Let’s be real, if rates are cut significantly housing will do another +20-30%

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It’ll depend who is selling. People who sell once rates drop probably fall into 2 camps: 1- upgrading from their first home, need more space and 2- downsizing for retirement

I feel like it’ll cancel out. People are sooo used to their low monthlies right now, and theyre not going to be itching to more than double which i think is the problem for camp 1 now

A lot of people are not going to give up their low mortgage rates even if they buy another house. A high proportion of these properties with sub 3% mortgage rates can be rented out with positive cash flow. It’s also doubtful that we will see rates this low within the next few decades. If we are lucky maybe rates can go slightly under 5%, but I don’t see sub 4% rates happening again anytime soon.

We view our home in McLean Hamlet with a 2% now as part of our retirement plan for cash flow. Our mortgage is less than $3K per month. With taxes and insurance it is $4.6K per month. Could rent it for $6K.

The schools are excellent and when our youngest graduates from high school, we will move to a low cost area and pay cash. But not planning to sell the house in McLean! It would be stupid to sell it and lose the passive income.

+1. It will soon be like old cities where you can never buy property, because all the property is held in families for generations.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It’ll depend who is selling. People who sell once rates drop probably fall into 2 camps: 1- upgrading from their first home, need more space and 2- downsizing for retirement

I feel like it’ll cancel out. People are sooo used to their low monthlies right now, and theyre not going to be itching to more than double which i think is the problem for camp 1 now

A lot of people are not going to give up their low mortgage rates even if they buy another house. A high proportion of these properties with sub 3% mortgage rates can be rented out with positive cash flow. It’s also doubtful that we will see rates this low within the next few decades. If we are lucky maybe rates can go slightly under 5%, but I don’t see sub 4% rates happening again anytime soon.

We view our home in McLean Hamlet with a 2% now as part of our retirement plan for cash flow. Our mortgage is less than $3K per month. With taxes and insurance it is $4.6K per month. Could rent it for $6K.

The schools are excellent and when our youngest graduates from high school, we will move to a low cost area and pay cash. But not planning to sell the house in McLean! It would be stupid to sell it and lose the passive income.

If you sold it and put the proceeds in a money market fund earning 5.5% per year, how much would you make per year?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It’ll depend who is selling. People who sell once rates drop probably fall into 2 camps: 1- upgrading from their first home, need more space and 2- downsizing for retirement

I feel like it’ll cancel out. People are sooo used to their low monthlies right now, and theyre not going to be itching to more than double which i think is the problem for camp 1 now

A lot of people are not going to give up their low mortgage rates even if they buy another house. A high proportion of these properties with sub 3% mortgage rates can be rented out with positive cash flow. It’s also doubtful that we will see rates this low within the next few decades. If we are lucky maybe rates can go slightly under 5%, but I don’t see sub 4% rates happening again anytime soon.

We view our home in McLean Hamlet with a 2% now as part of our retirement plan for cash flow. Our mortgage is less than $3K per month. With taxes and insurance it is $4.6K per month. Could rent it for $6K.

The schools are excellent and when our youngest graduates from high school, we will move to a low cost area and pay cash. But not planning to sell the house in McLean! It would be stupid to sell it and lose the passive income.

If you sold it and put the proceeds in a money market fund earning 5.5% per year, how much would you make per year?

Money market fund rates are variable. I doubt they will stay at the current levels long enough to make this a good trade off. The 10 year inflation expectations for the market is only 2.34% rn, so I wouldn’t make a decision with the expectation that you will get 5%+ interest rates on MM for years.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It’ll depend who is selling. People who sell once rates drop probably fall into 2 camps: 1- upgrading from their first home, need more space and 2- downsizing for retirement

I feel like it’ll cancel out. People are sooo used to their low monthlies right now, and theyre not going to be itching to more than double which i think is the problem for camp 1 now

A lot of people are not going to give up their low mortgage rates even if they buy another house. A high proportion of these properties with sub 3% mortgage rates can be rented out with positive cash flow. It’s also doubtful that we will see rates this low within the next few decades. If we are lucky maybe rates can go slightly under 5%, but I don’t see sub 4% rates happening again anytime soon.

We view our home in McLean Hamlet with a 2% now as part of our retirement plan for cash flow. Our mortgage is less than $3K per month. With taxes and insurance it is $4.6K per month. Could rent it for $6K.

The schools are excellent and when our youngest graduates from high school, we will move to a low cost area and pay cash. But not planning to sell the house in McLean! It would be stupid to sell it and lose the passive income.

Person with the house in McLean: make sure to keep meticulous records of receipts for home improvements. You will be able to increase the depreciation collected once you start renting it out.

[Anonymous]

Anonymous wrote:Let's be real -- no one is predicting that rates are going to be cut significantly, so this thread is pointless.

I think there is a chance that rates get noticeably cut during the next six months, then they will head up horribly for many, many years to come.

[Anonymous]

Yeah, just like the prices went down when interest rates went up.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It’ll depend who is selling. People who sell once rates drop probably fall into 2 camps: 1- upgrading from their first home, need more space and 2- downsizing for retirement

I feel like it’ll cancel out. People are sooo used to their low monthlies right now, and theyre not going to be itching to more than double which i think is the problem for camp 1 now

A lot of people are not going to give up their low mortgage rates even if they buy another house. A high proportion of these properties with sub 3% mortgage rates can be rented out with positive cash flow. It’s also doubtful that we will see rates this low within the next few decades. If we are lucky maybe rates can go slightly under 5%, but I don’t see sub 4% rates happening again anytime soon.

We view our home in McLean Hamlet with a 2% now as part of our retirement plan for cash flow. Our mortgage is less than $3K per month. With taxes and insurance it is $4.6K per month. Could rent it for $6K.

The schools are excellent and when our youngest graduates from high school, we will move to a low cost area and pay cash. But not planning to sell the house in McLean! It would be stupid to sell it and lose the passive income.

If you sold it and put the proceeds in a money market fund earning 5.5% per year, how much would you make per year?

+1 It's amazing to me how many people don't crunch the numbers to see what would yield the best return, especially once you factor in maintenance costs, vacant months, your time, etc.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It’ll depend who is selling. People who sell once rates drop probably fall into 2 camps: 1- upgrading from their first home, need more space and 2- downsizing for retirement

I feel like it’ll cancel out. People are sooo used to their low monthlies right now, and theyre not going to be itching to more than double which i think is the problem for camp 1 now

A lot of people are not going to give up their low mortgage rates even if they buy another house. A high proportion of these properties with sub 3% mortgage rates can be rented out with positive cash flow. It’s also doubtful that we will see rates this low within the next few decades. If we are lucky maybe rates can go slightly under 5%, but I don’t see sub 4% rates happening again anytime soon.

We view our home in McLean Hamlet with a 2% now as part of our retirement plan for cash flow. Our mortgage is less than $3K per month. With taxes and insurance it is $4.6K per month. Could rent it for $6K.

The schools are excellent and when our youngest graduates from high school, we will move to a low cost area and pay cash. But not planning to sell the house in McLean! It would be stupid to sell it and lose the passive income.

If you sold it and put the proceeds in a money market fund earning 5.5% per year, how much would you make per year?

Money market fund rates are variable. I doubt they will stay at the current levels long enough to make this a good trade off. The 10 year inflation expectations for the market is only 2.34% rn, so I wouldn’t make a decision with the expectation that you will get 5%+ interest rates on MM for years.

Fair point. Better to invest in a stock index fund anyways if your time horizon is long enough, and get yourself 8-10% per year on average.