/biz/ - Business & Finance

[Anonymous No.11535642]

My boomer dad recently bought a "investment" house to rent out, however his mortgage along with property taxes and insurance is $4k, whereas the rent he is collecting is $3.5k

How is this good? He is losing $500 a month and is now an additional 600k in debt, and is tied down to that mortgage for the next 30 years. Meaning he has to make enough money to afford his regular house, and cover for his rental house. So he is about 1.2 million in mortgage debt but only makes 80k per year

How is this good? How do I tell him he is being reckless? He just denies what I say and says "real estate is REAL!" and "real estate only goes up!"

[Anonymous No.11535657]

I want to say this is bait but boomers are legitimately this retarded.

[Anonymous No.11535666]

He's only paying $500 a month on a $4k bill. Eventually, his tenants will pay off the bulk of his mortgage. Your dad isn't an idiot...he just has bigger balls than you do.

[Anonymous No.11535682]

>>11535666
Desu just buy $500 a month in Link and be able to buy 20 houses eventually

[Anonymous No.11535685]

I feel bad for your boomer Dad since we are about to go into a hard depression. Housing prices are going to plummet and he will be having a hard time covering 3.5k in a couple months from now.

[Anonymous No.11535698]

install gentoo

[Anonymous No.11535699]

>>11535642

It's becoming a problem of where to put your money Anon

> Cash => Inflation eating up your money

> Stocks => Crashing

> Bonds => stagnant, dropping

> Crypto => bear market, dropping

> Property => bubble

> Gold => dropping

[Anonymous No.11535701]

>>11535657
holy fuck....you zoomers are gonna get left behind. he's not losing $500 a month. He's building equity. Some day this guy will have bought a house and it will have been for 1/8th of the cost. He can sell whenever the fuck he wants.

[Anonymous No.11535710]

>>11535642
so your dad's paying $180k for a 600k house

[Anonymous No.11535712]

>>11535642

>Buying a cash flow negative property
>Unsold house inventory at it's highest point since January of 2009
>Rising interest rates about to decemate property prices

Your dad didn't buy and invesent property, he bought a future bankruptcy. Sorry fren.

[Anonymous No.11535713]

>>11535685
People have been saying this for so fucking long.

[Anonymous No.11535723]

>>11535685
this is a very real possibility, which is why I say his dad's got balls.

[Anonymous No.11535732]

>>11535666
In 14 1/4 years he’ll make back 600k, but he’ll have also lost 86,000 by then so altogether it will take him 16 years just to make his money back. Kind of a retarded investment but at least OP will reap the benefits of it in his 40’s.

>>11535657
Kek’d, it’s true

[Anonymous No.11535733]

>>11535712
This, once the bubble bursts you're dad's gonna be sol, if he was smart he would have invested in gold and silver and held for the long run.

[Anonymous No.11535736]

you dad is actually really smart
look what happened in Venezuela
everybody with debt had x amount of dollars to pay back
when the currency hyper inflated debt was easy to pay back because wages increased an insane amount

[Anonymous No.11535756]

>>11535713

People "making money" buying cash flow negative property's almost always get wiped out in a housing crash. Doesn't matter if you've made money on flips doing it for a decade. As soon as you can't sell your underwater properties and don't have the cash flow to sustain ownership, you are going to get BTFO.

[Anonymous No.11535774]

>>11535713
Do you not know what happens at the end of an economic peak?

[Anonymous No.11535777]

>>11535699
>crypto - dropping
Lmao

[Anonymous No.11535786]

people in Venezuela get paid 1.3 million dollars per month minimum
sure that's like ~$15 USD but if you get a house loan for like 20 million bolivar you can pay it back quickly
boomers just understand business better than you entitled millennials

[Anonymous No.11535800]

>>11535713
Well it's eventually going to happen but all indicators are starting to scream it going down RIGHT NOW.

[Anonymous No.11535803]

Why do people get into debt? I don't understand it's seen as the most normal thing on earth. But i really can't grasp why you want to be in debt?

[Anonymous No.11535825]

>>11535642
he's not losing money right now since the bulk of his 4k payments go into his mortgage which in turn a large chunk of that goes into equity. if housing prices rise he can stand to profit but right now, depending on how big his down payment is he is probably losing out on opportunity cost. but then again, the stock markets are bear right now so he hasn't lost any money in hindsight.

[Anonymous No.11535851]

>>11535803
haven't you heard? debt's = wealth anon! seriously though.....

[Anonymous No.11535863]

>>11535851
debt is wealth for everybody but you

[Anonymous No.11535870]

>>11535863
not so. I have a house....I have debt. The house is real wealth.

[Anonymous No.11535885]

>>11535870
Welcome to the wage slave carousel anon. Enjoy your ride for the next 20 years.

