3366 Investing in real estate
David Crook who writes for the Wall Street Journal has a new book, Wall Street Journal Complete Real Estate Investing Guide Book, which came out in December. The WSJ has its own convoluted system on when to insert a hyphen, but I'm not playing along. Anyway, he had an article in the WSJ on Jan. 10 that really knocked my socks off (can't stop using cliches since it was the assignment for Poetry Thursday).Using two columns to illustrate hypothetical investments in two houses both costing $200,000 in 1990 with a $160,000 mortgage, identical improvements (kitchen remodeling, new roof, and $150,000 addition) and both refinanced 3 times to lower rates, and both sold for $650,000 in 2006, he shows column one with a loss of $86,424 and column two with a gain of $403,397. Column one was the owner-occupied home with the usual deductions and expenses, and column two was a rental with the usual deductions, expenses and income.
It was eye opening to see that the fabulous gains people think they make on their homes probably aren't. Even if you play the devil's advocate and deduct what the owner of the rental would pay in rent for a place to live for 15 years while he rented out his own property, column 2 house is still ahead.
I don't know if this particular example is in the book, or if Crook wrote it specifically for the paper, but his writing is clear and well paced. This would be a good title to recommend to your library.Source URL: https://maryelizabeth-winstead.blogspot.com/2007/01/3366-investing-in-real-estate-david.html
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