Why is Real Estate Better than the Stocks?

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I get this question asked to me a lot. “Why would I invest in Real Estate, why wouldn’t I just leave my money in the Stock Market.”

I see a lot of these financial papers or financial write ups that show financial comparison of a stock performance or of a stock index performance as it relates to Real Estate or Real Estate indexes as well. One of the things they show is just an increase line. So for example a graph, they will show the price of the stock or that index from 20 years ago and then they show increase of that stock and maybe a leveling or an increase or whatever. Then they will show at the end here is where we started, here is where we are now and has risen

Then they will take the same Real Estate analysis and they will show the same thing. Maybe they will show Real Estate didn’t improve at the same rate of appreciation or the same increase as compared to the stock. When they are doing that all they are really showing or comparing si the price of the stock vs the price of the Real Estate or the price of the property. So if you bought the property for $300,000.00 and they are showing over 20 years that property is now worth $600,000.00 compared to the Stock where there’s a bunch of stocks that you bought worth $300.00 and now they are worth $700.00.

The Truth About Those $500 Detroit Houses

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I saw a piece in Yahoo News about this and I wanted to pass it along. I get at least a couple of calls every month from out of state folks asking about these.

The article does a good job in explaining just why a $500 house isn’t the bargain that people think it is. Here it is…

Tempted by Detroit’s $500 Properties? 5 Things to Know

By Beth j. Harpaz, Associated Press – March 11, 2015 4:45 PM

DETROIT (AP) — Sixty-two thousand properties have faced foreclosure in Detroit this year over unpaid taxes. About half will likely be auctioned for $500 apiece this fall.

Buying homes or vacant lots for $500 might sound inviting, even in a city as troubled as Detroit. After all, look at New York: Decades of crime and decay gave way to a real estate boom that has gentrified even outlying working-class neighborhoods. Properties that sold for thousands in the bad old days are now worth millions.

But there are no guarantees. “The opportunities are there but there are huge challenges,” said Dang Duong, a law and business student at the University of Michigan who has bought and renovated several dilapidated homes in Detroit. “If you’re under the impression you can buy a property for $500 and wait a few years until Detroit has recovered, that’s going to be difficult.”

Here are five things to consider before buying property in Detroit.

1. THE HOUSE MAY BE OCCUPIED

Are you prepared to evict former owners, longtime tenants or even squatters? Loveland Technologies, a mapping company that has surveyed every property in Detroit, estimates that half the properties facing foreclosure are occupied, housing about 100,000 Detroiters.

Critics question the morality of buying occupied homes and fear the program may increase Detroit’s homeless population. They say many owners stopped paying taxes because they weren’t getting city services in return. Others say those who failed to pay taxes contributed to Detroit’s troubles.

Incredible Productivity System: Bullet Journal

Starting with my first Franklin Planner in 1995, I have been engaged in a seemingly endless quest to develop the perfect productivity and organizational system.

The Franklin system was truly spectacular. I was working in Silicon Valley at the time, and taking the introductory class from a real FP trainer was required after you got hired. It didn’t take long to see why. The class was two full days long, and it laid out a simple and elegant paper-based methodology for organizing and tracking everything in your life – from appointments to tasks to random thoughts and ideas.

I used it religiously. Right up to the point when I bought my first Palm device in 1999. With it I was able to sync my calendar with the device, and that made the entire calendar function in the FP redundant and ultimately unnecessary.

Then I found GTD – David Allen’s methodology, which had a huge impact on my productivity, and I started using various paper-based and electronic methods of tracking notes, tasks, and projects.

None of which worked particularly well. I even used the GTD add-in for Outlook. It was good but not great.

Now is the Right Time to Invest in Real Estate

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Why is it the right time to Invest in Real Estate? This is Canada this is January 15th and the Bank of Canada just dropped their bank rates by 0.25% and its now sitting at .75%. What that means is that banks themselves could follow suit and adjust their own lending rates some are saying they are not going to do anything. Regardless, you have interest of less than 1%. Right now if you have good credit and you want to get a mortgage you can get mortgages in the range of 2.5% its ridiculous how low interest rates are right now.

So one of the reasons now is a good time to Invest in Real Estate is because the interest is at all-time low and you want to take advantage of that. Because interest rates are at an all-time low, when you are collecting rent, and paying expenses your mortgage is that much less than when you were getting at 3%.

So if you’re collecting the same rent the difference in the two is phenomenal. The second reason is because house prices are at an all-time low as well. The reason that houses are low is because people can’t qualify for mortgages as easily. I know that sounds strange because the interest rates are much lower but there is still a qualifying rate.

Smart Investment Money Goes for Real Estate

dennisfassett.comI found a great article by Denis Kleinfeld on the Moneynews.com website that talked about real estate as an investment vehicle and I wanted to pass it along.

Here’s the piece:

I know that many people are unhappy with the way their money managers have been handling their investment portfolio. This becomes readily apparent to me every time I sit in one of those meetings between the client and their investment advisers.

The meeting pattern is so predictable. First, the review of the current portfolio holdings explaining that while they didn’t meet the benchmarks, the portfolio did better than others did. The implication being that it was a good thing that they were handling the investments otherwise the client would have lost more money with the other guys.

Second, the presentation of the predicted investment climate for the next month or quarter is made. All sorts of glossily printed charts and graphs based on something called data tell the future in mathematical terms. The chief economist of the firm has pronounced what will happen and the client is expected to dutifully be in awe of his brilliance.

You would think that listening to these guys that the world of investment consists of primarily stock and bonds and something called alternative investments.

I have the impression that they lump everything they actually know little about into the alternative investment category.