Investment Property or P-car?

I've been searching for my first P-car now for over six months. Folks on this forum have been really helpful. Great bunch of people. Super patient and committed. I'm now faced with a decision to shelf my dreams for a bit and purchase an investment property that is too good to pass up but will take most of the savings I've made over the last few years. I'm hopeful the positive cash flow of this will lead me to an even better p-car than I had budgeted for in the recent past, and that the good ones are not all snatched up and put on ice as collectibles. Were any of you faced with these same dilemmas, or currently facing these same decisions? Do I get something that makes me feel good on my daily drive one hour each way to work, and pass up pulling in an extra $1000 per month, but give up most of my savings? Where else can I make $1000/month on my money? Surely a p-car isn't going to appreciate like that in value, if at all? Hopefully, those funds will get me closer to the car of my dreams faster? This will be my second investment property, besides the house that I live in. That first property more than doubled in value. So you see... g.

Investment property. I will go a step further. If you need to make a choice, then the cash flow decision is the correct one.

It's a no-brainer...........investment property.

Property.

Agree with everyone....If you can wait....When I was younger all decisions were to increase networth….now I can get whatever I want and I am sure there are many on these forums that did the same. I think your thinking is spot on.

If you are in a position that is going to wipe out your savings or leave you with no emergency fund then an investment property isn't a good idea. What happens if you lose your job? You say you will make $1000 extra a month but did you account for an sort of maintenance budget? Are you hiring someone, taking care of it yourself? Do you have 1-2% of the property value at all times tucked away for repairs? What happens if the renters bounce and leave you with no renters for months? There is not enough info here to make an informed decision. Right off the bat for me its a no go if you are wiping out your savings.

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As others have said do the investment. Regarding the part about "all snatched up and put away as collectibles" my opinion is you won't have to worry about that for many-many years on the 996-997 versions except for the high end rare variants.

"Show me the money".

You can easily make a $1,000/month with zero risk with today's interest rates. One of my credit union accounts is already a tick over 2.1% and going up slightly each month. Hopefully your work 401K/Roth 401K is fully funded ($18K) and your self directed IRA (another $6K) too. I assume you're under 50 y.o. *check my numbers, they may be off for 401/IRA by $500.

I used proceeds from real estate transactions to buy a 911. Have your cake and eat it too, albeit patience needed.

