Would you buy real estate right now?

[Geila]

Tybee - thank you for all the great info. It gave me a lot to think about. If the 1% rule applies, then the house would not make the cut, but then I don't know very many situations where that would work out. 1% of value is quite a lot.

The idea of researching it all does not appeal to me, so I'm taking that as a good indicator that it will be best to wait until we're ready to move. It makes it easier that another nice listing just went on the market at a much better price, so I'm feeling better about letting the other house go. There will always be nice houses. I remember reading that about the stock market too, somebody said, "There will always be opportunities." and it makes me feel better when we miss out on something big. Dh and I are not big risk takers so we miss out on a lot of opportunities. On the other hand, we lead a relatively peaceful life.

But I've bookmarked the two books you mentioned just in case. It might make for some good reading as general education.

iris lilies - you're right, it's not really an investment so much as a wish to have a house I can move to when I'm ready. We have 3 pets and it's hard to find rentals that would allow that many pets, so my thinking was that having a house of our own would make that a non-issue. And if we could make some money at the same time, well, that would be just dandy. But we don't have the personality for landlording, and with it being a seller's market in that area at the moment, it goes against the advice of buying when everyone is selling. If the market continues to rise and housing is much more expensive when we buy, well, that's just life. How long did you think about buying before you bought your Hermann house?

[razz]

Gella, you are wise to know yourself so well.

[iris lilies]

I looked at real estate online for quite a few years before I settled on Hermann. We bought a few months after seriously looking and it was the same house we looked at months before. We were looking for a weekend house however and we didn’t decide to move there until sometime after we bought it.

we are still two years-ish away from moving.We just had our first proper meeting with our architect 10 days ago.

[Geila]

How exciting! What made you decide to move?

[iris lilies]

How exciting! What made you decide to move?

we have 1 acre at our Hermann house. We are big gardeners. In the city we have tiny plots of land and have strung together several over past decades to bet enough harden space.

pluse, all of our closest friends have moved. We still have many friends here but the A-Team is gone.

[jp1]

you have to run the numbers, make the business case, to see if it is a money making proposition.

Since you tied, in your initial post, your stock market investments to this rental idea, I assume you are viewing it as a moneymaking effort.

Since Geila also talks about wanting to make this their permanent house my thought was (and I'm possibly projecting here since I assume we're talking retirement) "if Mr. Geila was retiring today would they buy this house?" If yes, then the question of renting it out just becomes "will they potentially suffer all sorts of crud from having renters in the house between now and the time they want to move into it themselves and can they handle minor financial woes associated with owning rental property?" Current value vs. four years from now value seems less important if the goal is "Geila and Mr. Geila want to live in this house but just can't move today."

All that said, I personally have very little desire to be a landlord. We haven't settled on where we want to move for retirement but even if we had it would take a REALLY awesome piece of real estate to convince me to buy a home in that city today and rent it out until we were ready to retire and move there. For me I'd rather keep my assets growing in simple assets like stocks and take the risk that it would cost more when we were actually ready to retire and move.

[flowerseverywhere]

A lot depends on luck. A good house in a good location can be a very good bet. However , never forget there are many things out of your control. People have mentioned troublesome renters.

We had had a lovely house in a nice town. We sold it having no idea in three months after we moved a major brewery in our town would close. The young couple that bought the house were townies with no intention of moving, but they could have been in a pickle if they had to move as they were probably upside down for a period of years.

You noted the advantages of family to help manage the property and know the rental possibilities. That is a big plus instead of just being an absentee landlord. Would it be an economic hardship if for some reason it was vacant half the time? It can happen.

In your heart you probably know what what you want to do. We have never owned more than one home at a time as we were risk adverse after the unpredicted brewery closing incident. But on the other hand we had tremendous appreciation in another house by sheer luck. A few years after we bought the house we live in, shopping area with a beautiful grocery store, a few nice restaurants, movie theater complex and huge gym was built about a mile away with very easy access by foot or bike for us and some neighboring houses have been sold for a nice profit. The area previously had some struggling businesses that were converted in the process to profitable ones. We don’t intend to go anywhere, but sometimes you are in the right place at the right time.

[catherine]

Tybee, that is a crazy experience with your tenant who broke in and stole and even held a hostage in your house!! That's another great point for Geila--you may think you have a great tenant until.....

In our case we wound up with a squatter we didn't even know we had--the people on the lease had sublet one of the rooms in MIL's house to her, and she simply didn't get out when everyone else did. In fact she refused to leave, and it cost us thousands in legal fees/lost selling time to evict her, and all the while we were not allowed to go anywhere near the house, even when drug dealers were making drops to her on a daily basis.

[Tybee]

Tybee, that is a crazy experience with your tenant who broke in and stole and even held a hostage in your house!! That's another great point for Geila--you may think you have a great tenant until.....

In our case we wound up with a squatter we didn't even know we had--the people on the lease had sublet one of the rooms in MIL's house to her, and she simply didn't get out when everyone else did. In fact she refused to leave, and it cost us thousands in legal fees/lost selling time to evict her, and all the while we were not allowed to go anywhere near the house, even when drug dealers were making drops to her on a daily basis.

Catherine, I had forgotten that horrible, horrible saga-- it is unbelievable what it took to get that woman out, really an eye opener. And so unfair that you had to pay all that money and not be able to go near your own house. Kind of reminds me of that movie Pacific Heights-- maybe every potential landlord should have to see that.

But I know many people have normal, positive experiences with renting, so don't mean to be negative here.

[razz]

Renters in Canada are growing marijuana/cannabis. Privacy laws prevent landlords from knowing about this until the renter leaves or some other event triggers the awareness. The houses are later so damaged from high moisture and overloaded electrical wiring that major reconstruction is required to bring back up to code. Those houses are then noted as having grown cannabis on the real estate listing.
Cannabis may be legal in Canada but the inability to know or lack of monitoring by legal authorities for known grow-ops are reducing the rental openings as landlords fear renting and are selling their properties.
Real estate ownership has so many variables and consequences out of one's control.