Investment discussion
03-23-2018, 06:00 PM
#16
Rennlist Member
If I had to do it all over again, I would have married rich.
03-23-2018, 07:12 PM
#18
That would be rule 2.
As I progressed through my career, increasing my salary, my lifestyle didn’t really change. Probably took 5 years before we started to spend money on more frivolous items.
I also believe in paying it forward and have increased my charitable contributions and also help out my nieces/necessary and my best friends kids. Treat these kids as my own.
I actually have a hard time spending 20 but on garbage.
As I progressed through my career, increasing my salary, my lifestyle didn’t really change. Probably took 5 years before we started to spend money on more frivolous items.
I also believe in paying it forward and have increased my charitable contributions and also help out my nieces/necessary and my best friends kids. Treat these kids as my own.
I actually have a hard time spending 20 but on garbage.
03-23-2018, 09:08 PM
#19
03-23-2018, 09:26 PM
#20
Rennlist Member
I borrowed against my home to come up with the 20% down and closing costs on a 3 unit home.
After renting it, I cash flow $1000/month positive over all costs.
In addition to the $12k/year cash flow (minus a few expenses, but not much) $19k of the principal was paid down by the tenants last year.
That’s also not factoring in appreciation. Toronto has seen an average of 7% YOY of homes over the past 42 years.
I eneed up borrowing from that rental to do it all over with a second.
There will I’ll be upstairs and downs in the market but I’m 37, so I have time to rides the cycles and in the meantime, value of the homes aside, I’ll be collecting rent and more mortgages will be paid by someone else.
After renting it, I cash flow $1000/month positive over all costs.
In addition to the $12k/year cash flow (minus a few expenses, but not much) $19k of the principal was paid down by the tenants last year.
That’s also not factoring in appreciation. Toronto has seen an average of 7% YOY of homes over the past 42 years.
I eneed up borrowing from that rental to do it all over with a second.
There will I’ll be upstairs and downs in the market but I’m 37, so I have time to rides the cycles and in the meantime, value of the homes aside, I’ll be collecting rent and more mortgages will be paid by someone else.
03-24-2018, 09:49 AM
#22
I borrowed against my home to come up with the 20% down and closing costs on a 3 unit home.
After renting it, I cash flow $1000/month positive over all costs.
In addition to the $12k/year cash flow (minus a few expenses, but not much) $19k of the principal was paid down by the tenants last year.
That’s also not factoring in appreciation. Toronto has seen an average of 7% YOY of homes over the past 42 years.
I eneed up borrowing from that rental to do it all over with a second.
There will I’ll be upstairs and downs in the market but I’m 37, so I have time to rides the cycles and in the meantime, value of the homes aside, I’ll be collecting rent and more mortgages will be paid by someone else.
After renting it, I cash flow $1000/month positive over all costs.
In addition to the $12k/year cash flow (minus a few expenses, but not much) $19k of the principal was paid down by the tenants last year.
That’s also not factoring in appreciation. Toronto has seen an average of 7% YOY of homes over the past 42 years.
I eneed up borrowing from that rental to do it all over with a second.
There will I’ll be upstairs and downs in the market but I’m 37, so I have time to rides the cycles and in the meantime, value of the homes aside, I’ll be collecting rent and more mortgages will be paid by someone else.
Nice. It's not easy to find cash flow (after paying principal) positive rentals but they are out there. With the cost of property being so high I think there will be a strong rental market for quite a while. The stock market has its positives but for some reason I still like the feeling of hard assets like property. Just need to make sure to get good tenants. Happy returns.
03-24-2018, 10:19 AM
#23
Some people believe in only investing in either stock market or some only in Real Estate investments. I believe both is the key to long term success, my real estate investments pay for my lifestyle and the excess gets invested in stock etc. this way the up and downs are not important since I don't depend on investments in the market. I have never spend any funds that are invested in the market but I have leveraged real estate. Then there are tax advantages like depreciation and exchange deals with real estate that are helpful.
