Quote from @Bill B.:
@David Dachtera
Lately I’ve been accused twice of insulting people when I ask questions, so right up front. This is not an insult, it’s a real question.
You say: "Investing" for appreciation is NOT investing, it's speculating (read: gambling).
Are you saying almost all stock investing, which is almost entirely based on appreciation is gambling? I certainly feel that way about bitcoin and probably silver/gold, and at least a little about stocks. It’s always bothered me when people won’t invest in real estate without cash flow but they’ll GLADLY invest in stocks with NEGATIVE cash flow, praying for appreciation.
This is the exact reason I stopped investing in stocks. There was no way I could buy enough stocks to generate enough cash flow to live on. When I retired I didn’t want to “hope I died before I spent all my savings”. That and having zero control over if they went up or down each day or even over time got me to real estate and changed my life.
Again, honest question and not aimed solely at you. I’d be happy to hear anyone’s opinion, you were just the latest to say it and I thought you might still be online.
Very interesting take on it all!
Stocks and real estate can both cashflow.
You can buy and sell to profit from the appreciation on either (flipping properties or stock trading). You can also cashflow (renting a property or dividend investing) regardless of the asset price.
Dividend stocks are simple. You purchase once and they don’t come with expenses but like you mentioned, a lot harder to live on a dividend cashflow there.
They both have a purpose and come with their own strategies but let’s not forget the biggest reason. We’re not using our own money to cashflow with real estate.
Back to the original post.
If you’re losing $1,000 at an 10% rate. I could understand waiting a little and trying to refinance into a better rate.
If you’re losing $1,000 at 2.5% I don’t know how you could improve this anytime soon.
-Are you going to refinance later and lock in a higher rate after the principle goes down?
-How much would you have to pay off for you to even break even at a 7.5% every month?
That interest rate sounds GREAT but not when it comes with a negative cashflow.
I love seeing everyones feedback!
