Home Property

By Steve D on Jul 8, 2010 | Reply

Well…unless you are 65, you can’t get a reverse mortgage. But if I had equity and could afford any payments, I would remove the equity from the properties I had, put the cash in the bank, wait for the crash and then scoop up a few of the deals that arise.
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By Paddy on Jul 8, 2010 | Reply

Rental is a good way to ride out a property crash, because rental prices don’t fluctuate as much as purchase prices (value).

Keep the steady income of the rent, maybe consider selling when the market recovers
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By David M on Jul 8, 2010 | Reply

If you KNEW a house price was going to happen then you should sell both houses now and then buy them back after the house price crash was over.

The money you make from interest from investing the money in the bank will be comparable to the rent you were receiving. Or if you’ve borrowed the money to pay for the properties then it will stop you from going into negative equity, where the value of the property is actually less than the amount you owe the bank.

The problem of course is that nobody actually KNOWS when a crash will occur. If we did we’d all be millionaires.
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By Bob M on Jul 8, 2010 | Reply

Wait till the Crash gets closer – borrow on my equity and then buy more property.

Money works 24/7 (365 days a year) and can make more money faster than I can work for it!!!

Oh……while I think of it……….. Whenever I buy property, I look for the worst house in the best Street. It’s the Streets and Suburbs that increase property values – not the house!
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By Judy on Jul 8, 2010 | Reply

I would sell both homes.
Take the cash and rent.
Wait till the housing market hits the real bottom, then buy in cash will all the money I made from the sale of the 2 homes.

Lesson learned in finance class:
Borrowing money ONLY makes banks rich – filthy rich.
Lesson #2:
You must be 62 or older to get a reverse mortgage and have more than 50% equity.
Reverse mortgages are the worst financial decision an older person can make in their lifetime.
Google their costs – you end up with absolutely nothing to your name.
Remember – its a loan you have to pay back – nothing else.
Whenever you decide to sell your home, you will be responsible if the bank can not get its original reverse loan money back.
They will sue you for the difference.
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By glenn on Jul 8, 2010 | Reply

Depends on what you mean by a "property crash". If you knew that the government was about to reveal that nuclear waste was buried under your rent house- then I would never want to own it again.

If it is only an economic downturn that would likely on last couple or three years of then I would hold out.

I can not imagine ever buying a house in China for several reasons. #1 Communist governments have in the past seized private property in mass quantities and could do it again with no notice. #2 I would never want to own single family investment real estate more than 25 miles away from me. #3 I don’t believe I know the desires of the market in China and could easily buy the wrong property.
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By MVD34 on Jul 8, 2010 | Reply

I don’t think you understand the concept of reverse mortgages, despite your obsession with them.

<grin>

You realize that you must actually own your home first? (have equity) You must be a "mature adult" to qualify. And the terms of the reverse mortgage favor the bank, not you. There are many other income sources that are to your advantage. In the big picture, only a very few folks with very particular situations are really going to benefit from a reverse mortgage.

I, for example, own commercial and residential property that I rent. I also own three homes (one primary, two vacation). I simply cannot get a reverse mortgage, because I am not old enough to qualify. Plus, I own my property free and clear. As long as I have rental and other income to cover the upkeep, tax, and insurance, I am cash flow positive (the "golden key" to long term success in the real estate market).

Finally, while I believe more down side exists in the marketplace, I don’t think it is permanent or important with properly priced purchases. In my case, the one residential property that I rent is in my own neighborhood and I bought it at a sell of a price last year. I have a very healthy profit in the property already. Even if I loose it over the next three year — which is unlikely — it won’t hurt me in the long run.
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