It depends. How old are you? How much money do you make? What are your expenses? What is your financial situation? How is your health? Whats the state of your current car? Is this a toy? So many factors... There is no correct answer. Its all about priorities. I was in similar situation and I chose to get the car. Here are reasons in a rambling order: - Its still a seller's market and prices for real estate too high...rather save money and buy on the dip - Unable to locate what I considered a profitable deal - Many well known real estate pro's are liquidating due to high prices - Not enough time to invest into real estate due to personal projects and first kid..the best way to make money in single family homes is to buy run down properties and renovate them cheaply to increase equity to then refinance etc... this takes lots of time and is more of a job than passive income - It varies on markets, but in many areas the return on investment made on rental property is very low when accurately estimating costs...this includes allocating paying yourself to manage (if you do) and other 'hidden' expenses you might not consider when analyzing deals - Stocks were performing well and that was a better place to park money - The equivalent property I could have purchase instead of a car was not a significant profit - Renting single family homes doesn't scale and its easy to be upside down if margin is too close (especially older homes) - Using personal money and mortgage to finance a deal is risky...the smart people setup LLCs and use other people's money - You SHOULD NOT dump a bunch of cash into a car (via down payment or buy out right)... meaning you could finance and buy both - The smartest way to purchase real estate is using 30 year mortgages for cash flow, meaning that's how long before money is freed up. The ability to get additional loans is reduce for 30 years (meaning you might not quality got the car if you're financing) - Cars are paid off in 2-3 years freeing up credit and ability to borrow more. They can also be used as leverage to secure funds. - If you make 100-200k per year and depending on your financial situation, the number of mortgages traditional backs will give is less than 5 - Considering that you must own and drive a car, the additional expenses of driving a Porsche is less than it seems (unless you are willing to drive an unsafe/unreliable 15+ year old clunker, you're still going to be paying for a car) - People take you more seriously in real estate if they think you have money...real estate pros, contractors, meetings etc - Say for example you made 1000 per month pure profit by spending 150000 cash on a home. It will take you 12.5 years to make the money back and then START making profit. This is not considering expenses and other complicated math, nonetheless, it wont make you rich or fulfill any desires. Spending 150000 cash on new GT3 will and you would even flip it for profit. - You can't bank on appreciation and especially in this market - The real money in real estate is made on big deals (large apartment buildings) and often by middle man in syndicates (including real estate agent)... the investor is the pawn - I drive a lot (also 1 hr to work and 1 hr back, though only 3 days a week) so having a nice car is a priority to me - Car interest rates are really low and its easy to make more... not a priority to pay off - Things happens and there is always an excuse to not buy a sports car...best to get it out of your system earlier - You're not losing much buying a used car... worse case you can re-sell it (say if you lose your job) - A real estate property gone bad isn't liquid... bank will get their money or foreclose (meaning you can kiss the opportunity to be financed a Porsche car for 7 years) - Typically real estate is a way to diversity or hold money and there are other ways of investing - many don't mind they don't a tiny lose - The best deals are in mid west and I don't want to move there... remote purchase not my thing - A car is a tool that is required, but a real estate property is something extra - If you own any high interest loans, it often makes more sense to pay them off instead of investing - Real estate investing works best when you have a team and its best to get associated with people before jumping in - Lots of properties out there with chronic problems that many people miss and it will bight them many years later - Tenants trash properties...frustrating and doesn't help you sleep at night - Contractors are THE WORST to deal with...stressful and doesn't enrich your life - Managing properties is a job even if you hire property manager (must manage the manager who doesn't view you as a priority) - Moderate income, saving, and investment wont replace your job or let you retire early... a high income will allow this - You can pay as little as 5k down on a car, but need 30-40k+ (20%) to finance real estate - Buying cheap run down properties with cash (often in bad shape or too cheap for bank to finance) bad neighborhoods is a bad idea... looks good only to a novice investor who doesn't understand how to properly calculate expenses...often problem tenant and negative ROI long term even if a little more cash short term - Living with regrets and not fulfilling desires is unhealthy I'm all for investing in real estate, but you must know what you're getting into. Not to say anything thinks this, but its not as simple as dumping money and suddenly it grows exponentially. There's plenty of people out there giving advice that might be sound, but in reality the only reason they succeeded is because they got lucky and bought during the crash...or they just know the right people that helped them out. Many smart and hard working people (including Dave Ramsey) get screwed. Lots of competition out there. First flag I see is found a deal 'too good to pass up.' Possible, but I'm skeptical - bet I could figure out everything wrong . I would NOT give up most of your savings for a real estate deal OR a car. I'd NEVER use up all my savings and buy real estate...you NEED cash reserved for yourself, other things, or for that same deal. Hopefully use less than 50% of your savings to purchase or you can't afford it...

if you are hesitating between the two, then in my opinion the answer is to go for the property investment.

Invest in property to park a Porsche

Property, hands down.

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Yep, this is my opinion also. Buy them both, with someone else's money....

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This is spot on advice. I just bought my first 911 less than 2 weeks ago and never would have done so without having some RE investments first. YMMV.

What would Dave Ramsey say.

19 years ago at the tender age of 31, wife was 27, we purchased a vacation property on the water, 100 miles from home. Based on the equity of the property, every beer that I have drank there, every gallon of gas I have put in the ski boat, every renovation, every property tax bill or electricity bill has been paid for by the equity increase. Property was $110k in 2000. Easily worth $300k today. Between toys (boats, atv’s, tractor, tools) and renovations (gutted the interior and redid outside and all mechanicals), I figure I am in for $150k. So I am still up at least $40k. That being said, would I have saved up $300 over the last 19 years? Yes, I am certain of it. I was able to build my equity while fishing, hunting, water skiing, entertaining. We actually spend about 90 nights there per year. The city house is just that a house. We consider our vacation property our real home. You just can’t beat that deal. I saved $200k over 19 years by drinking beer!

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IMO Dave Ramsey is only good for people struggling who need to get out of debt and this is beyond this scope. A lot of people are giving the advice that OP should purchase the rental property but without more info, this is poor advice. If it costs the OP their savings they are one disaster away from bankruptcy.

That's a huge over simplification.

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Most of what he talks about is helping people get out of debt and I happen to disagree with him in some of those areas. In fact, I would wager to say unless OP has maxed out his retirement options and has no debt an investment property would not be on the table according to Ramsey.

^^ Dave Ramsey has a lot of folks that follow him that are millionaires. Financial freedom and good decisions are the main points he makes.

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If the op had 600k cash to park in a savings account to earn 1k a month, i dont think we'd be discussing a $25k 996. Also, assuming op is not in his 50s, parking that kinda money earning 2% would be pretty poor allocation of resources.

.....

