Hello,
I have a rental property in CA (bought around 2010) that has more than doubled in value. I understand it’s hard to call the market top, but I’m thinking of selling it off and wait for price drops of around 30% or so to buy two homes/apartments (one of them will be my new primary residence and the other will be a rental). In the mean time, I plan to invest the the gains in crowdstreet or fundrise.
Any other ideas on how to use up the equity ?
Appreciate your thoughts on this. Thanks !
As you already state, how much you are confidence that you are calling it top? Given that it seems like you are selling your primary home and renting to wait for the drop. I personally seen multiple people who were not able to get back in to the market because of this strategy. Even if the market is flat, you are paying the realtor fees and your tax basis are now higher.
Second consideration is that what you are doing to do with the equity. You are saying you want to get out of the housing market for future drop, but yet your plan is to invest in crowd street and FundRise which are real estate funds. In fact, I would rather be holding my primary home in Bay Area instead of investing in crowd funding real estate where they might actually lose more than 30% (they typically stretch out for maximum profit).
My personal vote is if it is your primary residence, don’t do it. If it’s rental, then maybe.
I can’t think of any CA market that will drop 30%. Even in some boom and bust areas like the inland empire it will take another financial meltdown to go down 30% from current level.
Thanks for the feedback, Boolean.
by the way, the question was for my rental property.
Can you still claim primary home exemption on that rental? If you have to pay capital gains on all of the gain, that’s another loss IMO. But question really is what are you going to do with the equity. As I mentioned I wouldn’t put into crowd funding if you are waiting for drop. I do invest in fundrise but for long term.
.
Don’t work. While I am in Singapore, many of my friends tried, bad outcome.
Being a suspicious person, my initial thought is he is peddling for either crowd street or fundrise.
Interesting.
Then good question. Being asking this type of question but didn’t do anything.
You need to not trade one asset class for another. Doing so just continues the risk that you are betting wrongly.
You need to do both commercial RE opptys on CrowdStreet/Fundrise AND do your personal residential rentals at the same time.
Refi / cash out and use the cash to diversify.
Here are some ideas and key players in crowd type investments
.
Drive up prices or stabilize the market?
I think that investors take away inventory and drive up the market prices. A lot of people on this forum have threatened to leave real estate and invest solely in stocks. Few have. RE keeps going up. The cost of development and building is going up faster than inflation and there is a huge pool of buyers to live in sfhs.
Personally I would stick with REITS if you can’t buy your own deals or are not a certified investor that can buy into partnerships. But there is a demand for small investors to get into the SfH game.
How many have actually sold out? Zero
how will that happen if builders insist on building in someone else’s backyard and what people are looking for a home with nice yard at front and back? Probably time for cities to spread out, rather than gentrifying and densifying the existing neighbourhood.
They have been spreading out since WW2.
Don’t blame the builders. Blame politicians. But every else cities get denser with time. Artificial restrictions create the mess we now have. No reason to have only two story buildings in SF
Would it be wise to sell the rental properties and hold the cash? stocks are down and guessing housing market will be next.Any thoughts?
Yes hold cash or buy new treasures
Stocks are still near all time high and can be down to half and will still be overvalued.
Holding cash when inflation is over 8%???
Least bad option. Stocks and bonds are both falling faster and RE is crashing too
At some point growth stocks were peak not sold.If RE crashes whatever appreciation so far will be lost.
Yawn. What is the case for RE crashing? I hope it’s a more compelling argument than higher interest rates, since that’s never caused a RE crash or even a decline.