Interest Rates & RE Inves (by GKARL [PA]) Jan 20, 2019 10:29 AM|
Interest Rates & RE Inves (by Tim [IN]) Jan 20, 2019 10:37 AM
Interest Rates & RE Inves (by Deanna [TX]) Jan 20, 2019 10:39 AM
Interest Rates & RE Inves (by LindaJ [NY]) Jan 20, 2019 11:01 AM
Interest Rates & RE Inves (by Ken [NY]) Jan 20, 2019 11:19 AM
Interest Rates & RE Inves (by Smokowna [MD]) Jan 21, 2019 4:44 AM
Interest Rates & RE Inves (by myob [GA]) Jan 21, 2019 5:18 AM
Interest Rates & RE Inves (by Oregon Woodsmoke [ID]) Jan 21, 2019 6:37 AM
Interest Rates & RE Inves (by Ray-N-Pa [PA]) Jan 22, 2019 6:24 PM
Interest Rates & RE Inves (by BRAD 20,000 [IN]) Jan 23, 2019 11:38 PM
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Interest Rates & RE Inves (by GKARL [PA]) Posted on: Jan 20, 2019 10:29 AM
I was just thinking today about the RE market and interest rates. I'm old enough to remember the early 80's when interest rates were sky high. I remember the first mortgage I got back in 1984 being at 11.75% on a duplex I purchased for $ 95,000. In the late 70's and 80's interest rates on savings accounts ranged from 10% to 18%. If you could get a risk free yield like that today, who would need the real estate or stock markets?
Seems to me that Fed policy in the early 80's was to draw money into the banks to fight price inflation and is now driving money into real and financial assets to inflate them.
But let me get back to my question: if you could get 13% risk free on a CD, would you still be a RE investor? Why?
Interest Rates & RE Inves (by Tim [IN]) Posted on: Jan 20, 2019 10:37 AM
Yes, still be in it. Some of the best real estate investments happened in that time frame. Huge capital gains years later.
Also, being a landlord is a lifestyle. The freedom to do what you want that day is pretty nice. --166.137.xx.xx
Interest Rates & RE Inves (by Deanna [TX]) Posted on: Jan 20, 2019 10:39 AM
Yes-- because I would still remember the days when I could get 5% on a CD, and remember when I could get 0.25% on a CD, and everything in between. So even if I had 13% risk-free in a CD at one moment in time, that would be my short-term game (immediate return)... and I would keep RE as my long-term game (retirement, kids' college funds, etc). --96.46.xxx.xx
Interest Rates & RE Inves (by LindaJ [NY]) Posted on: Jan 20, 2019 11:01 AM
Yes, my "rentals" are what pays for the land they sit on. I feel they are in locations that will increase in value because of those locations. In the mean time, the tenants pay the mortgage (if there is one) and the taxes and other costs, plus some income for me.
A few years ago, I sold some acreage for a development. The old house was still standing, the current long term tenants were happy, but it was time. The costs of repairing the house were not making it worth while any more. The tore down the house and now there is a new road with new houses. --108.4.xxx.xx
Interest Rates & RE Inves (by Ken [NY]) Posted on: Jan 20, 2019 11:19 AM
I just sat down to evaluate keeping a 2 family or selling it and putting the money into something else,at 13% I wouldn't even need to look at last years expenses.To answer your question though yes I still would do houses because in the case of the house I am thinking of selling part of the deal with buying it originally was I took over a previous owners judgment that was against the property which will be dropping off in march of this year so it was good deal to keep till now but once the judgment drops off I am able to sell it.I do a lot of deals like that and really enjoy putting them together.Plain vanilla deals are boring to me but I love auctions,rehabs,taking judgments in order to get a deal cheap etc. --72.231.xxx.xxx
Interest Rates & RE Inves (by Smokowna [MD]) Posted on: Jan 21, 2019 4:44 AM
If I were the only one getting the 13% then yes to some of the shacks I own.
Currently high costs of utilities are changing the equation. Something I planned to get ahead of years ago but have not.
If I had a way to avoid the cap gains I would sell and wait to buy again.
Interest Rates & RE Inves (by myob [GA]) Posted on: Jan 21, 2019 5:18 AM
Of my original 80 SFH's 70 were purchased with 0 down or 5%.
The realtor kept 1K of the 6% commission and "donated" the rest back to us to cover our cost. This effectively made our purchases nothing down so our return on investment was infinite- since we had no out of pocket cost. We are now down to 63 property's with only 5 left with mortgages.
During our investment/purchasing days we refi'd to lower rates and increase cash follow- we also refi'd some to pay off others. We let our RE equity work for us-- was it hard to keep up -- YES very but there's nothing worse, in my opinion, then money sitting as equity in any property.
Try doing that with a CD. --99.103.xxx.xxx
Interest Rates & RE Inves (by Oregon Woodsmoke [ID]) Posted on: Jan 21, 2019 6:37 AM
When mortgages were 14%, inflation rates were about 14%
If you could get 13% on a CD, you would likely be losing value over time due to inflation. At the same time, real estate keeps up very nicely with inflation, so real estate is the go-to investment when rates are high.
But, yes. I have some money in a money market and would love to be getting 13% on it instead of 1% But I don't buy CD's. I don't want my cash tied up for such long terms and the short term CD's pay very close to what a money market is paying and I can access my money at any time with the money market, without penalty. --98.146.xxx.xxx
Interest Rates & RE Inves (by Ray-N-Pa [PA]) Posted on: Jan 22, 2019 6:24 PM
Smoke is absolutely right. Knowing a yield doesn't mean much without the corresponding inflation rate --72.23.xxx.xx
Interest Rates & RE Inves (by BRAD 20,000 [IN]) Posted on: Jan 23, 2019 11:38 PM
13? No. I get much more than that on cash flow AND every month the balance on the remaining loans goes down so that prop will eventually be paid and my income leaps.
Like myob, a large number of ours were bought no money down. I stopped counting at 67. My investment is ZERO and my return is INFINITE.
The ones that DID take a downpayment - when I was new and uneducated - are paid and producing nicely.
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