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"Buying a porch is stooopppid. Stooooooopid." "Before investing, I want you on Baby Step X, meaning everything you own is paid off." "Of course you're not going to finance the car - you're buying it with cash." Dave Ramsey runs a pyramid scheme. He is a successful actor.

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Without more details I think you're right...the OP is thinking about dropping 25-30k on a used 911 vs financing a single family home to be used as a rental. Both would wipe out savings. If that's the case, I suggest financing the car and keep your cash...save up more then get finance a real estate deal in 1-2 years.

+1 Property. As other said, account for un-occupied time ($ you have to spend between renters where you have to pay for paying for mortgage, utilities, maintenance, repairs, etc). If your really profiting $1K/per month, then a couple months in reserves. Then next tax season, re-evaluate your situation. You will be pleasantly surprised.

Make sure you read the Renter From Hell thread in the OT Forum.

You're coming to a internet car forum to ask for financial advice? Hmmm... Big mistake. Go speak with your wife, your accountant, and your financial adviser - If you've done that already and don't like the answer, do it again! My hunch is that you already know the right answer, but you figured you'd come here to get the answer you wanted... So, go ahead - BUY THE PORSCHE ! Feel better?

You only die once, get the Porsche! One bad renter will ruin your year...Ask me how I know. In all seriousness, this is not the place to get your answer. There is a lot of information that needs to be considered when investing. I did well with most of my real estate investments except one!

As long as your retirement is properly funded and you have a financial cushion in the bank (ie not totally emptying your savings) and are accounting for the time and cost of managing property....and it really is a good deal (not just a good deal in the current market)...property.

whats more likely IMS bearing failure or real estate market crapping out?

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About equal, once every 10-15 years, lol. Only difference is RE rebounds

Well... I got outbid on our offer for this place and think I might sit out this bubble now. Stuff has gotten insanely expensive on the RE front. Back to looking for a p-car

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I LOVE hearing these stories! Congrats!

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Just so many of these are wrong! That being said, your answer is �it depends�. What�s your financial situation? Where is the property? (Location is everything). How much down? Length of mortgage? Hopefully 15 yr. How much reserve in the bank? Do you have any other debt to consider? Secure job? Experience dealing with renters? Gonna have it in a LLC? Etc etc. Bottom line, if done right an income property is hands down better than a buying a car. But it needs to be done right. Do your research. I�ll end in saying, if purchasing a rental will wipe you out you probably shouldn�t be buying a 911 or an income property. Continue to max out your savings until the time is right to buy the RE. It�ll make buying the 911 a breeze down the line.

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I agree with you, it definitely depends. I have one investment property right now that has almost doubled in value from $260 to $450K since 2013. Paid cash, no mortgage. Clear about $1K/month after tax/maintenance. No debt. No car loan. No credit card balances. Got some cash I'm sitting on, hence why I'm on this forum looking for a p-car. Looking for the right one. Looking for another property to invest in. Setting up an LLC now that I'm considering a second property. Got plenty of company stock. Secure job. We've got a property manager right now since we lived 2000 miles away but have recently moved back close to the property. Buying this rental will not wipe me out. Don't need to touch retirement accounts or sell stock. And I definitely don't live paycheck to paycheck.

Properties helped me make a big step up in life financially. My wife and I constantly rotate 5 properties at a time now while holding our full time jobs. Dave Ramsey.... where's the face palm emoji? I do just about EVERYTHING opposite of what he says and we are prospering just fine. His views are in the clouds and sorry for those who support him..I think his stuff is horrible and yes I have listened to him quite a bit over the years.

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Dave Ramsey's advice is generally intended for people without traditional financial education. The tenants of paying off debt first and foremost is excellent advise for those people with low incomes, little chance for career advancement, minimal financial knowledge, etc. For those more experienced and knowledgeable, that should perhaps be changed to consumer debt. How can you say that paying off debt, living off less than you make, donating to charity, and saving money is horrible? If everyone did this, this country, as a whole, would be in much better shape financially. I don't agree with never using a credit card, but to his defense, the studies exist showing that, on average, people spend more when using a credit card. Perhaps the RE price inflation has got people thinking they are infallible again...

