Quote:
Originally Posted by DareRing
I understand, but my point is don't advise people to risk more than they can afford to lose. Using the scenario above, what would you do if all your paper wealth was tied up in 5 mortgages that you now can't get rid of if/when the economy collapses and you suddenly have no income. I'm afraid people are making too many assumptions, basing their financial decisions looking back on the last twenty or thirty years, and drawing lessons that conflict with more common-sense priorities like securing a place to live. I believe there's plenty of reason to worry that 2007-2037 will be nothing like 1976-2006, so I am trying to take a longer view, and conclude that historically the land-owners always do better than the serfs. No tin foil hat pics please. I'm not telling anyone to buy a cave and horde ammo. But there are fatal flaws in the way we create "money" that will finally be exposed if diminishing energy supplies halt what those funny economists call "growth". Need before greed, that's all I'm saying.
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you are making tooo many assumptions. Every situation is different. The chances of you not being able to rent all 5 properties in my example is very very slim. Most people will have more income coming in from other sources, I doubt they will go get 5 rentals in my example and quit their job.
The point is, making money of the the bank's money is the way to go.
if you pay cash for everything you are never going to grow.
Think it through. You save up for years to collect 100K, you go buy your rental. 100K home should make at least $700 rent (EXAMPLE) so minus, upkeep, taxes, vacancy, insurance, lets say you manage to put away 6K a year. I think that is being generious. If it is a cheap house you going to have some major repairs more often. so put away 6K a year, now you have to collect for 20 more years to get enough money for this 1 house to buy the next one.
Wow at this rate you will be lucky to own 4 houses before you die.
it's not "greed" its called business. Go ask anyone, the model i gave is the standard model used by people who do this day in and day out.
paying 100% cash for investments is just plain stupid, sorry can't put it any other way. You can try arguing it all you want, go ask your bank, financial advisor, anyone who makes investments and they will tell you the same thing.