Would you buy a house now for semi-investment if you have the cash?

I

irvinekids

New member
So I know this is a good problem to have, but I would still like some advise.

My husband and I have a a few rental properties and haven't been really looking to buy more because they have been a lot of work and headache for me. We now have more savings, and we have some in stock of course, but we are pretty conservative and always worry about putting too much in stocks. I know OC real estate pretty well and I am now thinking of getting another one. I have been on Redfin everyday for years now and have seen the trends during covid. While I know no one can predict where housing price is going, would you buy another property right now if you were in my situation? I am looking at south Irvine, because that's the area I like the most. I have a pretty open budget. I do not need any agent recommendations. Thank you!
 
irvinekids said:
So I know this is a good problem to have, but I would still like some advise.

My husband and I have a a few rental properties and haven't been really looking to buy more because they have been a lot of work and headache for me. We now have more savings, and we have some in stock of course, but we are pretty conservative and always worry about putting too much in stocks. I know OC real estate pretty well and I am now thinking of getting another one. I have been on Redfin everyday for years now and have seen the trends during covid. While I know no one can predict where housing price is going, would you buy another property right now if you were in my situation? I am looking at south Irvine, because that's the area I like the most. I have a pretty open budget. I do not need any agent recommendations. Thank you!
Click to expand...

Investing in RE can be very time consume.  It is fine if you have time to deal with tenants, maintenances? Have you thought of investing in REITs? It?s another way of RE investment w/o doing all the dirty works.
 
Danimal said:
irvinekids said:
So I know this is a good problem to have, but I would still like some advise.

My husband and I have a a few rental properties and haven't been really looking to buy more because they have been a lot of work and headache for me. We now have more savings, and we have some in stock of course, but we are pretty conservative and always worry about putting too much in stocks. I know OC real estate pretty well and I am now thinking of getting another one. I have been on Redfin everyday for years now and have seen the trends during covid. While I know no one can predict where housing price is going, would you buy another property right now if you were in my situation? I am looking at south Irvine, because that's the area I like the most. I have a pretty open budget. I do not need any agent recommendations. Thank you!
Click to expand...

Investing in RE can be very time consume.  It is fine if you have time to deal with tenants, maintenances? Have you thought of investing in REITs? It?s another way of RE investment w/o doing all the dirty works.
Click to expand...

I agree with you about the hassle of dealing with tenants and maintenances. I have a property management for my rental and I still hate dealing with HoA, which is why we're deciding to sell the rental when the lease expires in June.

However, in OP's case, they already have a few rental properties, so adding another one shouldn't make much of a difference.
 
You want to protect your cash from inflation.
I put my extra in the stock market.
A house is ok too, but is way more work...and not liquid.
But at least you can touch it.
 
zubs said:
You want to protect your cash from inflation.
I put my extra in the stock market.
A house is ok too, but is way more work...and not liquid.
But at least you can touch it.
Click to expand...

That's one of the reasons I rather invest in stock than real estate. I prefer liquid asset.
 
irvinekids said:
So I know this is a good problem to have, but I would still like some advise.

My husband and I have a a few rental properties and haven't been really looking to buy more because they have been a lot of work and headache for me. We now have more savings, and we have some in stock of course, but we are pretty conservative and always worry about putting too much in stocks. I know OC real estate pretty well and I am now thinking of getting another one. I have been on Redfin everyday for years now and have seen the trends during covid. While I know no one can predict where housing price is going, would you buy another property right now if you were in my situation? I am looking at south Irvine, because that's the area I like the most. I have a pretty open budget. I do not need any agent recommendations. Thank you!
Click to expand...

Where are you planning to live when your husband and you have retired? Perhaps buy a property that will meet those future needs of yours.
 
If you plan on owning this home for a longer term then it's fine to buy.  I wouldn't buy for cash or mostly cash when rates are so low.  Run the rental comps and see how high of a mortgage brings you to break even as use that as you loan amount.
 
Depends on how diversified you are. If you already have a heavy real estate portfolio then it might make sense to put more in stocks. Maybe even put 1% in crypto and let that do it?s magic. If it goes to the moon you win, if it goes to 0, it?s only 1%.
 
zubs said:
You want to protect your cash from inflation.
I put my extra in the stock market.
A house is ok too, but is way more work...and not liquid.
But at least you can touch it.
Click to expand...

I thought you bought the dip. hehe
 
I was gonna buy a house that is $600,000 now, but $460,000 back in 2018.
Then I thought goddam....I'd rather stick it in the stock market then have to manage another (sentence enhancer) rental.
 
Danimal said:
irvinekids said:
So I know this is a good problem to have, but I would still like some advise.

