Author Topic: 2016 - where to put one's savings if ready to start real estate investing?  (Read 2169 times)

bliss88

  • 5 O'Clock Shadow
  • *
  • Posts: 11
Greetings. Seems housing prices are leveling out across the nation, and maybe 2016/2017 will see a dip in our economy + housing prices? What do you all think about this?

I have $70K I'd like to start investing in $65-80K real estate unit(s) for long-term rental income cash flow with appreciation being a bonus. I still rent, age 38, SF Bay Area. Finally woken up to the income potential of owning rental property and I've given up on buying something in Bay Area (at least, not until another 2008-like crash).

Would greatly appreciate advice... do I wait for that market dip that I think is probably coming 2016/2017? Keep my cash in my savings account (earning 0.9% via alliant credit union)?

I also have $40K in stock brokerage (wealthfront), $50K in ROTH, $60K in traditional IRA... wondering if I should move the retirement funds into bonds?

Thank you!!!

Jim2001

  • Stubble
  • **
  • Posts: 203
  • Location: Los Angeles, CA
Take a look at the thread "Evaluating a Rental Property".  The author has posted an excellent method for evaluating properties.

nobodyspecial

  • Handlebar Stache
  • *****
  • Posts: 1468
  • Location: Land above the land of the free
In an efficient market, could you do better buying a property rather than a REIT?

« Last Edit: January 02, 2016, 07:54:03 PM by nobodyspecial »

Another Reader

  • Walrus Stache
  • *******
  • Posts: 5216
I have been in the real estate world for over 30 years, and I don't make predictions about real estate markets beyond a few months.  No one knows when a market drop is coming, how much the drop will be or how long the market will be depressed.  The real estate market is tied to employment and the business cycle, which are still strong in most areas of the country.  Signs of rising unemployment, falling stock prices, and rising interest rates generally favor weaker real estate sales.  So far, only interest rates have moved, and mortgage rates are still quite low. 

The key is to find the market in which you want to invest and set your buying criteria.  You might luck out and find a willing seller in a strong market, or you may have to wait for the market to shift.  If you think you will find a property that meets your buying criteria in the next year, leave the money in cash.  You may want to use some low risk longer term instruments, such as CD's, if your window is 12 to 24 months.  Beyond that, I would take a little more risk, and adjust as time passes and markets change.

Mighty-Dollar

  • Bristles
  • ***
  • Posts: 412
Vanguard's REIT index fund VNQ