Madison MoneySports - Personal Finance Thread

[D_Eclipse9916]

People seem to be posting like you have to do one or the other. Most of us have money tied up in both given our primary residences. Yes, it's investing in real estate because none of us would tie up 5-6 figures in a down payment if we thought it was gonna lose money. I did not want to buy a house in Seattle, but we made $300k in four years. Extreme example, but that wasn't an investment I was gonna miss out on. The reality is both sides are right and you could/should do both to diversify.

Twenty years ago, I was the onsite property manager for a bunch of rentals my dad had in Alexandria. It sucked, a lot. People are pretty shitty to other people's things and basically cleaning up after them was annoying. The margins are pretty thin when you factor in maintenance cost; your real money comes in equity building over 10 years. If you're cool dealing with people's bullshit, do the work yourself. If that's annoying and you have the margin, a property manager can relieve you of that annoyance.

If we move to Europe, we're gonna keep our house and do a full management company. I don't want to have to do anything more than make decisions via email from the other side of the globe.

I've also passively shopped a vacation property in the mountains for years. That one is consider running myself as an Airbnb, but we wouldn't live close. I'd still have to find local contractors to do the work and I wouldn't be around to see the result. My decision there would largely depend on if I could break even while still using the cabin as a family when we wanted.

---

Also, real estate is NOT liquid. You need some investments you can turn into cash penalty free should you end up unpaid for 6-12 months... for whatever reason. 401k isn't the answer.

Agreed on all points.

However “real estate investment” of personal property does not give you anything into retirement as you have to live SOMEWHERE and also doesn’t give you a return every month in cash. Seattle is a bubble, expecting big gains is like expecting 10% returns the next 20 years

Many ways to skin a cat! I personally enjoy it and have a good resource. You may have 180 of an experience.