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In reply to SS.

A couple links showing some of the data I was lookin at:

https://www.indexmundi.com/facts/indicators/SP.POP.DPND.OL/compare?country=de#country=ca:cn:fr:de:it:es:gb:us

https://www.census.gov/content/dam/Census/library/publications/2020/demo/p25-1144.pdf (page 6)

https://www.financialsamurai.com/why-is-united-states-property-so-cheap/#:~:text=Once%20again%2C%20United%20States%20real%20estate%20is%20cheap,whack%2C%20a%20tremendous%20amount%20of%20social%20inequality%20occurs.

Thanks for these posts comparing US housing values to other countries. I have long been frustrated by the narrative that current housing is less affordable than decades past… a position that is clearly false once you adjust for home sizes and interest rates. However, I didn’t realize just how much more expensive most other developed countries are, aside from the obvious cities that are always mentioned.

After looking a bit into the demographics of these various nations, I wonder how much age distribution will play in home values in the next 10-20 years. The US has a relatively low age dependency ratio, and in particular old age dependency. However, that has been rising recently and will continue rapidly over the next 10-15 years.

The chart you posted in another post shows Italy and Germany lagging in appreciation for the last couple decades. However, they’re still relatively expensive. Did they experience high appreciation while their population was quicly aging decades ago? Once the aging began to plateau, perhaps that’s when housing began to struggle there.

Bringing this to the US, will we see rapid appreciation for the next decade or so (esp in places like FL, AZ, SC, GA, TX) as the Baby Boomers continue to retire? Then once that begins to level off a bit, might we see housing struggle for awhile similar to Italy and Germany? This seems ripe for significant wealth building by Gen X and Millennials, possibly compounded by inheriting the correlated home equity wealth from their parents as the Baby Boomers hit their 80s and 90s.

In reply to Dunning freaking kruger.

In general, I like investing in funds because I don’t have time to analyze each individual investment, and, a lot of the most interesting individual investments sell out before you can even invest.

So I think the higher return on effort strategy (ROE) is to invest in the right manager that has the right vision. My vision has been to invest in the heartland of America and residential real estate for a long time now. As a result, Fundrise is a synergistic partner.

I’ve read all their annual reports the past for years and our outlook is very much aligned.

In reply to SAS.

Hard to say. Chasing performance is an iffy strategy. I remember observing the top Morningstar rated funds of the year constantly under performing the subsequent year.

Hence, diversifying your exposure probably the best bet.

In reply to Dunning freaking kruger.

Ive been on Fundrise for a year. Love their app, easy to use, and get updates each time they acquire a new project. This latest quarter did not disappoint! I’m set up to contribute $500/ month and hope to one day use this as a means of steady income stream from real estate

I’m in Growth VII, which has only gone up 4% vs Growth III which is up 20%. Should I change? Or just the stage it is in? Though most of my money is in the Interval fund.

Due to Financial Samurai articles
On fundrise we have evaluated both Fundrise and Crowdstreet. Both my dad and I are going to plunge Fundrise as a means of diversification les volatile investments.

But holy crap! These returns are ludicrous! Like Spaceballs ludicrous! That heartland ereit is what we have been eye balling. Wish we would have committed already.So we are committing to fundrise.

I am hesitating on crowdstreet. The returns seem too good to be true. Most investments have capital call provisions which is big boy land for private equity real estate. Crowdstreet seems to cater to a more Saavy investor, hence the need for accreditation ( which we are). I feel over my head.

We are also looking at groundfloor. Short term lock up on SFR home rehabs. It’s interesting but seems risky if market turns.

Fundrise looks like a better overall investment to me.

In reply to Financial Samurai.

Would you suggest buy cali muni bonds directly or purchase through an ETF such as the vanguard cali intermediate or cali vanguard long term muni bond etf?
If you buy direct, how do you pick which cusips to invest in, and think about short term vs long term?

In reply to Financial Samurai.

Could you let me know why you choose to invest in cali muni bonds directly vs through a vanguard cali intermediate or long term etf?
Wondering what option makes the most sense
thanks!

In reply to Mikey.

In business as in life, you don’t get what you deserve. You get what you negotiate.

If that makes you uncomfortable or you’re not good at it, then be prepared to make less $$ and pay more for everything. There’s a reason that all the people at the top of business are low on the agreeable personality spectrum.

I spend every last possible second of my time with my children and I still only get about 2 hours a day with them (during the week). I leave for work before they wake up (4am) and I don’t get home until 6:30pm. I keep them up as late as I possibly can just to get more time with them but they usually can’t go past 8:30/9:00pm since they wake up early as well (5am when my husband gets ready for work).

