The Investment Thread

[wallus]

My folks have a second house in Glendale that they rent out. They hire a cleaning lady, a landscaper and a rental agent. It pretty well pays the mortgage but not a money-maker. Pretty good number of folks who rent it for 2-4 weeks at a time. But certainly a better deal than leaving it empty for 10 months out of the year.

 

Was thinking more like Vegas or somewhere warm. A place that I could visit for a week or two a year and then rent it out other times. I know it wouldn't be a big money maker.

[GAME05]

I should have noted it's Glendale, Arizona. Can't get any warmer. Amazingly they were rented out through the summer this year.

 

They won't rent to locals anymore. Locals are only there to party and end up making a mess and/or leave cigarette burns in leather couches. The last straw was when the cleaning lady came in and found 100# of marijuana in the bathroom. Guess the renters thought they had an extra day rented.

[owbc]

I've always looked at a vacation home as similar to owning a boat--the more friends of mine that buy vacation homes and boats, the better. But personally, heck no. I do like renting other people's AirBNBs. However, the real advantage is to be able to bring your pets along and lately it seems like hotels are more pet friendly than vacation homes are.

 

Do people actually rent AirBNBs in Vegas??? Hotels are so cheap there. I would be terrified of renting my house there given how people party in Vegas.

[thebruce44]

Still no discussion here about Bitcoin or other Cryptos...that tells me there is still a long runway to the next peak.

[MrTPlush]

There is a lot of stress/work and expense into a non local rental property like that. The most success I have seen with it is at higher end properties that attract more laid back people. Not million dollar homes/condos, but not something that college kids and cheap families will be seeking out either.

 

It can pay for the mortgage IF it is in a highly attractive area that is pretty year round. Phoenix area is really really good for that. It’s affordable to get a vacation property and attract renters pretty year round. I know someone that snow birds and they say even the non peak time sells really well for them and helps pay for the place.

[CheezWizHed]

Still no discussion here about Bitcoin or other Cryptos...that tells me there is still a long runway to the next peak.

 

Go put your house money into it and let us know how it goes.

[GAME05]

I sold my bitcoin a couple days ago. The phrase "record high" frightens me in general. The entire history of it is big gains and big falls, not steady growth.

[nate82]

There is a lot of stress/work and expense into a non local rental property like that. The most success I have seen with it is at higher end properties that attract more laid back people. Not million dollar homes/condos, but not something that college kids and cheap families will be seeking out either.

 

It can pay for the mortgage IF it is in a highly attractive area that is pretty year round. Phoenix area is really really good for that. It’s affordable to get a vacation property and attract renters pretty year round. I know someone that snow birds and they say even the non peak time sells really well for them and helps pay for the place.

 

The housing market in Phoenix is not all that cheap it is actually rather expensive especially in downtown Phoenix, Tempe and Scottsdale. The downtown Phoenix condos go anywhere from $500k to $1m the same for Tempe and Scottsdale. There are some areas where you can get a good deal now but they are extremely far out of the city limit lines and even some of those are rather expensive. If you want to live in a not so great neighbor hood then yeah you can find houses and some apartments for less than $300k but for the most part everything is in the $300-$500k range.

 

Depending on when they got the property in Phoenix it is probably a good deal I know of some people who bought some houses at about $200k and they are now valued at $500-$700k and they charge about $2000 - $3000 a month for rent. Rent prices have also been increasing here due to the mass exodus from California.

[nodakfan17]

Heck, I’m skeptical of my modest home in Green Bay appreciating by 20% in the last 5 years, but here we are.

[MrTPlush]

I guess I should clarify Phoenix area, not necessarily literally in Phoenix. I guess for a typical Wisconsin person even Phoenix is going to seem expensive. A decent vacation house that will bring in lots of short term renters will cost ~250k at least. I think they couple I know bought around that a few years ago. Obviously has a pool etc. that people would look for.

 

I don’t think it is a great investment to get into. One is better off just doing Air BnB themselves when they go on vacation. Just invest money in something more worthwhile. More lucrative and less stressful. Not to mention you won’t feel tied down to your vacation rental when you want a vacation. You can just go wherever you want.

