Well, since I don't really have time to watch 100 minutes of video right now, could someone perhaps sum up the difference between Eastern and Western ghosts?
Actually, not that I actually want to spend time dissecting this, but her running scream from the tray of pickles stands in stark contrast to her job as a waitress in a restaurant that serves pickles. Although she claims to refuse serving pickles, she certainly can't avoid walking through the dining area without spotting one now and then, so how does she control her urge to run from the dining area in tears? If she's truly that terrified of pickles, knowing she's in the same room with one should be enough to cause her to quit her job. If she were my employee and I heard her tell a customer they didn't have pickles, she'd be fired. If her phobia interferes with her job and customer services, its out the door, I'm afraid.
Comparing a different city and country to where I'm at in the United States is definitely comparing apples and oranges. It might be very difficult to invest in real estate in central Ottawa. I wouldn't really know, as I'm not familiar with Ottawa. I happen to live in an area where real estate is a great investment opportunity (the US Midwest).
As for the risk of choosing tenants, there is a risk involved. In one sense, it is like gambling in the stock market. However, you'll lose far less on one bad tenant than you could lose in a few minutes on the stock exchange.
A bad tenant can be very emotional for a landlord, but the landlord needs to look at this as a business, not an emotional investment. My best friend lost over $40,000 on a poor stock market investment. That investment has still not recovered after almost 10 years and probably never will. He lost many nights sleep over this horrible experience and still beats himself up over it. Should he? Probably not, but then neither should a landlord who gets a bum tenant.
I do know that if this friend of mine had put his money into real estate in a safe, stable location, it would have grown quite a bit by now and probably for no more emotional trouble than he's already suffered.
It is much more difficult and admittedly stressful to manage a property that is geographically distant. I know people in New York and California who purchase rental properties in the Midwest and pay someone local to manage them. I don't see any reason why someone couldn't do that in Canada. How affordable are homes 30 minutes outside Ottawa? I honestly don't know, are they expensive or affordable?
I'm obviously horrendously biased, but the truth is, for all the people I know who've lost money in real estate, I know far more people who've done well. I seem to know far more people who lost money in the tech crash of the early century than who've lost money in real estate. The people who've had bad experiences in real estate definitely put it down to bad tenants, repairs and general hassle, but even though they got out of real estate, they didn't generally lose much money.
Also, the people I know who made their money in the stock market or as small business owners invariably tell me they would love to get into real estate. I have found that once people reach a certain level, they almost always want to get into real estate investing. Its strange, like joining the country club or something. Almost every millionaire I know owns some property somewhere.
Well, in all fairness, fimbulvetr, this post was about the housing bubble in the states, and you're talking about Canada, an entirely different situation. Our economies are linked, but our governments have different social and economic goals. In the states, homeownership is valued and promoted by the state to such an extent that we get all kinds of benefits that you may not get. In addition to the tax deduction for mortgage interest, we also get tax deferrals when changing houses and we don't have to pay capital gains taxes up to a certain amount for our primary residence. Also, although Canada has a much less dense population, it is centered in the cities, which will of course affect property values. Americans prefer to live in suburbs, where housing prices are much more affordable.
Remember in real estate - LOCATION, LOCATION, LOCATION.
Being a successful landlord takes research, work and trial-and-error. So does being a successful investor in the stock market. Unless you buy an index fund and let your money sit there for 30 years, you are going to have to keep a constant eye on your stock, read analyst reports and annual reports. To pick new stocks, you'll have to read lots of papers and periodicals and keep up to date on the latest market trends.
You can't just pick a house and expect to make lots of money off of it, just like you can't pick a stock at random and expect it to be a winner. If you put careful research into your real estate investment decision, make wise choices as a landlord and keep your investment in good condition, you will reap far greater benefits with much less risk than the stock market.
Both are truly legitimate and successful means for creating wealth. Having the stock market has allowed our economy to grow substantially by making capital easy to obtain for companies both large and small. We need the stock market, and we need people to invest in it.