My husband and I have a a few rental properties and haven't been really looking to buy more because they have been a lot of work and headache for me. We now have more savings, and we have some in stock of course, but we are pretty conservative and always worry about putting too much in stocks. I know OC real estate pretty well and I am now thinking of getting another one. I have been on Redfin everyday for years now and have seen the trends during covid. While I know no one can predict where housing price is going, would you buy another property right now if you were in my situation? I am looking at south Irvine, because that's the area I like the most. I have a pretty open budget. I do not need any agent recommendations. Thank you!
Click to expand...

Investing in RE can be very time consume.  It is fine if you have time to deal with tenants, maintenances? Have you thought of investing in REITs? It?s another way of RE investment w/o doing all the dirty works.
Click to expand...

Unless you're in the lowest tax bracket, I personally wouldn't put any significant amount of money in REITs because dividends from REITs are taxed as ordinary income (not even as qualified dividends from stocks) and you wouldn't get any leverage (you could use margins but that's a whole different topic).

It's very interesting that OP emphasizes that she doesn't want any agent recommendations. I will give you a non-typical realtor answer. If you're looking for an investment property, considering how much you would likely need to bid over asking prices due to extremely low inventory at this time, the rent to value ratio would hardly make any sense. Irvine is also fairly saturated with rental properties. I expect more rental properties to come on the market as the eviction moratorium ended back in October. If I had a long-term horizon (10+ years), could lock in a 30-year fixed mortgage at a low rate, and wouldn't mind dealing with tenants, I still would continue to look and possibly buy next year when the market stabilizes or pulls back a bit. Irvine or south OC is an extremely desirable area and will likely appreciate more than the national average over the long run. The key word is long term.

If you hate dealing with tenants but still want some cashflow, I'd consider 2 other options: selling puts on stocks that you want to own any way; converting cash into USDC (USD Coin) and earn 9% annualized return.
 
What makes you feel the market will stabilize or pull back a bit next year? A few months ago, I thought the market will slow down a bit when the winter months approach, but it doesn't feel that way really.

I used the word "semi-investment" because cash flow wise, I wouldn't buy the best property, not even close. I am not interested in REITs, I am biased, I used to work as an REIT tax accountant when I was a CPA, I am not a fan of them for many reasons. I enjoy and take pride in owning houses, not a huge fan of being a landlord, but I am pretty experienced in dealing with tenants and repairs (10 years now since my first rental). Nowadays, I am more interested in buying a house that I like, and maybe my parents or my in-laws will live in one day when they are older, so something a little more more pricy than a typical rental, maybe around 1.5+perhaps.

Agent Joe said:
Danimal said:
irvinekids said:
So I know this is a good problem to have, but I would still like some advise.

My husband and I have a a few rental properties and haven't been really looking to buy more because they have been a lot of work and headache for me. We now have more savings, and we have some in stock of course, but we are pretty conservative and always worry about putting too much in stocks. I know OC real estate pretty well and I am now thinking of getting another one. I have been on Redfin everyday for years now and have seen the trends during covid. While I know no one can predict where housing price is going, would you buy another property right now if you were in my situation? I am looking at south Irvine, because that's the area I like the most. I have a pretty open budget. I do not need any agent recommendations. Thank you!
Click to expand...

Investing in RE can be very time consume.  It is fine if you have time to deal with tenants, maintenances? Have you thought of investing in REITs? It?s another way of RE investment w/o doing all the dirty works.
Click to expand...

Unless you're in the lowest tax bracket, I personally wouldn't put any significant amount of money in REITs because dividends from REITs are taxed as ordinary income (not even as qualified dividends from stocks) and you wouldn't get any leverage (you could use margins but that's a whole different topic).

It's very interesting that OP emphasizes that she doesn't want any agent recommendations. I will give you a non-typical realtor answer. If you're looking for an investment property, considering how much you would likely need to bid over asking prices due to extremely low inventory at this time, the rent to value ratio would hardly make any sense. Irvine is also fairly saturated with rental properties. I expect more rental properties to come on the market as the eviction moratorium ended back in October. If I had a long-term horizon (10+ years), could lock in a 30-year fixed mortgage at a low rate, and wouldn't mind dealing with tenants, I still would continue to look and possibly buy next year when the market stabilizes or pulls back a bit. Irvine or south OC is an extremely desirable area and will likely appreciate more than the national average over the long run. The key word is long term.

If you hate dealing with tenants but still want some cashflow, I'd consider 2 other options: selling puts on stocks that you want to own any way; converting cash into USDC (USD Coin) and earn 9% annualized return.
Click to expand...
 
irvinekids said:
What makes you feel the market will stabilize or pull back a bit next year? A few months ago, I thought the market will slow down a bit when the winter months approach, but it doesn't feel that way really.
Click to expand...

Yeah, I was hoping the market would slow down starting November, but the housing price seems to have increased even more in the past couple of month.
 
Agent Joe said:
Danimal said:
irvinekids said:
So I know this is a good problem to have, but I would still like some advise.

