetent or simply more interested in turning a quick profit than in building something to last. If the option is available to me, I would rather have a house built by people I trust than buy something that may reveal serious, costly flaws years down the road.
          Last edited by LesserBlackDog; September 4, 2013, 04:56 PM.
          Ben

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            #6
            Yes, condos are an interesting case... alot of their future value depends on if they have a good HOA association or not. There are ways to evaluate this such as looking at their balance statements and seeing how they manage their money, but i've never done it myself. Then again if you can get a 2-BR condo for $100K and rent out a room for $500/month, you're pretty much living rent free and building up equity in a place you own. Like you said that HOA fee can get crazy though, when you factor in an extra $250-$500 a month in HOA fees, it's like adding $50K to the price of the place.

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