For those who might be so inclined, however, real estate offers an amazing alternative. With real estate, you have a more direct control over what happens with your money. If you invest in your own neighborhood or nearby, you can keep a closer eye on your investment and might even have a better idea of the important market conditions which affect that investment than in a situation like the stock market, which is national, if not global.
How many investors put their money into high-risk global funds investing in 3rd world countries promising high returns on the advice of some financial advisor in another state? You put that level of trust into someone you've never met before. With real estate, you can put the money into your own back yard and keep a close eye on it and still achieve the same returns.
12% annual return is not at all difficult to achieve, its very, very easy. If you make an initial investment of $10,000 in a house, you only have to clear $1,200 that year between rent AND appreciation. At 3% appreciation, you'll have a return of 30% alone on the asset value, not including any rental income.
The other thing to bear in mind is that I've used a 10% down scenario. There are many lenders right now offering 100% financing on single family homes to investors. Yes, its true! If you put 3% down, which is $3,000, then in your first year at 3% appreciation (which is very conservative), you will have a 100% return on your initial investment!
Investing on margin is extremely risky. Again, if your investment loses value, you may not ever get it back and will have lost money you didn't have in the first place. If your home loses value in the short term, it will almost always gain it back in the long run, even if you do nothing.
It is quite easy to find a $100,000 home to rent for $700/month or its equivalent. Paradoxically enough, the highest cash flow neighborhoods are the poorest, which is where the stereotype of the slumlord comes from. Poor people don't have much choice in housing, and often pay as much to rent as people with good credit and jobs pay to own.
You might not find a $100,000 house to rent for $700/month, but you will easily find a $100,000 double where you can rent each side for $500/month for a total of $1,000/month. That is easily found in my city.
Margin accounts rarely let you get above 50% of your investment. The $10,000 initial investment would translate to a max of $15,000 with margin, not $20,000. In addition, margin accounts charge interest, eating into your returns, as well as no one is paying off the margin amount like a renter pays the mortgage.
Also, stocks tend to be much more volatile than real estate. In stocks, you can easily lose 100% of your investment. In real estate, it is very uncommon to lose value, particularly in the long term. If your tenant causes $5,000 in damage, you will make that money back in just a few years. If your stock tanks and the company gets de-listed, that money may be gone forever. Look at the people who invested in Enron...
There are expenses associated with rental property that I have not addressed up until now. They are generally quite manageable and range anywhere from 10%-25% depending on your management experience and the housing quality/neighborhood.
All of these expenses are tax-deductible, as well as the interest on the mortgage. With stocks, you do not get a tax-deduction, although you might get a deduction on the margin interest, but I am not certain how that works.
Lots of quite clever people have figured out ways to reduce expenses to zero. The latest fad is 'rent-to-own'. With rent-to-own, the tenant pays a premium rent for the right to buy the property. In addition, as the potential owner, the tenant agrees to assume all maintenance costs. Because the tenant feels a sense of ownership, they are more likely to take care of the property and to stay longer than a typical tenant. If they end up buying the property, that's just a bonus!
Yes, roryk, the rental income should cover the mortgage payments and also put additional income in your pocket. Some investors purposely lose money for tax writeoffs. In other cases, some investors might break even or have a negative cash flow for a longer term high return. With real estate, the biggest risk is in management. You have to be pro-active and know how to select and manage tenants. The rewards are very high, however.
For instance, building on my previous example, if you can rent out a $100,000 house for $700 each month and increase the rent every year by 3%, by the end of 30 years, you will be earning almost $20,000 each year in rental income, while your mortgage payments will still be less than $600 per month (assuming you don't refinance). After you pay off the mortgage entirely, you'll have a $20,000 annual income on a $10,000 investment, not including the asset value. Find me a mutual fund that can give you those kinds of returns.
The values I chose are quite conservative. If you are savvy enough, you can watch the values in the neighborhood and when they begin to slow down, trade the house in a 1031 exchange for a house in a neighborhood with more appreciation and avoid any taxes.
