All Forum Posts by: Bryan Clement

These are all things for local markets. Also, people will constantly need places to live. So, as you explained in later posts, commodity prices dropping due to lack of use would be comparative to people not living anymore. The US has only seen one year that the population did not grow, and that was during WWI (1918). An extensive period of negative population growth could slow the growth of rents or home prices, but that would have to be significant and very long term before it made much of a difference. And, let me just say, it would create a buying opportunity for RE Investors who are smart, prepared and looking for good deals.

Originally posted by @Kai Van Leuven:

I spent a few years in the mid west in little towns that mined lead. At one time, the real estate investors there probably thought “we use lead for everything, no way it could fail as a commodity. If I hold onto this real-estate...” The same could be said for a host of other industries (travel agencies, taxis, news papers, ect.).

What will hurt real estate in the future?

My thoughts

1. Stagnant incomes- incomes are the driver for real estate valuation. You can show appreciation but if incomes are not increasing it doesn’t mean anything.

2. Virtual Work- All my investments are tied to suburbs of major/regional metro areas. If folks could live in Montana and have the same job, who would want to pay Seattle housing prices.

3. Basic Income- I try not to be negative but I fear a “race to the bottom” theory is pretty real. A lot of folks are finding it harder to make ends meet and Real Estate prices/rent outpace inflation. Our government will let any company merge or be acquired, creating super companies (antitrust laws). I am not for basic income but see it as a viable solution to some long term problems. That will make coastal areas prices fall and the Midwest and south to remain the same.

4. Transportation- the idea of self driving cars makes a commute not as daunting to many folks. Just sit/sleep in your car. Does the commute really matter?

These are all independent from a Real-Estate/rent bubble. If you got something, chime in!

In all seriousness though, if you A) can easily afford the payments and B) will be able to derive a significant amount of happiness from it, then it is probably a good decision. Maybe it's dumb for some people, but if you can afford it and it truly makes you happy, then go for it. Just remember your "why" for being an investor. If buying the car matches your why, don't even think twice! 

Originally posted by @Scott V.:

I'm totally prepared to get my *** grilled based on the title of this thread but that's fine. Please share your honest opinions. Here is the situation:

- I'm a complete car nut. I spend a lot of my free time researching cars, shopping for cars, watching videos, etc. and I've had my eye on a few models for some time now.

- I'm 30 years old, I'm a dentist, I do not have student loan debt, I live in an area of the country with one of the lowest costs of living, I have a monthly mortgage on my home of $2100. I make approximately $140,000/year and save 40% of my income. The remainder is budgeted for my expenses including mortgage, food, entertainment, etc. 

- My current car is paid for by the company I work for and I have no car payment. I'm going to be keeping this car as my daily driver.

- I put down a refundable deposit on a second "fun" car and the car costs $45,000.I think I negotiated well, the average estimated "value" of the car currently is about $50k. I've done a ton of homework and this particular car is projected to depreciate very minimally and even has the potential to appreciate in value as it may become collectible (I won't be counting on this as most all cars depreciate). The car is a few years old and has already done most of its depreciating but it still has 3 years of factory warranty remaining which minimizes risk to me in terms of repair costs.

- I have about 100k in cash savings but I will not be looking to buy the car in cash (I'll put a chunk of cash on a down payment and finance the rest at approx. 3% interest).

- I'm torn between the idea of total fiscal responsibility and buying something I've always wanted to own at a relatively young age. I'm not dead set on buying it and my deposit is refundable but I'd like to make my final decision in the next few days. 

- I'm currently single with no wife or kids (gonna do all that someday)

- Since this is a real estate investing forum and the topic is bound to come up, no, I do not have real estate investments at this time because I'm waiting to invest in my own business next year. I'll be looking to go about real estate investing in my field of expertise which is dentistry. 

Have any of you with more life experience gone through something similar and would you have done the same thing over again?