My husband and I have a a few rental properties and haven't been really looking to buy more because they have been a lot of work and headache for me. We now have more savings, and we have some in stock of course, but we are pretty conservative and always worry about putting too much in stocks. I know OC real estate pretty well and I am now thinking of getting another one. I have been on Redfin everyday for years now and have seen the trends during covid. While I know no one can predict where housing price is going, would you buy another property right now if you were in my situation? I am looking at south Irvine, because that's the area I like the most. I have a pretty open budget. I do not need any agent recommendations. Thank you!
Click to expand...

Investing in RE can be very time consume.  It is fine if you have time to deal with tenants, maintenances? Have you thought of investing in REITs? It?s another way of RE investment w/o doing all the dirty works.
Click to expand...

Unless you're in the lowest tax bracket, I personally wouldn't put any significant amount of money in REITs because dividends from REITs are taxed as ordinary income (not even as qualified dividends from stocks) and you wouldn't get any leverage (you could use margins but that's a whole different topic).
Click to expand...

Net rental income is taxed as ordinary income at your tax bracket.
 
CalBears96 said:
irvinekids said:
What makes you feel the market will stabilize or pull back a bit next year? A few months ago, I thought the market will slow down a bit when the winter months approach, but it doesn't feel that way really.
Click to expand...

Yeah, I was hoping the market would slow down starting November, but the housing price seems to have increased even more in the past couple of month.
Click to expand...

It?s gonna worse since October as inventory levels have kept declining.
 
eyephone said:
Agent Joe said:
Danimal said:
irvinekids said:
So I know this is a good problem to have, but I would still like some advise.

My husband and I have a a few rental properties and haven't been really looking to buy more because they have been a lot of work and headache for me. We now have more savings, and we have some in stock of course, but we are pretty conservative and always worry about putting too much in stocks. I know OC real estate pretty well and I am now thinking of getting another one. I have been on Redfin everyday for years now and have seen the trends during covid. While I know no one can predict where housing price is going, would you buy another property right now if you were in my situation? I am looking at south Irvine, because that's the area I like the most. I have a pretty open budget. I do not need any agent recommendations. Thank you!
Click to expand...

Investing in RE can be very time consume.  It is fine if you have time to deal with tenants, maintenances? Have you thought of investing in REITs? It?s another way of RE investment w/o doing all the dirty works.
Click to expand...

Unless you're in the lowest tax bracket, I personally wouldn't put any significant amount of money in REITs because dividends from REITs are taxed as ordinary income (not even as qualified dividends from stocks) and you wouldn't get any leverage (you could use margins but that's a whole different topic).
Click to expand...

Net rental income is taxed as ordinary income at your tax bracket.
Click to expand...

Not when you claim depreciation of your rental properties to offset that income?.common way rental prop owners use to avoid tax.

Anyhow, OP sounds like she is very investment savvy with a CPA and all. I wonder why some people even bother posing questions in which they already know the answers. 
 
Danimal said:
eyephone said:
Agent Joe said:
Danimal said:
irvinekids said:
So I know this is a good problem to have, but I would still like some advise.

My husband and I have a a few rental properties and haven't been really looking to buy more because they have been a lot of work and headache for me. We now have more savings, and we have some in stock of course, but we are pretty conservative and always worry about putting too much in stocks. I know OC real estate pretty well and I am now thinking of getting another one. I have been on Redfin everyday for years now and have seen the trends during covid. While I know no one can predict where housing price is going, would you buy another property right now if you were in my situation? I am looking at south Irvine, because that's the area I like the most. I have a pretty open budget. I do not need any agent recommendations. Thank you!
Click to expand...

Investing in RE can be very time consume.  It is fine if you have time to deal with tenants, maintenances? Have you thought of investing in REITs? It?s another way of RE investment w/o doing all the dirty works.
Click to expand...

Unless you're in the lowest tax bracket, I personally wouldn't put any significant amount of money in REITs because dividends from REITs are taxed as ordinary income (not even as qualified dividends from stocks) and you wouldn't get any leverage (you could use margins but that's a whole different topic).
Click to expand...

Net rental income is taxed as ordinary income at your tax bracket.
Click to expand...

Not when you claim depreciation of your rental properties to offset that income?.common way rental prop owners use to avoid tax.

Anyhow, OP sounds like she is very investment savvy with a CPA and all. I wonder why some people even bother posing questions in which they already know the answers.
Click to expand...

Have you heard of depreciation recapture?

Is this amateur investing?  ;) :)
 
It?s just hard to talk about this stuff with friends and family in real life, because I don?t know too many people that can relate to the situation. So I post here with a new handle lol. We are not rich, but comfortable and conservative financially, I have a lot of anxiety when I think about stock, taxes, houses and money.  Every time I feel this way and want to even more torture? I come here and see what you guys are up to?

Danimal said:
Anyhow, OP sounds like she is very investment savvy with a CPA and all. I wonder why some people even bother posing questions in which they already know the answers. 
Click to expand...
 
Is this the latest version of the wealth levels in the US? It should be updated after the pandemic with the high inflation.
 

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