Stocks vs real estate


#362

So many words and you still can’t address a simple question.


#363

There are a lot of extra costs with rentals far away. Property management fee. Markup on repairs, travel… Risks of property management stealing your money, it happened to me. The savings in doing your own repairs is probably 3-4%… So you are out 10% at least per year for an out of the area property… That means little or no return for many investments… Owning property is a business… Try to maximize your return, do as much as you can by yourself


#364

Absolutely! We are not in 2011 anymore so you really need to pinch pennies to get any kind of real return on anything… except if you want to gamble with bitcoin then you can just go all out… :rofl:


#365

Landlords that survive long term know that cost control is key… Flitting around the country chasing yield ignores this important fact… High gross yield areas often have high recurring costs and low appreciation… Like Texas…


#366

I learned my lesson with Modesto. Actually my brother bought it there not me so I learned it from him. Yes, it’s not worthwhile to invest there even if you are a “short” distance away in the Bay Area, because you will need a property manager to handle everything for you even for something so close by… Stay local!!! :laughing:


#367

Dec is here soon :slightly_smiling_face:

2017, stocks win hands down :smile:

Your recent posts reflect a change in sentiment.


#368

The end of 2017 is not there yet.

Remember the last recession, things were “hidden” by the government but still being discussed behind doors, until the gates were open and the flood of information was unstoppable.

But, most everything seems to be normal. We are seeing people cashing out their stocks, turned into something I can’t say and from there the capital gains are gone.

Hint: By committing fraud. :sweat_smile::sweat_smile::sweat_smile::sweat_smile::sweat_smile::sweat_smile:


#369

Buy bitcoin?


#370

I’ve been approached by look alike Bitcoins. And their numbers are kind of enticing, but I don’t risk my money no matter what.

To answer your question: Nope. Capital gains don’t disappear, like 1031, but can be hidden without you looking for another asset to suck them in.

But, please, don’t be complicit in my fraudulent activities. :sweat_smile::sweat_smile::sweat_smile::sweat_smile:


#371

Bit coins are for criminals


#372

It was previously, but when BTC vs USD jumps, plenty of Hedge Funds and Private investors keep on buying and selling madly ! Now, this has become like 1730’s TULIP Craziness !


#373

I am just thinking about it. Haven’t changed direction yet. My plan is to periodically take some equity out of my stock account to buy real estate. The current bull market will end some day. I want to take some chips off the table. A little bit every year.


#374

That would be the wrong thing to do. Never sell any stock to purchase real estate. Marginize your holdings to do so. The only time to be selling anything is when you get margin called and can’t cover… :wink:


#375

Since stock appreciates much faster than RE, manch re-balances annually to his preferred % allocation.
Wait a minute… sell fast appreciating and buy slow appreciating… I’m confused.


#376

You can’t win the game just playing offense. You need defense too. It’s healthy to lock in some gains. Can’t be too greedy or else we will all go 100% into bitcoins.


#377

Buffet rarely locks in gains, because that means paying taxes. I think his main strategy is to let it grow then when there’s a major recession use margin to buy more. If you use margin in a recession, then you’re unlikely to ever get a margin call (especially if you keep margin reasonable). This is probably why he prefers companies with dividend and cash flow. They hold more value in a recession, so he has more buying power. Then sit back and ride the wave of the next economic expansion.

I’m sure most people are too scared to buy on margin in a recession. It’s actually the least risky time to do it.


#378

Money management has to fit the overall strategy. You can’t just pick one piece of what Buffett does and ignore the rest.


#379

This is what I heard.

Buffet prefers Dividend Payers and private take overs which provides him good yield. At normal time, he invest 70% of his capital and keep 30% as reserve ( that includes yield returns). He uses the reserve cash 30% when he finds right opportunity (as he sells his profitable holding at that time).

Most people are too scared to buy on margin in a recession => True, double risk as no one can clearly predict the bottom or top.

You need defense too. It’s healthy to lock in some gains. Can’t be too greedy

Personally, I prefer taking some cash out in between to keep that as reserve cash almost 10%-15%. However, tax is a real concern, esp Short Term capital gain is too high.


#380

You pinch any penny you got, with the caveat in your mind that it may be the last one to invest. A crash in the market and you are a goner.

Buffet has learned the secret of using OPM.


#381

What crash has the market not recovered from? Also, there are ways to make money when the market goes down in value.