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Everything you said.. I am. I came from a very poor child hood literally lived on the streets in Pontiac with my mom and brother. I have no financial education other than street smarts. I was in debt and borrowed money and bought a house on land contract it grew from there. There is debt that works for you and there is debt that hurts you. So ya paying off all debt is not always worth the empty pocket vs using that money toward growing it. Charity... I'm a youth pastor, I live my life wrapped around a desire to be closer to God and live a life HE would be happy with(still working on that one). Saving money.. again I invest it I don't set it in a bank for the bank to invest it. Hey if Dave's strategies work for you... awesome!!! don't stop but I have die hard friends who adhere to everything he says and I here people prop him up as the model for how to be successful and it just doesn't jive for me Plus they are miserable lol I have credit cards coming out my ears, multiple mortgages and I'm doing great. But I'll admit my path might not be yours.. that's fine. Trump doesn't buy a new tower with Trump money. Yesterday I bought a house with a hard money lenders funds(nothing out of my pocket). Already have a buyer for the house on land contract. In 8 months I'll pull an equity loan out of that house and pay him back plus 10% and have a house paid for by someone else with a little profit for me. For those who think that sounds fishy.... that's what banks, rich people, investment groups etc. do. Nothing wrong with someone TRYING to live with Ramseys plans (you have to pay for them if you get on his website *cough*) but FOR ME... horrible, makes no sense. Fun conversation for sure

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Agree. 90% of what Dave says is right and good. The only thing I don�t agree with is that he does want people to use the wonderful financial invention called leverage. Like any tool, one could get hurt using it. But if you know what you are doing, leverage is a small miracle. It�s all about risk tolerance.

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Yup, most of Dave's listeners are struggling to move on from paycheck to paycheck, not planning their 3rd or 4th rental property. Different audience, but the basic advice is sound.

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Quad, totally agree with that. that's where I was when my wife and I said the mountain of debt is just to big vs taking the $2k we had at the time from our tax returns and trying something different. His advise is sound.. its just not practical when you making $450 a week with rent payments, food, kids etc. if you always do what you've always done you'll always get what you always got. gotta think outside the box.

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I'd suggest most of Dave's CALLERS are such. Not his actual listeners or followers. It's a talk radio call -in show. How interesting, and who would listen, if it was a bunch of rich car collectors calling in asking for advice on buying a 911 or a rental property.

I'm going to agree with the majority here and promote investment property over Porsche, but I want to temper it a bit. I've invested in over 40 properties since 1983, most have been a very good investment deal. However, I've had 2 that went completely pear shaped. Not surprising, those two were the easiest to get into and the hardest to get out of. Combined they cost me more than $10k, which isn't a grand sum, but I still think about those losses when looking at something new to pick up. On that note, I want to mention the commission sales agents. Now, there's nothing wrong with a commission sales agent, I'm sure many of them are nice people. But, they have nothing I want or need, and I avoid them like the black plague. With the internet, and plenty of hustle on your own two feet, anyone can find investment deals in RE without sitting back and letting commission agents do the work. So far, I've saved far, far more on commissions than the $10k in losses over the years. Note I said 'investment' RE deals. If one is a first-time RE buyer, and you are shopping for that perfect, perfect little home to live in with the wife, kids and rover - then maybe, likely a commission agent will help those in need to get settled in. And happy for them, well done. Being an investor means squeezing every last dollar out of every deal done. I've chipped thousands off deals by knowing about escrow, utils, and the power of cash right now. I like to deal straight with banks who hold properties, and try to never, ever talk to a RE commission agent. Now, how this applies to buying RE or a Porsche, I guess that's a personal decision. But - if one goes investing, search wide, and search long. Be ready to slap the money down, and get a scribble on a contract TODAY. _ _ _ YMMV, objects in mirror, pro driver closed course, contents have settled and may cause **** leakage.

Doc- this is getting off topic, but I’d like to hear your opinion on wholesalers.

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<br /><br />This advice goes for not just RE but any large purchase. I don't care who's offering the item(Porsche, RE, medicine, etc). I find properties in all kinds of places. I bought a house in Katy that was having a garage sale, and we happened to drive by looking for baby clothes. I heard of a lake house in TX from a pastor friend, went out and talked to the owners, and bought it direct from them. If a 'wholesaler' is selling something, I'm interested in their property, not them personally or professionally. If they have the right deal, we're in business. But, I'm not going to go look for 'wholesalers' who think they sell low margin, high volume, because who knows? No one knows what's on the other side of the deal. Maybe they are pulling 5% broker fee. All I care about is WHAT they are selling, not WHO they are. This goes for Porsche's as well. There's a big thread about Porsche of Beverly Hills that would make you pull your hair out. Supposedly a high-end sales outfit right? From what I read, BH Porsche should be put out of business.

What cap rate do you look for in a RE investment?

