How much % of my income i invest in property

3 Replies

how much % of  income i invest in Real estate . and in which area of Austin Texas.

Harvard has the largest academic institution endowment fund in the world. Established in 1636, they allocate 11% for real estate and 12% in land, natural resources, timber etc. The funds return was 15.2% in 2014? They own a lot of reits. Their second largest stock holding is cementaries.

Updated over 3 years ago

Cemetaries :)

I can't say where in austin but I took the Elizabeth warren model of income and made it for real estate.  50% Needs, 30% wants, 20% savings.  I just changed the savings to real estate.  This is after I saved an emergency fund and paid my credit cards.  

I wouldn't recommend anyone put all their "savings" into real estate, even getting started.  The personal finance guys always say to get any employer match with your 401k first.  Think of your retirement account as a last resort asset in bad times...you need something there even if you are certain your parents will be good for a quick loan.  

There was an article in the Statesman many moons ago (2008?) featuring a California RE investor (middle-aged single woman) who bought a new home in a nice masterplanned neighborhood.  A renter's washer hose broke and flooded the downstairs and then the renter moved out.  The house went into foreclosure because the investor could not come up with the deductible for the insurance and pay the mortgage on top--it was an alligator property, one that the investor was bringing money to the table every month on.  She may have been getting the monthly outflow back at tax time, but she was just stretched too thin.  There were a lot of investment properties auctioned at the courthouse steps back then.  Some had two loans 20% and 80% and some were financed as second homes, so had lower down and interest but still didn't make it.  The numbers have to work AND you need savings.

Question #2 Where?  Maybe where you can get a property at 16% below market in case Trulia is correct and we are the most overpriced market in America.

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