Originally Posted by crewdawg

There are plenty of great YouTube videos or articles that explain it better than I type out. WRT to buying investment properties, not all class of investment properties are created equal. A triplex may cash flow nicely while the SFH breaks even. Also remember that many of landlords bought at much better terms and thus their rent isn't as high. If you look at the data, many of the small-time landlords have rents well under market because they either don't know the market or are scared of a vacancy washing out their profits. Anyway, if your kids are looking to buy a house that they plan to spend less than 10-15 years, it's worth exploring both options.







I'm 100% with you on the long-term aspect, I just see too many people who listen to the old adage that buying is better and that's just not always true, especially in today’s market. Depending on who you believe, the average American moves every 8 to 13 years. In that case, which isn't so uncommon for airline pilots, it's not so cut and dry. WRT your properties that had solid returns, did you account for your mortgage interest paid to that point, real estate taxes, insurance, repairs, closing costs, inflation, etc...? On a 3-year hold your down payment money being in the market is admittedly small, but it's not nothing and something worth considering. Clearly this is a bigger factor the longer you stay.



I'm not saying this is you, but so many people just go, I bought it for $350k and sold it for $450k... I killed it! That's just not the whole story. Never mind that with inflation, $350k in 2021, is $421k in today’s dollars. With the interest rates of 2021 (assuming 2.5%), they spent $20k on interest, so they're back to break even. Now add taxes, insurance and repairs. This is best case with 2.5% interest, which we'll be lucky to ever see again. Let’s look at a more relevant example of today...



Since you brought up military, I went and looked in the neighborhoods that I've seen some of my AF buddies have lived in while based at Nellis. I found a nice 3bd/3ba house renting for $2300/month. A comparable house just down the street recently sold for $430k. A mortgage on that is about $2700/month (guessing low on re tax/insurance). With current interest rates, in a 3-year assignment, they'll have spent $70k, just in interest. That's a lot of appreciation to overcome and this doesn't factor in RE taxes, insurance, mx, closing costs on both ends, realtors, etc... The cost to rent over the same 3 years...$83k and your spouse didn't have to deal with that hot water heater failure as you boarded the charter plane, headed out on a deployment (true story lol). Is this an extreme scenario, maybe, but we're in really odd times in the housing markets. All I'm saying, is do the math.