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16 Jan

Everyone’s Prodding me to Buy (or Sell)… Who’s Right?

Posted January 16th, 2008 | View Comments

One of the most irritating things about real estate is that everyone has an opinion about it! I noticed that the minute we bought our rental property and moved out of our house. And irritating as that might be, it’s usually a good idea to pay attention to the things you hear around you.

As long as you do your own research. And don’t heed them (the comments of people around you) too much.

As anecdotal evidence, when my husband bought a HUD owned home in late 2000, his friends thought he was nuts. But the math worked – he actually paid less in mortgage costs than he did where he was renting. It was a complete no-brainer.

And here we are, sitting on a nice 2 bedroom rental that will continue to build equity over the next 30 years.

I have had various clients make decisions (toward buying or selling) because “someone told me to do so.” I would say, for one thing, check your sources. If the person telling you to buy is one that always chases a “hot tip” and then doesn’t get anywhere, you should not listen to the person. If on the other hand, he happens to be your mentor and successful, by all means, take his advice.

But claim complete responsibility for your decision. After all, it’s your name on the dotted line.

  • http://exurbannation.blogspot.com Robert Coté

    Purva,
    And here we are, sitting on a nice 2 bedroom rental that will continue to build equity over the next 30 years.
    Should read:
    And here we are, sitting on a nice 2 bedroom rental that should continue to build equity over the next 30 years.

    We all have to be careful about guaranteeing absolute returns (or losses). Still you are correct. We are starting to see some of the first “no brainers” and far sooner than I expected in this cycle.

  • http://www.sacramentorealestategal.com Purva Brown

    Robert,

    You might be right, but I’ve never been one for politically correct speech or legalese. Obviously, this is my opinion and should be taken as such.

    As for the next 30 years on that rental, I don’t see prices falling below $55,000 for a 2 bedroom 1 bath home in Sacramento. Do you?

  • http://exurbannation.blogspot.com Robert Coté

    Okay. My 2¢. I think it is massively stupid to even have to engage in these word games. I know what you mean and I certainly won’t sue you if these investments don’t accrue equity. I understood that and you aren’t stupid either and you were just strongly expressing an opinion. I mildly disagree with that opinion but that isn’t the point. This is a world of unreasonable people. They will “take offense” and claim you are doing something wrong by using the wrong words. You don’t like it. I don’t like it either.

    As to Sacto in the near future. Tough question. There will be pain and opportunity. $55k 2/1s would be cash positive at 50% occupancy and assuming near every worst case cost scenario. That’s why I said I was pleasantly surprised at how soon similar opportunities are showing up.

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