How to Use Real Estate to Create Dividend-Like Income


#1

I came across this blog as someone has written a nice post about it.


#2

A very good summary of the real estate strategy. However, quite surprise the article didn’t mention the always-in-debt approach used by many bloggers here such as wuqijun who buy more rentals from the rents rather than accelerate the paying down mortgages. I am employing the All Cash plan :grin: Good to know that the author favors the eventual debt-free approach.


#3

My goal is not asset preservation, but appreciation. The way to do so is to finance expansion with debt.


#4

Hanera and I are old…Wuqijun is younger…Debt makes sense when young…The older you get the less debt is a safer strategy


#5

Without leverage, real estate gets less interesting. You can buy a stock index or REIT to get similar returns with no liability and no hard work.

Maybe a good strategy to buy RE with a mortgage when you are younger and become debt free in 30 years. After that, you can’t sell due to capital gains tax. So you hold the property clear and free solely for the purpose of avoiding capital gains tax.

Now I understand when people say stock is better than RE. If buying with 100% cash, I may choose stock instead


#6

That is true. Might be a good idea to start deleverage at 65. Deleveraging doesn’t mean selling your assets for cash, but just to get rid of the debt.


#7

Hey thanks for your article, I had an experience in creating a constant flow of income from real estate that I’d like to share with you. I purchased 2 flats in Juffair district in the kingdom of Bahrain. Bahrain real estate for those who don’t know is a growing market in the GCC region and I think it’s going to outrank Dubai in just a couple of years. Anyway, both apartments got me around $30,000 a year. For five years I guaranteed this amount of cash flowing from Bahrain. Anyway, after 6 years, I exited the market and got a markup of around 65 percent on my initial price. So, it’s true, you could ensure a fixed income but u need capital first.


#8

I’m almost fully deleveraged.


#9

You don’t have anymore debts? Congrats! :smile:


#10

Same here…But thinking about leveraging uo and buying bitcoin…lol


#11

My combined LTV is 32.5%


#12

I’m thinking to get a Heloc and buy a bunch of bitcoins and ether. Hope Bitcoin and ether will help reduce my debt in return :joy:

A risky strategy that could be rewarding :rofl:


#13

Really??? Mine is only 30%… so I’m actually more risk adverse than you are! Who would’ve known… :laughing:


#14

Told you you are losing your mojo. Getting old. Need to eat more eggs and steaks. And start buying bitcoin! :smile:


#15

You are right!!! I’m going to double down on my breakfast today with 6 eggs!!! Keep those cholesterol rolling… :rofl: :rofl: :rofl:


#16

Omg, my LTV is too high, need to have Bitcoin help to lower it :moneybag:


#17

Play it safe… go find a sugar mama instead to help pay off your debt burden… :rofl:


#18

With a LTV of 0-30%, what’s the point of RE investing? You can buy an index fund and save all the hassles and liability. With low leverage, much of the rent will be taxable income. I think the correct strategy is to pay off your primary home and leverage up the rentals to lower taxable income


#19

??? Your statement makes no sense at all… :rofl:


#20

Old school.