Real Estate Investing
 

Has anyone successfully bought a home and turned it into a duplex? What's your opinion on that? Smart investment in this economic climate?

The reason I ask is because I have some equity at the moment, and I am trying to find ways to invest it, instead of putting it in GIC or Mutual Funds, as the returns are low.

If you have enough to buy a house and turn it into a duplex, you have enough to find a good financial adviser who will get you better gains.

I've been talking to a Financial Advisor from a Bank and he's been telling me to put it into aggressive Mutual Funds. But I personally think it's too risky and it won't generate as much gains compared to flipping it in real estate. Afterall, he can only recommend the products and services he sells.

Well if you're not going to take advice, do what you want, its your money.

Remember, everyone always gets rich flipping homes :rolleyes:

Obviously the FA is going to recommend the products/service he sells......cuz that is what he can do..He can't go offer you something from Istanbul cocaine market if he can't sell it now :)

Take a risk assessment test see where you fit in with risk.

I'm in the middle, in terms of risk assessment.

Any online guides available for investing in stocks?

This is worth repeating:
Please don't DIY investing, you cannot learn enough in the short term to invest safely.

You don't have to go to your bank to find a good FA. There's investment firms for a reason.

Believe it or not, real estate as a pure investment can be (actually, IS) riskier than investing in securities because essentially any residential RE is leveraged. You can avoid leverage with securities in your case, because you don't have to invest all of your cash.

If you're serious about investing vs speculating, you should get out of your mind "getting rich quick".

Generally, Real estate "investing" = holding the property for many years and pocketing the percentage spread you get in between your mortgage interest rate and ur rental income.

Real estate "speculating" = hoping the price of the home to appreciate because you have no control over.

Best bang for your buck would be buying a rental property somewhere in the states. You would get around 10% ROI annually and the dollar is almost at par. However, i believe it is harder to get a cross country loan so you might actually have to buy the house right out.

But do keep in mind, one of the factors that lead to the recent financial crisis are cost by sub-prime mortgages.

Hope this helps

Sometimes doing nothing is doing something. The current climate is a tough one to read right now.

If you can get a good deal on the home and the cost to change it into a duplex is fairly easy it might be worth while. I'm not sure if you're interested in making an actual duplex (changing the ownership of the property and the way the structure is taxed) or if you just want to add a suite to the residence. You can't just make a duplex anywhere either as it increases density and the area may not allow it.

You have to run the numbers to see if it's worth while. Asking the question if you should do it is too vague.

How much will the place cost you? How much will the renovations cost you? How much will it rent/lease for? How much will taxes and expenses be? What area is it in and what's the vacancy rate? Is there the possibility of capital gains or capital loss in the next 5 years? How long do you want to hold the property for?

My personal opinion is I wouldn't buy any form of real estate locally for a long time with the current prices and rents. The multiples are cash flow negative and there is so much potential for downwards pressure, there is too much risk of the property losing value in the next 5 years.

Real estate is a great way to make money but not right now and not locally.