John T. Reed’s news blog

The dominant way of thinking about real estate investing on the Reddit real estate investing subgroup is collecting duplexes and triplexes. The purpose is increasing your net worth. Some want to live solely off property cash flow, but that takes millions of equity, so it’s really just another way to say you are trying to increase your net worth. I used to think that. I was wrong. The correct way to achieve that goal is to buy your principal residence that you occupy as your home. When you can afford to buy a 20% or more valuable home, sell the first one and buy the...

If you buy a principal residence—a home that you live in—you are limited by your income and down payment money. Those two decide the price home you can afford. Can you buy a higher-priced duplex where you live in one and rent the other out? In other words, does the rent you get on the other unit give you greater income so you can qualify for a higher-priced duplex than the home you bought without a tenant. Let’s not forget that you need more down payment money to buy the higher-priced duplex. If you put that more down payment money on...

There is a general belief that you can build net worth faster by investing in rental properties (apartments) than by simply buying your home and moving up to a more expensive one when your financial situation improves. Is that correct? Maybe not. It is a multifaceted matter involving risk and reward as well as lifestyle. Risk All investments have risks. It is a finite list.  Risk Home Rental property overbuilding yes, generally visible nine months to a year in advance via permits approved and housing starts stats same as home casualty (fire, flood) covered by homeowners insurance covered by rental...

I recommend a principal residence as the only real estate investment you’ll ever need for net worth-increasing purposes. One reader says that should not be discussed on the Reddit subgroup titled “real estate investing.” . Reddit readers get both “real estate” and “real estate investing” when they choose “real estate investing” I always go to the “real estate investing” subgroup, but often find as I scroll down that I am also in the “real estate” subgroup. No big deal. There is much overlap between the two and the Reddit people are the ones who have decided that if you select...

Are you better off in the long-run buying rental property or one-at-a-time, more and more expensive principal residences? Start with the list of tenant-only hassles, namely time consumption of managing rental properties. Home owners who live in the home do not have to advertise, show the property, collect rents, evict anyone, and about 1,000 other hassles. They also do not have to pay the incremental costs caused by tenants—higher utilities, higher insurance, higher property taxes because landlords are not feared by assessors as voters the way homeowners are, higher maintenance costs, higher wear-and-tear costs Mandatory resident managers after a certain size level. I could go on. Then there are the taxes. Receiving rent is a taxable event. Not having to pay a...