You are correct that it is not as common to purchase stock on the margin as it is to borrow against real estate. However, there really isn't such a thing as a real estate crash. There are areas which are subject to bubbles and these bubbles are fairly predictable. New York, San Francisco and Miami have all gone through real estate bubbles in the past and probably will again in the future. Notwithstanding, the majority of the country see property prices that are relatively stable compared to the stock market. In addition, if a person loses value on his house, he can simply remain in place and eventually it will gain its value back. With stocks, often times the stocks never recover or are delisted and the money is lost forever. In real estate, you don't lose money unless you sell.
To put it simply, stock market crashes have devastated the economy in the past, but real estate crashes have not.
It is kind of harsh, I think. It may be true, but does it really serve any purpose to make it into a news story? Aren't the only people who really need to know this the Indian condom makers?
I meant to add... over the course of 15-30 years, the value of a real estate investment can increase far more than the stock market.
For example, if you purchase a $100,000 home today with a $10,000 down payment and rent that home out, after 30 years at a 3% rate of appreciation, the home will be worth $235,000, or 23 times your original investment, in appreciation alone, not counting rental income.
If you put that same $10,000 into the stock market at an average long-term appreciation of 10%, it will only be worth $158,000 after 30 years.
Again, the real estate investment example does not include rental income, which can multiply the return even greater.
On preview, polychrome, people borrow money all of the time to purchase stocks - its called margin. Its what caused the great depression. That aside, losing money is losing money. Whether its borrowed money or money from other accounts, it's still lost.
I live in the midwest, and I can tell you prices here have not dropped. It is definitely a buyer's market right now, and prices may be 'softening', but there is not much negative equity.
With the exception of extreme markets like the coasts and perhaps the mountains, the housing market is far less volatile than the stock market. Even taking the extremes into consideration, if people lose 25% on the value of their home, that is far less than they might lose on the stock market in a day. In most communities throughout the US, home values are somewhere between stagnation and creeping upwards, with few communities losing value. Of course, the secret to making money in real estate isn't through primary residence ownership, but from borrowing money to purchase ownership and then getting someone else to pay off the debt (renters).
jccalhoun: "why is Adult Swim -- on the CARTOON network -- insisting on showing live action shows?"
I think that is like asking why MTV and VH1 don't show music videos any more. Times change, their names became anachronous.
In the case of Pee Wee Herman, I would think the logic to be along the following lines:
Traditionally, cartoons have been children's programs. Therefore, one might assume that the Cartoon Network was also a children's network. CN created Adult swim to provide cartoons that are directed towards an adult sense of humor. One might even say they are adult entertainment masquerading as children's entertainment. Well, I think everyone would agree that Pee Wee's playhouse started out as adult entertainment masquerading as children's entertainment, and from that logic it would fit into the Adult Swim category.
Actually, I LOVE fried chicken skin. Very unhealthy, but I could eat it all day. Now, the concept could be different from execution, of course. These fried chicken skins in a bag may indeed taste nasty, but I'd try them!
Shit like this makes me want to visit Japan. In 15 years, I expect to see the same gag with hello kitty robots instead of girls, hydrogen fuel packs instead of pork chops and an aibo robot dog instead of lizards.
fimbulvetr, I thought the same thing about other cultures' records and matching up with western events and chronologies. I mean, Europe wasn't that isolated, after all...
I own 4 of them. I'd own 5, but they don't make one that fits a crib yet.
posted by PigAlien 16 years ago
In "Hong Kong horror"
Well, since I don't really have time to watch 100 minutes of video right now, could someone perhaps sum up the difference between Eastern and Western ghosts?
posted by PigAlien 16 years ago
In "Maury Povich helps a guest overcome her fear of pickles."
Actually, not that I actually want to spend time dissecting this, but her running scream from the tray of pickles stands in stark contrast to her job as a waitress in a restaurant that serves pickles. Although she claims to refuse serving pickles, she certainly can't avoid walking through the dining area without spotting one now and then, so how does she control her urge to run from the dining area in tears? If she's truly that terrified of pickles, knowing she's in the same room with one should be enough to cause her to quit her job. If she were my employee and I heard her tell a customer they didn't have pickles, she'd be fired. If her phobia interferes with her job and customer services, its out the door, I'm afraid.
posted by PigAlien 17 years ago
Is it sad that I have to wonder if this is for real?
posted by PigAlien 17 years ago
In "What Statistics on Home Sales aren't telling us."
