Will buy and holding shield me from an impending crash?

Question

Joshua D. · Answer

@Steven C. Suarez

Sounds to me like they are back up around the cost to build a new one.  You are not in the area where prices were 800k for a ugly 2/1... no that place has a bubble.

I would hunt down GREAT deals in your area.  to me that sounds like you want to be buying houses for 90k or less and renting them for $900-1000.  If you can do this. You will not regret it!

If you pay full price 150k and are renting for $750 a month,  this might not be a great plan "If" the market dose  drop more than 20%.

other issue is if your sub market dependent on 1 industry... like oil.  then i have NO idea.  you might be in for an "impending crash"

Josh

Joshua D. · Answer

@Steven C. Suarez

What crash?

Shital Thakkar · Answer

@Steven C. Suarez,

Hi, Arlington and Hurst are all good area and growth is beyond imagination in DFW metroplex.

If you are getting 0.9/1.0 % rent, then it is safe to invest..... I know it is very hard to get that in DFW lately... Economy is very diverse in DFW so I dont see crash in near future but stagnation always possible.

As @Joshua D. suggested, if you can find 90K house with 900 rent then go for it...

Brent Coombs · Answer

I suggest: don't be BORROWING more than what they were worth a couple of years ago.

Because, if/when the next crash comes, AND your loan is called in, will you be be able to avoid being foreclosed on? I agree, it theoretically shouldn't matter if you're "upside down" - so long as you CAN keep up the payments! But, it's good that you're asking these questions NOW! Cheers...

David Dachtera · Answer

@Steven C. Suarez,

Because that will effect both real estate and the economy as a whole, job loss among your tenants will be by far the greatest concern. If people aren't working, they can't pay rent if they want to eat, and some can't even do that.

As @Jeff B. suggested, you may have to just hunker down and wait it out if/when it happens.

Events like that hit everyone - don't take it personally. Just do what ya gotta do and hang on.

Jeff B. · Answer

It's speculation there's a 'pending RE crash'.  *IF* there is one and you're concerned, then think of your response to being upside down on a property (ie: mortgage balance is more than FMV).  If you treat you properties, especially your personal home, as 'an investment' then how you manage losses or market fluctuations comes into play.  On the other hand, if you're really into B&H for long term, then changes in the market are not a major concern as there are long term benefits that out shadow short term evaluations.

Personally, for a home, I think it's a mistake to treat it as an investment and being upside down is irrelevant.  The contrary point would be to have a job with frequent relocations in which case it IS A BIG DEAL.

JR T. · Answer

There is no way to time the next crash. Trump could put in some real policies that could make the economy go bananas - it's already simmering with anticipation of good news to come. Buy a house you will be happy to live with your family in for some time. That's the best protection.

Will buy and holding shield me from an impending crash?

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