[Anonymous No.11535904]

>>11535885
Been on it for that long. Would be on it longer if I had burnt my money on rent over the last few decades. Get smart zoomer fag. We can speed it up, or slow it down, but there's no escaping the carousel.

[Anonymous No.11535914]

>>11535904
You're wrong here, i'm a 30 year old boomer with a paid off mortgage. Paid debt for 4 years. I got lucky selling a bussines and some gains to pay of the debt

[Anonymous No.11535959]

>>11535914
what? so how can you not understand the value of debt? It bought you your home.... I never suggested carrying it forever.

[Anonymous No.11535971]

>>11535959
i just wanted other people's opinion on the matter anon

[Anonymous No.11536442]

>>11535642
>real estate is REAL!
This made me kek for the first time in a while. I can literally hear my boomer parants say it out loud even though we're not from a english speaking country

[Anonymous No.11536731]

>pay 500/month for 30 years
>get revenue-generating asset afterwards that absolves you from wageslavery and sells for more than what you paid
sounds good to me
>b-but muh recession!
don't be silly, (((they))) won't crash the economy as long as it could lead to an actual revolution. 2008 America was much more bluepilled and retarded than 2018 America

[Anonymous No.11536833]

>>11536731
There was no revolution in '29 at least in america

[Anonymous No.11536853]

>>11535699
You can always at least double your money buying and selling bulk drugs but that comes with a whole host of issues that is really not worth it.

[Anonymous No.11536868]

>>11535642
he's doing it for you brainlet, show some gratitude

[Anonymous No.11536873]

>>11535732
>In 14 1/4 years he’ll make back 600k, but he’ll have also lost 86,000 by then so altogether it will take him 16 years just to make his money back. Kind of a retarded investment but at least OP will reap the benefits of it in his 40’s.
This

[sicko !3I4SJbCh8M No.11536930]

>>11536873
you forgot the part, where his poomer parent won't give him the house

[Anonymous No.11536937]

>>11536731
If (((they))) are smart, and there's conflicting data here, they'll keep the lid on the breadline can at least until they convince everyone to turn in their guns. Shit will get... complicated... for them otherwise.

[Anonymous No.11536973]

>>11535904
Year of rent < Property insurance + interest on mortgage + home insurance + utilities etc.

[Anonymous No.11536998]

I'm just mad that he bought at ATH prices. Im in LA btw, where the housing affordability is at an all time low. Interest rates are rising. Literal feces infested AIDS needle homeless tent surrounded apartments go for $500k here. How could a correction NOT happen?

[Anonymous No.11537010]

>>11535642
He should have put it into internet money like the rest of us

[Anonymous No.11537018]

>>11536998
Rent prices never seem to correct, even when the price of the assets themselves do. Probably section 8 fucking up the system similar to how medicare does with costs in healthcare.

[Anonymous No.11537044]

>>11535699
>Gold => dropping
not so fast there

[Anonymous No.11537045]

>>11535904
In the last 5 years i had invested about a downpayments worth of money for a good house into crypto. If I had used that money on a downpayment instead of investing i'd likely have killed myself by this point. the crypto investment did over 50x, now i don't need to worry about even getting a loan at all. So even though i was considering it i'm glad i did not lock up that capital early on in a House.I realize i got a bit lucky but for some young people early on i could see sticking to high risk high reward investments with their capital so you're not locking it all up in the down payment and house payments, unable to invest what you could have. It's different for everyone. I'd say if you are not lazy/have a good job, are willing to go into debt for a long time,
leaning more towards sticking around the same place, and can find a mortgage arrangement for around the price of rent then it's a good idea.

[Anonymous No.11537050]

your dad isnt charging enough for rent. rule of thumb is 1% of property value per month.

[Anonymous No.11537059]

>all the australian boomers with negatively geared negative cash flow interest only mortgaged '''investments'''

[Anonymous No.11537067]

>>11536833
But there were riots and killings in the streets.

[Anonymous No.11537083]

>>11537067
So wait for it and buy stuff.

[Anonymous No.11537107]

If doom sayers were finally right after the last three years, I really don't think we'd recover from another housing bubble.

[Anonymous No.11537182]

>>11537045
If I had put the money I put in crypto on a house, id have equity. Instead im down 50% from initial. JUST

[Anonymous No.11537497]

>>11537182
Someone had to buy my bags lol. but for real hold the Bitcoin for 4 more years and then see where you are at. I was down 60% on my bitcoin at the lowest point in 2015 (and i bought more at that point) before it ended up being up %5000+. you're not going to make the gains those who bought under $100 will make but it's still going to be a lot more than owning a home, likely. But like i said its not for everyone, getting a mortgage can be smart for the right people, and the investment doesnt have to be crypto, lots of stuff outperformed real estate by a lot in the last 10 years. hang in there bud!