Comparing a different city and country to where I'm at in the United States is definitely comparing apples and oranges. It might be very difficult to invest in real estate in central Ottawa. I wouldn't really know, as I'm not familiar with Ottawa. I happen to live in an area where real estate is a great investment opportunity (the US Midwest). As for the risk of choosing tenants, there is a risk involved. In one sense, it is like gambling in the stock market. However, you'll lose far less on one bad tenant than you could lose in a few minutes on the stock exchange. A bad tenant can be very emotional for a landlord, but the landlord needs to look at this as a business, not an emotional investment. My best friend lost over $40,000 on a poor stock market investment. That investment has still not recovered after almost 10 years and probably never will. He lost many nights sleep over this horrible experience and still beats himself up over it. Should he? Probably not, but then neither should a landlord who gets a bum tenant. I do know that if this friend of mine had put his money into real estate in a safe, stable location, it would have grown quite a bit by now and probably for no more emotional trouble than he's already suffered. It is much more difficult and admittedly stressful to manage a property that is geographically distant. I know people in New York and California who purchase rental properties in the Midwest and pay someone local to manage them. I don't see any reason why someone couldn't do that in Canada. How affordable are homes 30 minutes outside Ottawa? I honestly don't know, are they expensive or affordable? I'm obviously horrendously biased, but the truth is, for all the people I know who've lost money in real estate, I know far more people who've done well. I seem to know far more people who lost money in the tech crash of the early century than who've lost money in real estate. The people who've had bad experiences in real estate definitely put it down to bad tenants, repairs and general hassle, but even though they got out of real estate, they didn't generally lose much money. Also, the people I know who made their money in the stock market or as small business owners invariably tell me they would love to get into real estate. I have found that once people reach a certain level, they almost always want to get into real estate investing. Its strange, like joining the country club or something. Almost every millionaire I know owns some property somewhere.
posted by PigAlien 17 years ago
Well, in all fairness, fimbulvetr, this post was about the housing bubble in the states, and you're talking about Canada, an entirely different situation. Our economies are linked, but our governments have different social and economic goals. In the states, homeownership is valued and promoted by the state to such an extent that we get all kinds of benefits that you may not get. In addition to the tax deduction for mortgage interest, we also get tax deferrals when changing houses and we don't have to pay capital gains taxes up to a certain amount for our primary residence. Also, although Canada has a much less dense population, it is centered in the cities, which will of course affect property values. Americans prefer to live in suburbs, where housing prices are much more affordable. Remember in real estate - LOCATION, LOCATION, LOCATION.
posted by PigAlien 17 years ago
Being a successful landlord takes research, work and trial-and-error. So does being a successful investor in the stock market. Unless you buy an index fund and let your money sit there for 30 years, you are going to have to keep a constant eye on your stock, read analyst reports and annual reports. To pick new stocks, you'll have to read lots of papers and periodicals and keep up to date on the latest market trends. You can't just pick a house and expect to make lots of money off of it, just like you can't pick a stock at random and expect it to be a winner. If you put careful research into your real estate investment decision, make wise choices as a landlord and keep your investment in good condition, you will reap far greater benefits with much less risk than the stock market. Both are truly legitimate and successful means for creating wealth. Having the stock market has allowed our economy to grow substantially by making capital easy to obtain for companies both large and small. We need the stock market, and we need people to invest in it. For those who might be so inclined, however, real estate offers an amazing alternative. With real estate, you have a more direct control over what happens with your money. If you invest in your own neighborhood or nearby, you can keep a closer eye on your investment and might even have a better idea of the important market conditions which affect that investment than in a situation like the stock market, which is national, if not global. How many investors put their money into high-risk global funds investing in 3rd world countries promising high returns on the advice of some financial advisor in another state? You put that level of trust into someone you've never met before. With real estate, you can put the money into your own back yard and keep a close eye on it and still achieve the same returns. 12% annual return is not at all difficult to achieve, its very, very easy. If you make an initial investment of $10,000 in a house, you only have to clear $1,200 that year between rent AND appreciation. At 3% appreciation, you'll have a return of 30% alone on the asset value, not including any rental income. The other thing to bear in mind is that I've used a 10% down scenario. There are many lenders right now offering 100% financing on single family homes to investors. Yes, its true! If you put 3% down, which is $3,000, then in your first year at 3% appreciation (which is very conservative), you will have a 100% return on your initial investment! Investing on margin is extremely risky. Again, if your investment loses value, you may not ever get it back and will have lost money you didn't have in the first place. If your home loses value in the short term, it will almost always gain it back in the long run, even if you do nothing.
