Do I need more gold?

I have a feeling, and it's just a guess, that there's a difference between what you're talking about and what everyone else is talking about when it comes to investing in real estate. I think everyone here is talking about buying 1,2,3, or tops 10 unit resident rental properties. Whereas I am guessing you are talking about real estate involving 15+ unit resident rental properties, or even commercial real estate.

Wouldn't you agree that it's a much different experience owning a 1 or 2 family home as a rental property, compared to an apartment building with 15+ units or a mall? So much about these 2 situations is different, including an important one, which is the relationship the owners have with the renters.

Again, it's just my guess. But it would make all the difference between your experiences and that of others in this discussion.

 

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The only property I own are my home and my businesses building. Real estate is quite intimidating to me even though my baby brother has done extremely well with it..... I just wanted to address the gold part of this. I came into a windfall in the late 1990’s and purchased a substantial amount of gold. I still have that gold and have added to it over the years. Needless to say, if I needed the cash from the gold that I hold I would do quite well..... But here is the other side of that story.... After purchasing all that gold I became quite involved in precious metals. I have been a lifelong coin guy, it made sense to me. My business started growing and around 2010 and I began adding sizable amounts of silver to my gold holdings. Silver was teetering between $25.00-$30.00 at the time. Well as we all know The silver market corrected shortly after that. Now ten years later I may be getting back to being even with silver.... I found the hard way that I was not a precious metals magnate!........ Long and short is this. Through simple dumb luck I came out a big winner with gold. We are currently at the highest levels we have ever seen with gold & silver. It’s an exciting time to be holding. Personally, I will never again buy while PM’s are so high. They may double next year or they may tumble next year. It’s anybody’s guess. But we are at a peak value level currently. I would only caution that you don’t spend any more than you can comfortably afford to lose at these levels.

 

You may find this interesting, as the legal precedent which bankrupted many has been established for instantaneous depreciation recovery by government from those enriched through rental property laws:
https://en.wikipedia.org/wiki/Tax_Reform_Act_of_1986#:~:text=The Act phased out many,the deduction for passive losses.https://en.wikipedia.org/wiki/Tax_Reform_Act_of_1986#:~:text=The Act phased out many,the deduction for passive losses.

The basis for significant properties was appreciably increased for many who didn't lose their investments.

It was asked whether there was/is a difference between single family and apartment dwelling investment. The simple answer is generally yes, as seemingly a better class of people/family qualify for a single family residence, but inspections are generally more critical/frequent. Expense costs are difficult to recover unless the land-lord performs all maintenance. Rent rates are generally controlled by government edicts.

JMHO

 

This Act helped and hurt many folks. You bring up a good point. If the laws are changed again, who know what it could do to rental investments.

 

This is great advice. Thank you!

 

I agree they are favorable today, but winds are blowing. One party right now seems to be dominated by the renters, and their Presidential candidate has already promised "tax reform" that would nearly double the incremental rate as well as abolish stepped up basis for inherited assets. To completely rely on a broke government who still wants to spend like drunken sailors to maintain favorable tax laws for landlords seems a little "dangerous".

Me? I simply do not know. So, since I don't know, I spread out my investments. I have stock funds, individual dividend heavy stocks, international stocks, rental houses, farmland, and PM. Will I hit a home run? Probably not. But just like hedging, the goal is not o be 100% right, its to not be 100% wrong. I just want to live the rest of my life the way I want, and leave assets to my family. Not looking to hit a home run. I simply pursue the German "get rich slowly" model.

 

While I opened this thread to figure out whether it made sense for me to buy a significant holding in gold, I’d also like to think I’m a student of the rental game since I own several properties.

So to weigh in, the government, in my opinion, will never remove significant incentives for the landlords. If they did, then nobody would want to be a landlord and that would create a housing crisis of epic proportion as there are so many people out there who can’t buy their own house and running rentals is hard enough as is.

Furthermore, there are way too many influential people who provide lots of money to congressman, many of whom also made their fortunes with Real estate. They would hurt themselves tremendously if they damage the status quo. It just won’t happen. It’s as likely as Congress voting itself a pay cut.

 

I agree with this assessment of the market as a whole.

I'm a 20 veteran management level City Planner with a Masters, I can tell you, with certainty, that the vast majority of the urbanized areas of the US are safe from local government "confiscation", provided (and this is the important part) one's property is compliant with the local zoning, property maintenance and health codes, etc.

Trust me, the code enforcement staff at your local municipality would be happy to leave you alone if you play by the rules.

As for Zimbabwe, Venezuela, etc, those are not direct analogs to the US. Look over the modern (post 1900) history of real estate in the US and assume that you're going to be just fine.

Lastly, the modern real estate market(s) in the US only really have 'value' (reliable, predictable) because of government regulation and enforcement.

Real estate investment and management is hard work (as others have said), but that's why many, many individuals have made trillions of dollars in profits from it.

 

I never said people have not made money at it. I am simply pointing out real estate is tied to local politicians. It is not in any way portable wealth. Therefore, if the US was to lower in attractiveness any RE holdings would be tied to it. I understand I pointed out outliers, but if you buy RE in a community and suddenly something happens, (like banning coal, world price for oil collapses, etc), you cannot pick up your investment and move elsewhere. Let's talk to people outside major coal mining locations and see how great their RE investment has been.

That was my point. Its not portable. PM in many ways is a horrible investment, yet one thing it has is portability. If something happened here, I feel good that I could carry some liquid assets to someplace that is better, and could afford to do so in a moment's notice. I have a young family, and this is part of my protection for them. How is owning an apartment complex going to help you if everything goes to heck here and you need to get out? Just trying to cover all bases.

 

I hear ya, medoraman.

Portability is important within one's entire portfolio, but I was refuting imrich's tone and position as being exceedingly dour and hyperbolic.

Even a $200 lot in Detroit has good utility (and thereby some 'value').

For the OP, more gold (but still minor absolute amounts) could be a good idea for more hedge position. But his real estate is likely, on average, to provide better returns.

 

Thank you for your subjective assessment of my factual statements for which documentation can be supplied.

The OP requested a factual answer to a specific query, which I believe a jurist would find my responses acceptable court submission evidence.

If you found my response of conditions/actions offensive, as did I, we both are owed an apology.

I know you are correct in your CODE statement, as I've often stated when residents asked: "how can they do that?", codes are written generally to include and find violations anywhere. If they aren't exacting statutes, as rules/regulations they are interpretable by government.

I've multiple proprietary technologies to eliminate government required property damage, where when applied, I was cited "cease/desist" requiring a court action to void. You are correct that with proper government oversight/regulations, adverse conditions may not exist.

I previously requested that the thread be closed to avoid your/others offense. Thanks for your assistive effort.

Please accept my statements as worse case possibilities.

 

No offense taken, imrich.

This thread just needed another set of factual assessments presented by an experienced and reasonable professional public servant.

Certainly, individual cases may vary and worse case possibilities do exist, but the exceptions do not make the rule.

 

Everybody's financial situation is different. If you understand financial markets -- stocks and bonds -- apply that knowledge. If not, seek out a quality financial advisor.

[qiuote]I’m about 10 years from retirement and 15 to 20 years ago I bought several town houses to use as a rental property. Well retirement will begin when they are paid off.[/quote]You should have a focus on income investments.

Rents could be difficult next few years, depending.

You want that situation reversed.