Buy of course! As I wrote to you in Parts I, and II the key for you is to be creative and get started: Make the jump from a life of paying “The Man” to one where you pay yourself. A simple concept, yet hard to do. What did I do when I was your age? I made the monumental change in my own mindset—I became determined to pay myself. I bought a multi-family, rented the top two floors and lived on the first with two co-workers from Fidelity Investments. I want you to buy a multi-family type property. It can be a two-family, four-family, you can live in the basement of a brownstone. It … [Read more...]
Working Millennials: Rent or Buy Real Estate? Part II
In Part I told you how I got into real estate and I haven’t looked back since. How can you, a young Millennial, get started? Get creative! Figure out a way to come up with a down payment. I did. I borrowed from my dad. But what if that isn’t an option for you? Well, keep moving forward. Get creative. The best way I have found to be creative is to speak directly with the decision maker. It’s the best way to find out the real story. During my search for a multi-family property in Marlborough, MA I scoured the classified ads with a red pen. I came across an intriguing listing 40 minutes … [Read more...]
Working Millennials: Rent or Buy Real Estate?
When you’re a working Millennial, your weekends are extra valuable: Everybody’s working for the weekend. When I was the age of today’s Millennial I worked at Fidelity Investments and lived in Watertown, MA. Rent was a big chunk of my paycheck but that’s what it cost to be so close to Boston. I wasn’t saving much money. Then there was a change. My department was moved out to Marlborough, MA—40 minutes west of Boston. For a while I did the reverse commute from Boston to Marlborough. But that got old fast. I wanted to live where I worked and I was also tired of paying someone else … [Read more...]
The Monday Melee: Home Sales Sputter
New Home Sales Slide Again For the third month in a row sales of new homes have fallen. The AP reports: "New-home sales slipped 1.5 percent last month to a seasonally adjusted annual rate of 511,000, the Commerce Department said Monday. That rate has steadily dropped from 519,000 in February and 521,000 in January. Sales plummeted 23.6 percent in the West, which has been prone to volatile swings in sales as one of the nation's priciest housing markets." Slump in Home Buying Hits the West Hardest U.S. and Canada have Some of the Costliest Housing in the World MAP: Seriously … [Read more...]
Millennials Moving to the Burbs
The best investment I ever made in my early 20s was buying a multi-family in Marlborough, MA when I was working out there at Fidelity Investments. I like this trend for Millennials. I have always believed that owning your home is the best investment you can make when you’re young. Here the Globe's Prashant Gopal explains that young millennials are fleeing the higher priced cities to buy in the suburbs: Cities may be the top choice for millennials who rent apartments, but young home buyers are moving in droves to the suburbs, where prices are lower and backyards are plentiful. The share … [Read more...]
Vanguard GNMA Outlook 2016
With the Fed hiking short-term interest rates for the first time in almost a decade in December, and signaling to investors that additional interest rate hikes are going to come at a gradual pace, the fixed-income landscape has the potential to change profoundly over coming months, quarters, and years. Is your portfolio prepared for such a change? If you have been reaching for yield in long maturity bonds or low-quality securities, because let’s face it, the Fed has deprived Americans of yield for far too long, now is the time to reexamine your fixed-income portfolio. If interest … [Read more...]
The Big Short Movie
You may have heard Michael Lewis’ book The Big Short, about the real estate crash in 2008, is now a movie. Apparently you can skip it. “Longtime Will Ferrell collaborator, former ‘SNL’ head writer and director Adam McKay, whose work usually isn’t even on the smart end of the comedy spectrum, co-wrote and directed ‘The Big Short,’ an inept and frequently idiotic take on Michael Lewis’ deeply engaging book, and it will largely be remembered for three things: bad haircuts, overacting and Margot Robbie in a bubble bath. . . .” writes Kyle Smith in the New York Post. Here’s what I wrote about … [Read more...]
The $2 million Apartment
Bloomberg reports that Manhattan apartment prices hit a record in the second quarter. The average sale price of a Manhattan apartment is a staggering $1.87 million. The average price of a luxury apartment is $8.18 million—a 13% increase over last year. Almost $2 million bucks for 1,200 square feet of living space—that’s more than 28X the median household income in Manhattan. Obviously the median household in Manhattan isn’t an apartment owner. Even for the folk who can scratch together a cool $375,000 for a 20% down payment, the monthly mortgage payment on the median Manhattan apartment is … [Read more...]
Cyclical Economic Dysfunction a Brewing Storm?
Two major cyclical indicators, construction (as pictured by housing starts and permits in the first chart below) and industrial production (chart 2 below) are giving very different signals about the direction of the U.S. economy. What is the reality? Numbers of housing starts and permits are climbing rapidly to levels not seen since before the housing bust. Meanwhile industrial production reports indicate flagging demand. The question is, which indicator is the better picture of reality. In any case, caution is the best approach for investors like you and me. … [Read more...]
Mosquito Apartments
Anyone see a problem here? In Hong Kong apartments the size of a parking spot are selling for $516,000 reports the WSJ. The apartment, in a development called High Place, isn’t much bigger than the standard U.S. parking space. It went into contract in May for almost four million Hong Kong dollars (US$516,000.) Even by Hong Kong’s cramped standards, apartments here are getting tinier and tinier. So small are some of the new developments in Hong Kong that they have been given the moniker “mosquito-sized units.” … [Read more...]
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