posted by PigAlien 17 years ago
It is quite easy to find a $100,000 home to rent for $700/month or its equivalent. Paradoxically enough, the highest cash flow neighborhoods are the poorest, which is where the stereotype of the slumlord comes from. Poor people don't have much choice in housing, and often pay as much to rent as people with good credit and jobs pay to own. You might not find a $100,000 house to rent for $700/month, but you will easily find a $100,000 double where you can rent each side for $500/month for a total of $1,000/month. That is easily found in my city. Margin accounts rarely let you get above 50% of your investment. The $10,000 initial investment would translate to a max of $15,000 with margin, not $20,000. In addition, margin accounts charge interest, eating into your returns, as well as no one is paying off the margin amount like a renter pays the mortgage. Also, stocks tend to be much more volatile than real estate. In stocks, you can easily lose 100% of your investment. In real estate, it is very uncommon to lose value, particularly in the long term. If your tenant causes $5,000 in damage, you will make that money back in just a few years. If your stock tanks and the company gets de-listed, that money may be gone forever. Look at the people who invested in Enron... There are expenses associated with rental property that I have not addressed up until now. They are generally quite manageable and range anywhere from 10%-25% depending on your management experience and the housing quality/neighborhood. All of these expenses are tax-deductible, as well as the interest on the mortgage. With stocks, you do not get a tax-deduction, although you might get a deduction on the margin interest, but I am not certain how that works. Lots of quite clever people have figured out ways to reduce expenses to zero. The latest fad is 'rent-to-own'. With rent-to-own, the tenant pays a premium rent for the right to buy the property. In addition, as the potential owner, the tenant agrees to assume all maintenance costs. Because the tenant feels a sense of ownership, they are more likely to take care of the property and to stay longer than a typical tenant. If they end up buying the property, that's just a bonus!
posted by PigAlien 17 years ago
Yes, roryk, the rental income should cover the mortgage payments and also put additional income in your pocket. Some investors purposely lose money for tax writeoffs. In other cases, some investors might break even or have a negative cash flow for a longer term high return. With real estate, the biggest risk is in management. You have to be pro-active and know how to select and manage tenants. The rewards are very high, however. For instance, building on my previous example, if you can rent out a $100,000 house for $700 each month and increase the rent every year by 3%, by the end of 30 years, you will be earning almost $20,000 each year in rental income, while your mortgage payments will still be less than $600 per month (assuming you don't refinance). After you pay off the mortgage entirely, you'll have a $20,000 annual income on a $10,000 investment, not including the asset value. Find me a mutual fund that can give you those kinds of returns. The values I chose are quite conservative. If you are savvy enough, you can watch the values in the neighborhood and when they begin to slow down, trade the house in a 1031 exchange for a house in a neighborhood with more appreciation and avoid any taxes.
posted by PigAlien 17 years ago
You are correct that it is not as common to purchase stock on the margin as it is to borrow against real estate. However, there really isn't such a thing as a real estate crash. There are areas which are subject to bubbles and these bubbles are fairly predictable. New York, San Francisco and Miami have all gone through real estate bubbles in the past and probably will again in the future. Notwithstanding, the majority of the country see property prices that are relatively stable compared to the stock market. In addition, if a person loses value on his house, he can simply remain in place and eventually it will gain its value back. With stocks, often times the stocks never recover or are delisted and the money is lost forever. In real estate, you don't lose money unless you sell. To put it simply, stock market crashes have devastated the economy in the past, but real estate crashes have not.
posted by PigAlien 17 years ago
In "BBC sez Indian men have tiny dicks."
