Limit of 10 only applies if you do conventional mortgages thru Fannie Mae. You can always find portfolio lenders, aka banks that hold their loans on their books, that don’t have any limits. Or if you are real fancy you can get money from Blackstone. They have a lower limit, not upper limit.
I had the foresight to borrow with only my or my wife’s name for each property. The limit of 10 becomes the limit of 20. I can also borrow and buy in my 401k’s name, which doesn’t have any limit. So I still have a lot of room become I ever hit any limit.
I do have a limit with my bank account. Want to chip in?
How do you borrow with the name of your 401k? Is it a Fannie/Freddie mortgage with 25% down?
Yeah, down payment becomes a major requirement for rentals. Is there any low downpayment mortgages for investment property? Primary home buyers are wasting their opportunity to buy with 5% down.
Experienced both, so far stock (AAPL) win hands down.
Two rentals in Singapore bought with 20% downpayment, price doubled … over 20 years… following the wisdom of buy and don’t sell… it went up, then it went down, it went up, then down again, now is up.
Buy and hold* AAPL since 1997, gain is over 200 times (not %). Went from a small percentage of the worth of the two Singapore houses to dwarfing them.
Getting rich with stocks is tricky. Few people have the skill and luck. I think stock is like a long pass in football. If you throw it perfectly and your receiver is good you can just touch down with one pass. Real estate is like a good running game. It’s much less sexy and you just grind away nice and steady.
Is it how football works? Haven’t watched any game for 10 years.
Few people can buy AAPL in 1997 and hold for 20 years without selling. It’s not something to benchmark against RE. It would be more appropriate to compare against a index such as SPY. Though I’m not sure many people will be disciplined enough to buy and hold SPY for 20 years.
Singapore housing price only doubled in 20 years? That might be worse than Dallas. Still since it was leveraged, I guess a 500% return on cash is still better than SP500.
For my case only. It went down to nearly my purchase price because of SARS crisis followed by US financial crisis. After that, price doubles. So for those who bought in 2009-2011, can boast about double in less than 5 years. To this group, RE is a sure and easy bet… kind of similar feeling when I first bought, price shot up 60% over 2 years… so happy till it went down, down some more, and some more… then up again… over 20 years, only doubled purchase price.
With this kind of modest appreciation and violent volatility over 20 years, I can understand why you want to buy with cash. But if housing price only doubled in 20 years, SP500 would have outperformed by 100% over the cash purchase. But the rental income was not accounted.
This Singlaore story of the last 20 years makes me want to stop any RE purchase immediately.
We’ve had a really unusual appreciation in the last 5 to 6 years, it’s definitely not sustainable. From this point on, appreciation might be really modest or even negative. What’s the point to continue to buy today?
You’re right again. At my age, the goal is stability, so aiming for capital preservation. For younger folks, can take more risks, go for capital growth is ok… still young, can recover and try again, and again.
My current asset allocation is: RE (Singapore, SV, Austin), Index fund, and dividend-paying stocks (mainly AAPLs). No growth stocks. AAPL is a value stock now , not a growth stock, should be obvious to many now.
How about income? Do you still rely on job to provide the bulk of income? Or solely depend on rental income and dividend?
I think income stream is a major consideration when you think of retirement. Dividend income might be too little, rental income is usually more significant. A heavy concentration of AAPL is a risk, but that’s exactly what made you money.
You can enhance the dividend through selling covered calls against your shares.
For example, you can sell Nov calls with a strike price of $130 for $5.35. For 5,000 shares, you get $26,750. If get called away, can use the proceeds to diversify into other dividend-paying stocks or RE. In that case, your return would be about 15%. If want possible higher return and don’t need so much money, can choose higher strike price like $135, premium obtained = $19,500, called away return = 18%.