Retirement in stocks and mutual funds?

[PurpleChicken]

My thoughts on rental properties:

Normally I love them and compleletly agree with Ruth about the availability of great
deals.

I have some troubles with it though. First, because there are so many houses people
can't sell there is more supply of rentals than demand. Our house is for sale and we were
gonna rent it out(it's a 2 family) if we couldn't sell it. I'm not sure at this point if we could
rent it to even cover expenses.

Second, how long will it take for real estate values to start an upswing again? I fear
we are looking at at least 10 years for the market to correct itself.

With that said, real estate has historically been a good investment and yes, renters
can be a pain, but don't listen to all the "you can't do that" people.

 

[mrandmrschicken]

Rentals have to be looked at as long term investments. Ours are not "flips", they are rental properties that provide us with a steady source of income and also produce tax benefits. We have owned them for 12 years. And as I posted earlier, the economy is strong where we live and rentals are very much in demand.
Our homes are not HUD approved nor, will I bow to them. It is another form of government intrusion in the private sector. In my experienced opinion, when an individual asks if the homes are HUD approved, usually, you do not want them as tenants. (Sorry about the brief protest...)
There is a large number of people who can not handle or do not want to accept the responsibility of home ownership.
And yes, sadly some tenants are... bad, and have no concern or care for the property of others. We just finished cleaning up after one such tenant. Most are responsible.

I felt compelled to edit my comments.

 

[mtnhomechick]

Quote:
You and I think an awful lot alike. I did that three weeks ago.

 

[speckledhen]

Well, our small principal is about $.80 lower per share than when we put it in this fund four years ago. It had gone up by almost $4 per share just a few months ago. We're meeting the guy today and will probably put it in a CD till things calm down a bit. At least we wont lose anymore. OR, since this is a long term fund, we may just leave it and see what happens. It's targeted for about 10 more years.

 

[ruth]

PC and Mrandmrschickens are right about rentals - there are downsides to them, like bad tenants, and having to make repairs and getting phone calls about the heat not working or the toilet overflowed. We were fortunate that we always had good tenants. One set of tenants, for six years, were my daughter and her husband. As was mentioned, you should buy rental property as a long term investment - not "flipping". We bought great deals through HUD which is who FHA foreclosures go through - but we did NOT do the HUD approval or "Section 8" because eventhough the government will pay you double what you could rent on the open market, they sort of control you and your rental home and who can rent to and they have all the say. So, we never Section 8 a rental. Every time we put a "for rent" ad in the paper, most of the callers' first words would be "is it Section 8" - no sorry. So there is that option if you want to take it. Section 8 and get more in rent from the government but be prepared to have to rent to whoever shows up first with the rental voucher and not have any say in it. We would always meet the potential renters and I went more off a gut feeling than anything else. I never did a credit check or background check though those services are available. We sold two of the homes on the same street after 6 years because the area in which we bought the homes was starting to go down but homes were selling at a premium after Katrina so like all good investments, we bought low and took the opportunity when we saw it to sell high. Right now on HUD's site there are many more homes in the BR area that we could buy anywhere from $30,000 up. With rental property you have to consider the area it's in and whether or not there are enough renters. In a college town, you can pick up a great deal on a "dump" of a house and rent it to frat guys - but we haven't taken that route either.

PC mentioned that there are so many homes on the market for sale that it might be hard to rent and that is true in some cases but in most cases, the people need to sell those homes and renting them isn't an option because they need the equity money to buy another one or get out from under the note. The best deals, when buying rental property, is to buy the foreclosed properties like HUD has on their site.

Good luck everyone with your investments - keep your eyes open for good stock picks from good, established companies whose stock price is getting hammered right now because of the panic. That too will go back up over time.

Just trying to offer everyone a little "light at the end of the tunnel" way of looking at things.

 

[the1much]

If you had purchased $1000.00 of Nortel stock one year
ago, it would now be worth $49.00.
With Enron, you would have $16.50 left of the original
$1000. With WorldCom, you would have less than $5.00 left.
IF you had purchased $1000.00 of Delta Air Lines stock, you
would have $49.00 left.If you had purchased United Airlines,
you would have nothing left. But, if you had purchased
$1000.00 worth of beer one year ago, drank all the beer,
then turned in the cans for the aluminum recycling refund
you would have $214.00. Based on the above, the best current
investment advice is to drink heavily and recycle. THIS IS
CALLED THE 401-KEG PLAN

 

[DomiHentrix]

I know someone whose 401 k dropped from 150,000 to 50,000. I really feel for anyone who was looking to retire on a 401 in the next couple of years.

 

[speckledhen]

We left ours alone after the meeting with the adviser. We've lost about 6-7% of the value, while others have lost maybe 30% or more. It's in a fairly conservative fund, so I guess that's why. We'll just ride it out. As many have said, things always turn around. It wont be overnight, but it will start back up sooner or later.

 

[Ellie]

Cyn.

 

[mtnhomechick]

Quote:
Actually, I'm glad to hear that. How many points did the Dow slide since your first post here. I figured it's getting closer and closer to a bottom. I was hoping you wouldn't pull out at the bottom.

Someone said today that the market is " spring loaded" to go up. I hope it does for your sake and every one else who has lost money.

I had a strange thought the last two days as I watched the market girate every few minutes. It was soooo erratic. Just my thought..........Wonder if it's financial terrorism. Probably just me and my conspiritorial mind.

Does seem extra strange though.

Good Luck to you!