In Ask Sherry

Ask Sherry: Would I ever want to invest in real estate close by or far away?

You asked, and I am answering every Friday once I have enough questions!

https://docs.google.com/forms/d/1DKFg6SD0Kmb_0U5yb4OTNfkvfmsf5dWxJJbZTzUtH7M/edit

You can ask any question using the form here.

Why is your blog so full of advertisements?

It is me and it isn’t me.

Google just recently went through some changes last week or so and got rid of the feature that let me control how many ads would be on the site.

I can no longer lower the amount of ads and adjust it for “Ad balance”. They literally put in ads where they think it will do the best and I also have no control to say “Not here, but here”.

I am currently trying to figure out how to lower the amount of ads without having to remove Google completely, as it is one of my major ad networks.

I have already made a few changes but it will take 24-48 hours for the it to take place. *sigh* It isn’t instant I am afraid.

Thanks for your patience!

UPDATE: Should be better now. Is it?


Would you ever want to invest in real estate near your area or long-distance?

No. To both. Absolutely not.

If you’re talking about a place other than my principal residence (the condo I own now), I don’t to ever get into real estate. I don’t want to be a landlord, I don’t want to hire a management company to deal with tenants, and I don’t want to tie up capital and also have to get a mortgage to buy these homes, set aside money to fix them, etc.

Not to mention the fact that I likely won’t get approved for any mortgages because in the eyes of the bank, I do not earn a salary (no T4 for me), as I take my salary from my company in non-eligible dividends, which means I earn $0 every year. Mortgages all hinge on whether or not you earn a “salary” and how “stable” that is (a load of crock really), and doesn’t look at your assets, financial situation and net worth compared to your age.

Unless you know a banker (we do), I wouldn’t be able to get a single bank to lend me money for a mortgage, which is ironic because at 37, my net worth is pretty high and I have zero debt, which should be a banker’s wet dream if I want to borrow money from them.

What they’d likely do is make me take a mortgage out on my existing asset to leverage it for a second home, but again… I am not into debt and this sounds like a lot of work and stress.

I particularly also don’t want to be an AirBnB host or do ANYTHING that requires a lot of interaction with people I don’t know. I like talking to people, but on my own terms, like in messages online or controlled interactions where I decide WHEN I want to speak to them or not. I have heard too many horror stories with landlords to want to even consider this. I am definitely not that kind of patient person to invest in real estate.

If I want to invest in real estate, it is REIT mutual funds for me. I can sell them when I want, and I still get the benefits of a real estate portfolio.

Also, real estate isn’t really an investment unless you’ve done the numbers and compared it against an opportunity cost of investing that money instead.

Most people don’t think about everything that goes into a home, all they see is that they own something and “don’t pay rent or condo fees”, which is a very narrow, short-sighted view.

The reality is that you don’t own jack squat until you’ve paid it – the bank owns that home or property of you have a mortgage out on it, and they can seize it to recoup their ‘losses’ from lending you that money to buy the place, not to mention that renting/condo fees pay for what your home maintenance fund should be doing, amongst other things.

Still have a burning question?

You can ask any question using the form here and all of my previous Ask Sherry posts are here.

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Sherry of Save. Spend. Splurge.

Am my own Sugar Daddy. Am a millionaire at 36 after getting out of $60K of student debt in 18 months, a little over a decade earlier, using TheBudgetingTool.com. I have worked 50% of my career (taking 1-2 year breaks), and quadrupled my income within 2 years of graduating, going from $65K to $260K with an average lifetime savings rate of 50%. I have 11 side incomes that are on track in 2020 to make me $50K - $75K. I could retire today if I wanted, but love my work-life balance as a freelancing consultant in STEM (Science, Technology, Engineering, Math). I am all about balance - between time and money, and also enjoying my money. I also post daily on Instagram @saverspender.

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4 Comments

  1. GYM

    Hahaaha. Bankers Wet Dream.
    I have never heard that term being used and have not read the words wet dream in a while.

    We might do an investment condo (so we can stay there too) in Hawaii if the price is right, but otherwise, not really interested in real estate especially if you have a bad tenant.

    What percentage of your portfolio is in REITS?

    Reply
    1. Sherry of Save. Spend. Splurge.

      Hahah I thought I’d add that in there for spice.

      I am not interested in investment property anything mostly because of the hassle afterwards with estate planning.

      Less than 5% of my portfolio is in REITs. I like them and I also don’t like them.

      Reply
  2. Paula G

    Much better! Thank you!

    Reply
    1. Sherry of Save. Spend. Splurge.

      Phew! Thank you so much for bringing it to my attention. I also realized they rolled out some new functionality on another network called a “pillar ad” which I didn’t know existed.

      Reply

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In a nutshell…

Save. Spend. Splurge.
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