I think you would be surprised how many parents have long commute times (1hr +) – depending on where you are in the country obviously. The vast majority of my coworkers commute a lot longer than 30 minutes – myself (though my commute is egregiously long and definitely NOT the norm). Personally I would kill 30 minute commute.

Unfortunately I also have a job that requires a lot of prep work at home. I try not to do work at home during the week so I can dedicate my home time to my kids but that means on Sundays I have about 8-10 hours worth of prep work to do. So I get 2 hours 5 days a week, the entire day in Saturdays and less than a 1/2 day on Sundays. Also, quitting work for 3 years is not realistic in the slightest. We need 2 incomes to survive.

I’ve spent over 40 years managing my own money and planning FOR retirement but I am realizing that it may now make sense to get some help managing my money AFTER retirement.

Like others who have commented, it is going to get much more difficult to keep and pass on our money to the next generation because of all of the talk around taxes and soaking the wealthy.

I never dreamed that managing and preserving our money may actually be more difficult than accumulating it.

In reply to Mikey.

I do like Redfin and am a shareholder. The solution is to go on strike and never sell until commission rates come down to more reasonable levels.

The great irony of high commission costs is that it makes it harder to sell, which is enabled homeowners to get wealthier.

I agree that the 5-6 % brokerage fee to sell a house seems too much.
What do you think is the right solution to this issue? It reminds me of the days of $30 per trade commissions for stocks for the individual investor. There are some discount brokerages such as Redfin, but I don’t know think they have gained enough traction to disrupt the status quo of the traditional brokerage model. I’m up for brainstorming and working together on something if you ever wanted to explore a new brokerage model!

For Californians, raising rents is a must due to AB 1482. Single family rentals may be exempted from the law but your contracts must include specific language. For multifamily rentals, failure to adequately raise rents will absolutely catch up to you when you go to sell. For those who are unaware, appraisers use three methods for determining value: cost, sales and income. Naturally, for income producing multifamily residences, the income approach is most applicable – search Cap Rate. Don’t fall asleep at the wheel, treat your investment property as a investment.

I started investing in rentals 15 years ago with one, paid for with life savings, and invested 100% of the profits ‘compound interest style’ into other rentals as they came along, paying cash for all. I now have 17 rentals all paid for, with a net value of 2.7 mil due to appreciation. (way) Over six figures net in passive income aint bad either
The best thing I ever did was hire a >Quality< property manager to manage them. They are out there, but require some detective work to find a really good one that works for you. Most just collect the rents, send you the rest, and you can get stuck real easy. My current manager only charges 10%, but for that fee they get 100% of my headaches!! NEVER,EVER let the tenant know you are the owner, or they will use that against you anytime they want special treatment, lower rent, etc. Trust me on this one, it will save you lots of headaches, late night phone calls, litigation and in the end, money.
Remember, this is a business, not a hobby or a social program. It is designed to make you money. Rent increases are just a part of the game, a necessary part of doing business.

My husband and I are debt free (paid off the house early a couple of years ago). Now, we are building our future retirement home on land we have owned for several years. The plan was to originally stay in our paid off home but soon realized that one story living and a more energy efficient home was better for us. Our current home is over 100 years old, renovated 25 years ago but now needs many updates. It is not the most optimal time to build due to the expense of materials and labor but we will be able to do some of the work ourselves to save on the costs. So the biggest decision will be to decide how much of the proceeds from the sale of our current home we will put towards the new mortgage and the loan term we will take out. I have changed my tune on a paid off mortgage with interest rates so low.

In reply to wiselyunwise.

I don’t know the solution to this, it is much easier to recognize a problem than to have the answer. The only thing that comes to mind is Great Depression era infrastructure spending, but rather on homes. The added benefit of this would be providing new skills to laborers who can become contractors in their own right.

In reply to Rob.

It is wishful thinking, in our current political climate this will not get passed through. Coupled with the fact that high end homes are selling like hot cakes, there is little organic potential for this to happen. Nonetheless, recognizing the problem is the first step.

In reply to The Real Estate Captain.

Sure, the key differences are the level of passivity, concentration risk, and diversification. Hence, the variables in my chart and post.

It’s not easy doing a 1031 exchange given you’ve got to identify and buy a property within a certain amount of time. I tried and couldn’t find a like-for-like property.

Further, I didn’t want to invest $2.75 million into another property. Instead, I wanted to diversify into stocks, bonds, and heartland real estate. See: Reinvestment Ideas After Selling A House For Big Bucks

That’s the beauty of so many asset classes. You invest according to your situation in life. As someone with two young children, I’m at my capacity with four rental properties. The rest of my real estate capital is going into REITs, crowdfunding, and real estate stocks.

You’ve got to invest based on your situation. Thankfully, we’ve got a lot of choice.