It is kind of harsh, I think. It may be true, but does it really serve any purpose to make it into a news story? Aren't the only people who really need to know this the Indian condom makers?
posted by PigAlien 17 years ago
In "What Statistics on Home Sales aren't telling us."
I meant to add... over the course of 15-30 years, the value of a real estate investment can increase far more than the stock market. For example, if you purchase a $100,000 home today with a $10,000 down payment and rent that home out, after 30 years at a 3% rate of appreciation, the home will be worth $235,000, or 23 times your original investment, in appreciation alone, not counting rental income. If you put that same $10,000 into the stock market at an average long-term appreciation of 10%, it will only be worth $158,000 after 30 years. Again, the real estate investment example does not include rental income, which can multiply the return even greater. On preview, polychrome, people borrow money all of the time to purchase stocks - its called margin. Its what caused the great depression. That aside, losing money is losing money. Whether its borrowed money or money from other accounts, it's still lost. I live in the midwest, and I can tell you prices here have not dropped. It is definitely a buyer's market right now, and prices may be 'softening', but there is not much negative equity.
posted by PigAlien 17 years ago
With the exception of extreme markets like the coasts and perhaps the mountains, the housing market is far less volatile than the stock market. Even taking the extremes into consideration, if people lose 25% on the value of their home, that is far less than they might lose on the stock market in a day. In most communities throughout the US, home values are somewhere between stagnation and creeping upwards, with few communities losing value. Of course, the secret to making money in real estate isn't through primary residence ownership, but from borrowing money to purchase ownership and then getting someone else to pay off the debt (renters).
posted by PigAlien 17 years ago
In "Stevie Wonder's live 1973 performance of "Superstition". "
I LOVE AFFILIATE SPAM! 1) Snag Video From YouTube 2) Amazon Ads to same product 3) ??? 4) Profit!
posted by PigAlien 17 years ago
In "Hooray, Pee Wee's Back!"
jccalhoun: "why is Adult Swim -- on the CARTOON network -- insisting on showing live action shows?" I think that is like asking why MTV and VH1 don't show music videos any more. Times change, their names became anachronous. In the case of Pee Wee Herman, I would think the logic to be along the following lines: Traditionally, cartoons have been children's programs. Therefore, one might assume that the Cartoon Network was also a children's network. CN created Adult swim to provide cartoons that are directed towards an adult sense of humor. One might even say they are adult entertainment masquerading as children's entertainment. Well, I think everyone would agree that Pee Wee's playhouse started out as adult entertainment masquerading as children's entertainment, and from that logic it would fit into the Adult Swim category.
posted by PigAlien 17 years ago
In ""Putting a chicken skin in a bag might not be such a good idea""
I love yakitori and yakisoba and yakiuna and yakimaki and yakiyaki and yaki...
posted by PigAlien 18 years ago
Actually, I LOVE fried chicken skin. Very unhealthy, but I could eat it all day. Now, the concept could be different from execution, of course. These fried chicken skins in a bag may indeed taste nasty, but I'd try them!
posted by PigAlien 18 years ago
In "Hello monkeyfilter we are meeting up in London and we would like you to come too please."
Damn you! I was just in London during December for two weeks! That would have been so fun. Oh well, maybe next time...
posted by PigAlien 18 years ago
In "This Just In: "
Shit like this makes me want to visit Japan. In 15 years, I expect to see the same gag with hello kitty robots instead of girls, hydrogen fuel packs instead of pork chops and an aibo robot dog instead of lizards.
posted by PigAlien 18 years ago
In "The Phantom Time Hypothesis"
fimbulvetr, I thought the same thing about other cultures' records and matching up with western events and chronologies. I mean, Europe wasn't that isolated, after all...
posted by PigAlien 18 years ago
(limited to the most recent 20 comments)