Author Topic: Investing Opinions Advice Please  (Read 418 times)

AlanAbroad

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Investing Opinions Advice Please
« on: June 02, 2018, 01:34:51 PM »
Hello everyone,

I'll try to keep this short but would really appreciate some advice on how to best invest going forward.

I am mid 40's earning 6 figures (no taxes as overseas) and expect to be able to do so for the next 3-5 years. I can save/invest 50-60% of that per year. After that, I can continue to invest but likely lesser amounts. In addition, I have $100k USD on hand to invest right now.

On one hand,

(a) I would like to put the existing money I have and everything that I can save after that (above) directly into low cost ETFs (balanced at 60% stocks/40% bonds) located in brokerage in a low/no tax country. I already have experience with that, so it would just be a continuation of what I am already doing.

It's too easy, almost no stress, and suits my lifestyle (i.e. I work, get paid cash, and invest without (on my side at least) paying tax.

On the other hand,

(b) I am drawn to real estate and now have the opportunity to finally get mortgages and leverage my money. The mortgages would be 20-30% down and 3.5-7%.

If I went this route, I would want to get a number of places, rent them out to pay down mortgages, and then, if able, refinance+ put in additional monies and build a small portfolio. I would pay local property managers and "manage" them that way after.

I can get financing in the UAE  and Asia (Indonesia/Malaysia/Philippines) or I can go cash (and then maybe later financing) in the USA and/or UK. Depending on opportunities, maybe I could do a combination of those things.

My end goal is a relatively minimalist and low stress lifestyle in Malaysia or Bali within the next 5 years or so. I would work, but not as much as now...and would also have the time to manage any investments. Being that part of Asia has super cheap flights, I could also visit any properties I had in that region and certainly enjoy the trips as well.

As further information, realistically, I don't think I'd need to draw on any of the money for the next 15 years at least and don't like to jump in and out of investments.

Oh, and why am I pondering this so much right now? Basically, I've only just entered into a new phase where I actually have some cash on hand, a decent salary, and the opportunity to finance...so I need to decide best course with the new situation/outlook.

Sorry for the novel and thanks in advance to anyone who replies.

waltworks

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Re: Investing Opinions Advice Please
« Reply #1 on: June 03, 2018, 02:31:26 PM »
Just stay the course with the stocks and bonds. RE is great, but it's not hands-off enough for the lifestyle you want.

-W

AlanAbroad

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Re: Investing Opinions Advice Please
« Reply #2 on: June 03, 2018, 09:16:48 PM »
Just stay the course with the stocks and bonds. RE is great, but it's not hands-off enough for the lifestyle you want.

-W

Thanks for input, W.

Maybe I can consider investment as I come to the "rent or buy" point naturally and not seek out real estate as a primary vehicle for investing.

For example,  I will soon have a choice whether to rent or buy in the UAE. I can buy a nice one bedroom seaview condo for $270,000 USD with 25% down payment at approx. 3.5% interest rate. Annual rent for the same unit is $ 1,650 USD a month. Buying has the added benefit of giving myself and family safety and security from intrusive or scamming landlords, rent hikes, vacate notices, etc.

What would your opinion be on this situation?

AlanAbroad

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Re: Investing Opinions Advice Please
« Reply #3 on: June 03, 2018, 09:18:50 PM »
Just stay the course with the stocks and bonds. RE is great, but it's not hands-off enough for the lifestyle you want.

-W
+1

Keep in mind that seemingly bullet proof RE deals can also go south, as can "management deals."  They tend to earn more because they carry more risk, even if insured and seem great. 

Within 5 years we've experienced the following in RE: doubled our investment, lost 100% of our investment, made a modest return with big profits going to manager (due to some shifty accountng).  RE is a part time job that can pay well.

Wow, thanks- very illuminating. Those experiences give me even more to consider.

waltworks

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Re: Investing Opinions Advice Please
« Reply #4 on: June 04, 2018, 08:55:35 AM »
For example,  I will soon have a choice whether to rent or buy in the UAE. I can buy a nice one bedroom seaview condo for $270,000 USD with 25% down payment at approx. 3.5% interest rate. Annual rent for the same unit is $ 1,650 USD a month. Buying has the added benefit of giving myself and family safety and security from intrusive or scamming landlords, rent hikes, vacate notices, etc.

What would your opinion be on this situation?

Go run the NYT rent vs. buy calculator. In your situation a lot will depend on overhead costs to buy and then sell, and on how long you plan to stay in the place. Over short periods of time, you'll do poorly simply because of the transaction costs, barring a massive boom in RE prices. Over the longer term the question becomes much more subtle and involves a lot of assumptions about RE appreciation, rent appreciation, taxes (both on the property and your income), etc.

I would rent at that price and given your goals, but that's just me.

As an aside, your family wants to live in a 1 bed condo?

-W

AlanAbroad

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Re: Investing Opinions Advice Please
« Reply #5 on: June 04, 2018, 10:41:41 AM »
For example,  I will soon have a choice whether to rent or buy in the UAE. I can buy a nice one bedroom seaview condo for $270,000 USD with 25% down payment at approx. 3.5% interest rate. Annual rent for the same unit is $ 1,650 USD a month. Buying has the added benefit of giving myself and family safety and security from intrusive or scamming landlords, rent hikes, vacate notices, etc.

What would your opinion be on this situation?

Go run the NYT rent vs. buy calculator. In your situation a lot will depend on overhead costs to buy and then sell, and on how long you plan to stay in the place. Over short periods of time, you'll do poorly simply because of the transaction costs, barring a massive boom in RE prices. Over the longer term the question becomes much more subtle and involves a lot of assumptions about RE appreciation, rent appreciation, taxes (both on the property and your income), etc.

When I get more information, I will run the calculations through the NYT rent vs. by calculator and see what it says. Regarding the subtle aspect of the buy vs. rent proposition is the fact that I would be in the rare situation of being able to get financing...so it "feels" more appealing to me.

Quote
As an aside, your family wants to live in a 1 bed condo?

-W

It is just the two of us for now, so I think it would be fine. We have both done many years in Asia (10+) and probably have a reduced idea of how much space is sufficient. When I visit the West, I am blown away by the size of most people's houses, yards, vehicles, etc.

I'd also like to make the type of good investment that, if I decided that it was too small down the road, I could just rent it out and rent another place more to my linking. Same as I'd only consider buying if I could rent it out and keep it as a revenue property after leaving the country.