RiegerAudiA4 selling his car?
06-18-2006, 10:34 PM
#21
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Heck you can always get something else later...
Sounds like you are making a wise choice. I wouldn't park it there either...it's better sold or left at your parents house while you are at school. As far as using part of the money for a down payment on a house...please tell me where houses are so cheap and property tax is low enough that a young kid can take half the worth of that car and put it as a down on a home?! You would need your parents to co-sign on that one because you still need a sizable income to secure the loan for a home. At least here in So. Cal. where the houses are 800K plus where I am....your whole car would equal one month payment on the morgage! LOL I like your ideas though and your headed towards great success with that thinking of yours. I only wish I was thinking like that when I was your age! Damn it! I wish you the best and hope you jump back on this forum at least once and a while to let us know how you are doing. Peace.
J
J
06-19-2006, 02:48 AM
#22
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though that is good philosophy on the 2 family homes... it might come back to bite ya...
unless you find an investor to buy the house from you after its value has risen past the point the rent no longer covers the mortgage, you're gonna have a hard time selling it to another investor trying to make a lil $$, at least that's my take on it.
I've been doing the same type of looking around where I live, and come to the conclusion that single family homes are where I need to be, at least in my area. If you invest in a college town, you might be able to get away with a duplex cuz you can always charge more rent.
Great plan though, Jess... you def got your thoughts in the right direction. I seriously wish I picked up a house where I'm living now back when I was co-op'ing... I would have made a killing cuz of how the housing market exploded around here (va beach).
I've been doing the same type of looking around where I live, and come to the conclusion that single family homes are where I need to be, at least in my area. If you invest in a college town, you might be able to get away with a duplex cuz you can always charge more rent.
Great plan though, Jess... you def got your thoughts in the right direction. I seriously wish I picked up a house where I'm living now back when I was co-op'ing... I would have made a killing cuz of how the housing market exploded around here (va beach).
06-19-2006, 05:20 AM
#23
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explain "unless you find an investor to buy the house from you after its value has risen past the
point the rent no longer covers the mortgage" because i do not understand
06-19-2006, 07:14 AM
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I'll try...
This is my opinion/view of it, so take it with a grain of salt...
most people who buy a duplex are investors (I'm making a generalization here). You don't find too many people that buy a legit duplex to live in it.
So, say I go and buy a duplex for $180k. Say that each unit rents out for $800 a piece, and the mortgage payment (hypothetically speaking) is $1400/month, including ins on the property, taxes, etc. That means that I will make a $200/month profit on the house that will go towards maintenance, upkeep, etc.
Now, say 5+ yrs down the road I decide to sell the duplex and cash out my equity, and assume that another investor will look to buy. If the house were to sell for say $230k, your mortgage will increase to say $1900/month all said and done, but the rent in the area hasn't increased enough to compensate the increase in mortgage.
So now I'm renting a unit and only getting say $1700/month in rental income and am putting out $1900/month in mortgage payments alone, not including maintenance, upkeep, etc etc etc. So basically you're now owning at a loss, and it's not always easy to unload it. Now there are tons of options with these things and loop holes, etc... like being able to write off your losses for taxes, etc etc... but it's thing to take into account.
Now there are areas where this is completely untrue and you can easily sell/rent and never get a loss... like college areas where you can rake in a lot of rent cuz regardless of what you charge (w/in reason), it is generally a lot less than room and board oncampus... but in areas of lower income where you'd try to do this, you'll run into what i described above. My brother and I were looking to do the duplex thing, but after looking at a few and looking at price vs rental income (which isn't that high in my area)... it was not a wise move.
hope that made sense...
most people who buy a duplex are investors (I'm making a generalization here). You don't find too many people that buy a legit duplex to live in it.
So, say I go and buy a duplex for $180k. Say that each unit rents out for $800 a piece, and the mortgage payment (hypothetically speaking) is $1400/month, including ins on the property, taxes, etc. That means that I will make a $200/month profit on the house that will go towards maintenance, upkeep, etc.
Now, say 5+ yrs down the road I decide to sell the duplex and cash out my equity, and assume that another investor will look to buy. If the house were to sell for say $230k, your mortgage will increase to say $1900/month all said and done, but the rent in the area hasn't increased enough to compensate the increase in mortgage.
So now I'm renting a unit and only getting say $1700/month in rental income and am putting out $1900/month in mortgage payments alone, not including maintenance, upkeep, etc etc etc. So basically you're now owning at a loss, and it's not always easy to unload it. Now there are tons of options with these things and loop holes, etc... like being able to write off your losses for taxes, etc etc... but it's thing to take into account.
Now there are areas where this is completely untrue and you can easily sell/rent and never get a loss... like college areas where you can rake in a lot of rent cuz regardless of what you charge (w/in reason), it is generally a lot less than room and board oncampus... but in areas of lower income where you'd try to do this, you'll run into what i described above. My brother and I were looking to do the duplex thing, but after looking at a few and looking at price vs rental income (which isn't that high in my area)... it was not a wise move.
hope that made sense...
06-19-2006, 07:27 AM
#26
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I see what you are saying but,...
in the scenario that you outlined, the reason that the duplex price went from 180k to 230k is because that is what the market is dictating. You didn't personally create a price of 230k out of nowhere. You don't care or need to worry about the fact that you personally don't think you can make the numbers work at 230k with the rent of 1700. The reason the market it calling for 230k is because other properties like it in the area are selling for that much. Next, you forgot about the tax deductions you get by owning a property, the interest deductions, the depreciation. Your money is better invested in a piece of real estate than in some random stocks you don't know much about. Go to the bank and tell them "I would like a 180k to invest in the stock market.." they will tell you to kindly leave. tell them "I want 180k to buy a duplex" and their ears will perk up If you plan on keeping the property for 5+ years, don't worry yourself about who is going to buy it then (as there will always be a buyer). If I wasn't clear on something just ask me.
06-19-2006, 07:57 AM
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It's called PARENTS.
Yeah college kids with insane cars hmmmmmm? I dunno but when those of us who make good bank on our own in our late 20's can't mod like that it makes you go hmmmmmmmmmmmm....