Yes I know,
But what I was getting at is that there are a lot of opertunities to make money on a house, they are not all desten to ruin your pocket.
I don’t see anything wrong with making some money on a house and yes you can make money on a house.
I have seen it with quite a few different people.
oh for sure, you can make money on a house, but not by living in it…lol
the problem in my buddies scenario was that his wife isnt comfortable sharing their home with ‘strangers’
that is a legitmate concern, but that places the entire financial burden on oneself.
that is the pit.
if she gets her way, my buddy will HAVE to spend the next 25 years of his life working for XXX$ per hour to pay for this home.
when if they did it as i suggested they could basically work half the year, vacation the other half and have foreign exchange students pay the mortgage…lol
there are tons of ways to earn a positive cash flow form a home, but again, you cant just buy a home, live in it and expect to make buck one.
Okay we are talking about buying a house not a home. A house can be rented for profit or can be lived in.
A house IS an investment property, a home is NOT because an appartment can be considered a home.
Because your buddy got a place for cheap that he is renting is not a good example for comparisson. To compare a house to an appartment is just stupid, obviously it will cost more to maintain a house. If you compare renting the same amount of space to purchasing that same amount of space, in the end you either end up owning and getting a return on your investment, or you end up paying rent and end up with nothing to show in the end.
So yes, a house will cost more, but you will also get a return on the house when you decide to sell it. On the appartment/ rental property, there will be no such return.
As far as investments being all about the money… you do the math, the ROI is greater on a house for obvious reasons. And like I said before, the size of the downpayment is a very relevant factor in this.
Note: This is great Bing, keep it coming. It is good to see other views on this topic.
AAAAAAAAAa
I really don’t want to get into a argument becasue I agree with a lot of what you are saying.
hahaha get exchange students to pay for the house :thumright:
But as i have been saying about my mom, she bought a house , lived in it and now she can make with moving deductions and when all is said and done $70000 profit.
also someone I worked with bought a townhouse in a area they know was going to grow fast and with in a year and a half the average price shot up $120000.
you just have to be smart about where you buy.
now you beat me 
^^^ Yep, I know a few people who purchased a house, lived in it for a year or two and moved. They just keep reinvesting the money into larger houses.
true there is no ROI… but that is because you arent making an investment to make a return on.
what you are doing is creating a positive cash flow by renting versus buying.
as previosuly stated, the difference is about $1000 per month that you SAVE by not buying a home.
this $$$$ comes from not having to pay various utilities, property taxes, interest on a martgage, and overall lower living expenses.
you are going to spend X dollars in order ot live no matter what. the trick is to sacrifice prestige (living in a condo versus buying a nice home) in the short term and generating that $1000 per month that you can use to do other things.
for example,
live next to my buddy in a starter apartment for $550 a month.
then with the $1000+ u save every month in living expenses you would have incurred had you bought a home, you can in fact buy a house…lol
then rent out the home to students / families, rent the garage for car storage in the winter.
generate $200-$400 postive cash flow off that home every month, have your documents in order and bringthem to the bank… buy home #2
continue in this manner.
better than residential is commerical properties, they will generate higher monthly cash flows as a percentage of investment.
of course you will have to use debt to finance these decisions, but if you are generating positive cash flow, then who cares.
doing this for say 4-6 years and accumulating 3-4 properties in that time will mean that you can relax your 40 hour work week at the age of 28.
if you are able to turn higher cash flows and live modestly in this time you could in fact retire at 30 and live off your positive cash flows and continue to generate cash flows on additional properties.
after 25 years you will have paid off some of you homes etc. and you can sell them and use the cash to finance 3-4 more…lol
i’m glad we have differentiated away from comparing a home to a car purchase.
It is like nothing I say means anything.
also House that are around my dads place rent for about $2500 a month.
But his morgage cost him about 800 less then that a month.
so when you do all of that, in the end he is going to come out ontop becasue when you considder all cost the monthly fees are close to the same and he will get a bigger return becasue he will then own a house. and this house has gained $145000 over the last 10 years.
But that is still a great inprovement when you include the cost of the house.
Now we have opened another can of worms though entirely.
Assuming lowest costs renting would not be the best option when compared to the costs of living at home. By living at home you would again have more liquid assets. This extra money would have to be invested into something profitable in order to make more money.
Assuming that we decided to invest this additional cost savings we have from living at home into a house which we plan to rent out to in turn purchase more homes.
This if done legally would result in higher taxable income as well as added expenses in order to get the rental property up to code to be able to rent it out. This would also require the property to be zoned as a rental property otherwise guess what happens if the neighbors complain.
Along with renting you then have to follow rental laws which are not always in the owner’s favor but usually protect the renter.
You also become liable to fix all damages to the property (maintainance), which may not necissarily be there if you were not renting. i.e more wear and tear due to certain tenants.
Also I have a friend who owned a rental property, he didn’t choose his tenants wisely and ended up having to pay for over $20,000 in damages caused by a house party after which the tenants left the country.
All these added costs would have to be deducted from the profitability of purchasing a house for rental uses.
For the most part I agree that renting is the way to go. It is what I plan on doing with my first house. I am just stating some of the costs that you may not consider when deciding to rent out your house.
ok i know that you can turn profits liek that on SOME homes, in fact a good friend of mine is workign in cali, and his uncle see’s this $hit happen all day long in their neighbourhood, like 40% returns on a 2 year $400,000 investment… it’s sick…
what i am getting into specifically here is what you or i coming out of university can reasonably get into considering our age and finanicial status.
i will not be going out and buying a $400,000 property in the next 3 years, but i could go out and buy a $200,000 one.
and if i can generate cash flow off it then i could buy a $400,000 one.
Haha Benson, it’s like your not even here!
I am just going to shut up now/
Benson made great points, so did Bing.
I think the point of this thread is lost though, and not really a valid comparison.
The main thing is if you spend $10,000 doing up your car, it will drive the sale price up $5000 maybe.
If you spend $10,000 doing up your kitchen, it will drive the sale price up $10,000+.
That’s what I think most people mean when they say the car is a bad investment. IE: Dumping money into the car thinking it will end up being worth more and you could always sell it to recoup your losses.
Thanks