[GAME05]

I don't recall exactly what my folks charge for rent, but it definitely isn't some bargain. They bought it about three months before the market crashed and immediately lost 40%, but it's probably a $400,000 home at this point. You can walk to the Cardinals and Coyotes arenas, and the development they've done in that area has really helped.

 

Maybe I'm wrong, but I tend to only think that being a landlord is good if you're able to offer any sort of value to that investment, like being able to do repairs yourself instead of hiring it out, or really knowing the real estate market in the area to pick out underpriced homes and know areas that are growing.

[homer]

In a perfect world, I'd buy a house with an apartment over the garage or a mother in law cottage/carriage house in the back. I would love to rent out something like that on Air BnB. I don't think I'd want to rent out one place while living somewhere else though. I'd for sure want a management company to take care of things if that was the case.

[owbc]

In a perfect world, I'd buy a house with an apartment over the garage or a mother in law cottage/carriage house in the back. I would love to rent out something like that on Air BnB. I don't think I'd want to rent out one place while living somewhere else though. I'd for sure want a management company to take care of things if that was the case.

 

I'm hoping to build a detached ADU at some point since I have a huge 1970s-era carport that I would like to downsize. Seattle recently passed some nice legislation to make the process easier, if you pick a pre-approved design you can skip most of the permitting. I think it's a very smart way to address housing shortages without tearing up neighborhoods of single-family homes.

 

A few companies have come up with some really cool pre-fab concepts for DADUs which are basically giant IKEA furniture that a motivated DIY person like myself can self-assemble.

e.g. https://urbancottageseattle.com/shell-kits/

[thebruce44]

Still no discussion here about Bitcoin or other Cryptos...that tells me there is still a long runway to the next peak.

 

Go put your house money into it and let us know how it goes.

 

I did break out $5k to put into Btc and Eth. Everything else will sit on the sidelines for 10 months. Adding that $5k to some Eth and IOTA I've had for a long time.

 

Looking at historical cycles, I hope that needing to pull money back in the fall will make me not wait too long for everything to fall apart again. Of course, I know this is not sound investing, but at least I'm not putting in more than I can afford to lose.

[owbc]

Bitcoin is classic speculation in action. It behaves like a more volatile form of gold or similar commodities. The anti-correlation with the US dollar index is pretty obvious--BTC bottomed out on 3/16/2020, DXY peaked on 3/20/2020. Will the US dollar keep dropping in 2021? Probably, but not as much as 2020. And then you throw in the randomness of BTC speculation???

[nate82]

Bitcoin is classic speculation in action. It behaves like a more volatile form of gold or similar commodities. The anti-correlation with the US dollar index is pretty obvious--BTC bottomed out on 3/16/2020, DXY peaked on 3/20/2020. Will the US dollar keep dropping in 2021? Probably, but not as much as 2020. And then you throw in the randomness of BTC speculation???

 

The US Dollar is going to drop because the US Treasury is like printer go brrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr and prints money. If the last budget bill is any indication of what is ahead for the dollar it is going to drop some more.

[owbc]

Bitcoin is classic speculation in action. It behaves like a more volatile form of gold or similar commodities. The anti-correlation with the US dollar index is pretty obvious--BTC bottomed out on 3/16/2020, DXY peaked on 3/20/2020. Will the US dollar keep dropping in 2021? Probably, but not as much as 2020. And then you throw in the randomness of BTC speculation???

 

The US Dollar is going to drop because the US Treasury is like printer go brrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr and prints money. If the last budget bill is any indication of what is ahead for the dollar it is going to drop some more.

 

That was the policy of the current administration. There is a new one taking over in two weeks. We don't know what the new administration will do yet. It's possible that all future stimulus will be blocked by Congress.

[nate82]

 

That was the policy of the current administration. There is a new one taking over in two weeks. We don't know what the new administration will do yet. It's possible that all future stimulus will be blocked by Congress.