03-24-2018, 06:18 PM
#24
Rennlist Member
Nice. It's not easy to find cash flow (after paying principal) positive rentals but they are out there. With the cost of property being so high I think there will be a strong rental market for quite a while. The stock market has its positives but for some reason I still like the feeling of hard assets like property. Just need to make sure to get good tenants. Happy returns.
But they are are both in locations I see a lot of growth in (one has had a flurry of trendy restaurants open a block away and is an 8min walk to one of the proposed Smart Track stations) and the other is a 1min wall to the subway with a number of condo projects proposed nearby and the GO Station a 6min wall away.
03-24-2018, 08:51 PM
#25
Rennlist Member
Thread Starter
Thanks for the comments - all very interesting. I kicked off the thread a few days ago and don't like to post and run!
My question was worded as generically as possible on purpose so it would get the widest response - I didn't want it to be specifically about me since this is a question that gets asked all the time by many of us. Really appreciate the experiences shared.
Thanks again.
Cheers
Matt
My question was worded as generically as possible on purpose so it would get the widest response - I didn't want it to be specifically about me since this is a question that gets asked all the time by many of us. Really appreciate the experiences shared.
Thanks again.
Cheers
Matt
03-25-2018, 11:23 AM
#26
03-25-2018, 08:08 PM
#27
Rennlist Member
Always an interesting topic....
As I have explained to my financial advisor, if I make an extra $50k on investments this year, my life will be unchanged. I wouldn't even think about it. If I lost $1k, I would be really upset. This is my issue and I am very risk averse.
That being said, by age 36, I had my Toronto home and Kawartha 90 minutes from 401/404 cottage paid off. I am a dink. Nonetheless, wife and I worked really hard.
I think the key to financial success is quite simple. Do not finance depreciating assets. Corollary is to pay your debt as soon as possible. Pay cash for everything. I have never financed a car, a boat or any of my toys.
My first world problem is promised myself a 911.....and there is no inventory! (my own fault, too picky).
As I have explained to my financial advisor, if I make an extra $50k on investments this year, my life will be unchanged. I wouldn't even think about it. If I lost $1k, I would be really upset. This is my issue and I am very risk averse.
That being said, by age 36, I had my Toronto home and Kawartha 90 minutes from 401/404 cottage paid off. I am a dink. Nonetheless, wife and I worked really hard.
I think the key to financial success is quite simple. Do not finance depreciating assets. Corollary is to pay your debt as soon as possible. Pay cash for everything. I have never financed a car, a boat or any of my toys.
My first world problem is promised myself a 911.....and there is no inventory! (my own fault, too picky).
03-26-2018, 12:43 PM
#28
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The finance depreciating asset to park money in income producing investments is always an interesting discussion. Ex. Finance car at 3.5% and put the difference between buying and the down payment into investments that will hopefully make more than 3.5%.
It depends on how the person treats debt. I hate the idea of it and have none currently. So I wouldn't finance the car in the example.
For general finance
1. Live on less than you earn
2. Don't spend unnecessarily
3. Invest what you don't spend
It depends on how the person treats debt. I hate the idea of it and have none currently. So I wouldn't finance the car in the example.
For general finance
1. Live on less than you earn
2. Don't spend unnecessarily
3. Invest what you don't spend
03-26-2018, 12:50 PM
#29
However you are ignoring the power of leverage. In the case of properties, discussed earlier, it's possible to buy a property with fully financed monies that are being repaid by the rental revenues, including principal. So for no real cash outlay you can, with the right properties, have someone make all your payments for you while you have a place paid for. Now in the case of property is not as passive as pure stocks but I think every investment requires some time and effort. Its not for everyone of course.
03-26-2018, 12:56 PM
#30
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That's very true, Real Estate Investing is a different animal.
You need to make sure that the property will cash flow properly, and have an emergency fund in case something goes wrong (Ex. roof leak)
It's something that I'm extremely interested in and will be looking at getting into within a few years.
You need to make sure that the property will cash flow properly, and have an emergency fund in case something goes wrong (Ex. roof leak)
It's something that I'm extremely interested in and will be looking at getting into within a few years.