Posted by Jason (SC) on September 23, 2004 at 17:17:26:
I could not go to the link but I would like to say that I do not think any well educated investment can be considered speculating. If your investment is made from an educated point of view and you have enough information, you should know what not to buy and what not to pay for a piece of property.
I do think there are a lot of uneducated people out thier thinking Real Estate is going to make them a millionair and they run out and pay over market value for a piece of property that they may never get thier money out of and will never pay for itself. I am a Real estate agent I see this all the time.
I read this article (www washingtonpost com/wp-dyn/articles/A24781-2004Sep15.html) in the personal finance section of the Washington Post. Normally, I think this writer’s column is a great contribution. However, I was disappointed in the advice offered about using the equity one has in their personal residence as a springboard into real estate investing. At one point, one of the experts the writer sites compares buying vacation property to real estate speculating!
My opinion of the linked article is that if the person who is seeking advice takes the time to learn a little about real estate investing and has a substantial amount of equity built up in his primary residence, then buying a vacation property as an investment can be extremely lucrative, as many real estate investors have shown.
I’d appreciate hearing y’all’s reaction to this article. Maybe you could even send the writer some emails with your thoughts.
your link does not work, but REI does ! - Posted by David Krulac
Posted by David Krulac on September 24, 2004 at 06:25:13:
1.using your home equity to do real estate investing IS RISKY, and people have lost their homes that way. Have I done it, absolutely yes.
Vacation properties are very risky.I’ll presume that you are in the DC area. The popular near by Ocean City Md. is a prime vacation detination example.
a. the seaon is a short 12 weeks from Memorial Day to Labor Day. You either make it or break it in those 12 weeks, the other 40 weeks are fluff.
b. prices have tripled in the last 5 years. If you bought 5 years ago you are golden. If you bought before that you’re platinum. somebody I know bought a place in OC in 1955 on the water for $5,000, $100 down and $100 a month.
There are better real estate investments than vacation properties. If you objectively look at the forest instead of the trees, you’ll see that purchasing undervalued property near your home can be a great investment whether you buy and hold or flip.
c. from 1986, when the tax law changed until 1999 when the stock market deflated, prices in OC were just about flat. You could have bought a property kept it for 10 years and sell for the same you paid.
Not a real good investment.