 

Stimulus sure but that didn't really increase the debt by all that much the budget bill though now that added a whole lot more to the national debt and most of that money is just going overseas for dumb reasons. So no matter what the current or future administrations do the dollar is going to weaken due to the debt issues unless you are saying congress is going to do a 180 and will actually start caring about the national debt?

[GAME05]

Stimulus sure but that didn't really increase the debt by all that much

 

Well, the stimulus part wasn't borrowed but just printed.

 

The Fed recently changed their "aim for 2% inflation per year" to "aim for an average of 2%," which gives them a good bit more liberty to keep the printers humming if so desired. I don't see any cause to believe Democrats or Republicans will halt any of it. Too many votes out there to buy.

 

Along with national debt there's also massive corporate debt. Probably also a good number of businesses which got blown up in March but will manage to hang on for a year+ before calling it quits.

 

I see it as a matter of when, but that's still the hardest part. Not like I want to hold onto cash for two years or longer before anything finally happens. Buffett bought some interest in a gold mining company when before he's always hated gold. Granted, a company is a little different yet still kinda the same since their value directly relates to gold price. I also hear some folks recommending agriculture ETFs since poor and rich alike still have to eat. I also wonder about bargain places like Dollar General/Family Dollar, but I don't know much about them yet.

 

I just put a buy in for Ethereum, largely because my bitcoin friend steered me the right way last time and he studies crypto pretty hard. But yeah, I keep trying to think of how a person is actually supposed to value that stuff and there's just no way. Total guessing game apart from its value seeming to be tied to the inverse strength of the dollar.

[JackNicholson1974]

What gives Bitcoin value. I understand that is is a “currency” but it is a currency that absolutely nobody will ever spend. You buying groceries with your Bitcoin? If it is never used for the one thing that it is - then what is it? That’s why I have never invested in it. People “want it” because it’s going up in value. It’s just a giant Ponzi scheme. Nobody buying today is buying it to spend with, they are buying to sell to the next guy at a higher price.

[homer]

weed stocks going through the roof today

[nodakfan17]

What gives Bitcoin value. I understand that is is a “currency” but it is a currency that absolutely nobody will ever spend. You buying groceries with your Bitcoin? If it is never used for the one thing that it is - then what is it? That’s why I have never invested in it. People “want it” because it’s going up in value. It’s just a giant Ponzi scheme. Nobody buying today is buying it to spend with, they are buying to sell to the next guy at a higher price.

I have some reservations about Bitcoin, but I’ll bite here.

 

Part of Bitcoin’s appeal is that there is a finite supply. There will only ever be 21 million Bitcoins. Meanwhile, countries print new fiat money every day. Even gold, which has a fixed supply on Earth, could hypothetically be mined from other planets or asteroids some day.

[jerichoholicninja]

What gives Bitcoin value. I understand that is is a “currency” but it is a currency that absolutely nobody will ever spend. You buying groceries with your Bitcoin? If it is never used for the one thing that it is - then what is it? That’s why I have never invested in it. People “want it” because it’s going up in value. It’s just a giant Ponzi scheme. Nobody buying today is buying it to spend with, they are buying to sell to the next guy at a higher price.

I have some reservations about Bitcoin, but I’ll bite here.

 

Part of Bitcoin’s appeal is that there is a finite supply. There will only ever be 21 million Bitcoins. Meanwhile, countries print new fiat money every day. Even gold, which has a fixed supply on Earth, could hypothetically be mined from other planets or asteroids some day.

 

So it's basically a collector's item?

[GAME05]

Optimistic articles on bitcoin say that once bigger firms start to accept it as an investment its price will start to stabilize so much more than now. The ones buying now like the idea that they can get in before the big guys do and make a lot of money from it. There's a few select applications where you can pay in bitcoin, but of course with it being on fire lately nobody is going to. But even then the value of the dollar isn't going to turn into Zimbabwe in my lifetime, and so I have a hard time believing I'll be paying for gas with it anytime soon.

 

A lot more firms are starting to get into it now. And I wonder how many firms have hated it so far specifically because Warren Buffet has been very vocal that he'll never buy it.

[nodakfan17]

My local gas station advertises that they sell Bitcoin (via a kiosk), but they don’t accept it as payment. Ironic?