Personal Finance Questions and Answers for Young Professionals » Real Estate

Rental Property or Stock Market

pbucelwicz — Mon, 07 Jul 2008 13:15:47 +0000

My family owns a house worth about $400,000. The house will need a little work to fix up but then could be rented out for $1500-$2000 dollars a month. It’s a 3 bedroom house close to Harvard University, so I don’t think it would be a problem selling or renting the house out to students or grad students.

Here are my thoughts:

$18,000-$24,000 a year from renters.
A $400,000 home in a good market will appreciate at 3-4% – $12,000-$16,000
I was unable to find the property tax rate but I am guessing it’s about $3,000 a year.
This brings my estimate total to $27,000-$37,000 per year.

$350,000 invested at 8-10% a year gain would be $28,000 – $35,000.
$400,000 invested at 8-10% a year gain would be $32,000 – $40,000.

Given the current market situation, the real estate market, and how both markets can fluctuate, what do you think is a better long term investment? Any opinions are appreciated. Thanks.

Foreclosure to Buy or Not to Buy?

sergik12 — Tue, 26 Feb 2008 15:49:07 +0000

What do people think about buying a foreclosure? Is it a good idea to buy a foreclosed property? Are there any cons to buying a foreclosure? Where can I find some info on foreclosures?

I’m currently contemplating buying a house in the next year and one idea that comes to mind is purchasing a foreclosed property. I’m not really sure where to go to find the information or how the process works but to me it seems like a good idea. From what I have recently read foreclosures are up 57% in January compared to a level a year a go. With the economy in a downturn I don’t see why I wouldn’t want to take advantage of the abundance of foreclosed property currently on the market.
Any opinions on the subject?

Here is an article on the current foreclosure situation
http://money.cnn.com/2008/02/26/real_estate/foreclosures_rise_again/index.htm?postversion=2008022608