The bull market 2010-2018 is the reason I bought my P-Car September 2017 TYVM! /X3

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Depends what type of investment, triple net properties 6-7% is common. Double net 7-8%, gross leases and modified version 8-10%. Multi family depends on level, high rent or low income type. Smaller units buildings usually offer higher cap rate.

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Ha, I bought my 2nd Porsche in Jan 2008. Poor guy selling got laid off and wanted the cash due to a bad economy at the beginning of The Great Recession. It was the perfect time to buy, not to mention, a convertible in winter is another good angle. We may be headed for another downturn in the economy where RE will start to dip in a real way. There may be deals out there. Now is a good time to make sure we as amateur investors have enough access to capital (our own cash, or very good credit) to buy if the time is right. But the market is still quite high, so I�m going to wait it out.

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I just put an offer in on a property that adjoins my current residence and wasn't willing to go about the asking price. Was outbid by two other offers. I think the RE market here is overheated and couldn't make sense of the rental income cash flow, even after putting 25% down. Got cash and will be holding out for now.

So, on the topic(s) at hand, P car or property. I have a couple res places in CA on long term rental. One is in San Diego, and 3 in Simi Valley. As an example, of what capital investment does, for the past year, my San Diego home has gone up 3.5% since Mar 2017. With a median price of $637,000 for residential homes, that means since last March, the home investment has made enough in equity to pay for a decent 996 (~$22,300). The Simi rentals are a bit lower, but similar. Said another way, notwithstanding the income from rent, the equity position of the home value pays for a 996 each year. Now, the question comes in - where does it all end? I don't have the answers for that, but for the past 34 years of investing in CA, I have yet to see more than 24 months of stagnant values in RE. The worst lull was from late 2009 to early 2012. People who are short term investors, and jumped out then got hammered. And I have no remorse for those who got hosed in that market. I too a risk and bought another property at the low point. Since then, the value of the home I bought in Nov 2012 has more than doubled. If someone wants to buy a P-car and has the cash to buy in, and maintain, go ahead and get what you want. However, if it comes down to P-car, or significant investment in RE, I would advise RE any time.

On the flip side (no pun intended), it�s possible to lose a boat load of money buying RE at the wrong time. Case in point, a condo that once sold for $205,000 in 2006, sold again in 2009 for $53,000.

There are a million horror stories about people getting upside down on RE as an investment. An examination of suburban Las Vegas will give anyone the *******. Just one mans opinion, but if one goes out looking where there are a dozen signs for new homes, it's almost a sure bet one is going to get hosed eventually. Also, condos are by far the WORST example of RE 'investment'. No one wants to live in or buy a condo. They are forced into the market by the cost of actual land ownership RE. I've never owned a condo, and will go to my retirement never having touched one.

Real estate is the way to go , but good luck and it would depend on locations. I definitely enjoy my 996 Turbo more than my rentals but that’s how I got it.

My advice to the OP would be to buy your Porsche and enjoy your ride.You can't always play safe and do the right thing. If it doesn't work out as planned it shouldn't hurt you too much financially. We aren't talking a lot of $ here to own a 996.

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Condos here in Detroit are a gold mines as the younger generations are veering away from the responsibilities of property and such and buying them like crazy. My brother and I meet with fellow investors regularly for the Detroit area and the market is quite well for them. Just throwing that out there. I never touched them in the past either but thinking a little different as the market is always changing.

Just make sure you factor in the CONDO/HOA fees!

Invest and take the money you make from that to buy the car!

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The condo that I bought for investment purposes I bought for $260K cash and it has gone up in value to around $420K. Several units have sold recently for that without the view of the river that we've got. So it should probably sell for more. I could easily sell it, take $20-30K, but a p-car, and then purchase another property for cash. Hmmmm...

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Well, you don't mention the duration of the equity gain your seeing. If you paid $260k three years ago, and now have a $450k value, you would be smarter to simply rent the condo out, and continue to ride the equity curve. However, if you bought it 15 years ago, your equity increase is pretty marginal. Don't forget that in all RE transactions there are fees involved. You may be able to shield yourself from many of them, but there are always fees involved in RE flips. In your example, you would actually be paying 2 transaction fees, one on the sale, and another on the new cash purchase. One of the reasons I avoid RE agents/brokers at all times.

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Bought it in 2014, about 4 years ago. Currently clearing about $1K per month. I don't think there is any other investment that will give me that rate of return. Since I have all of this equity locked up in this condo right now, are there good ways to pull some out? What are the best methods?

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Why put another lien on your RE for a car? Just get a car loan. I'm not a fan of borrowing on RE for toys, or any other reason not directly related to buying RE. I don't know what your mortgage payment is but if you already clear $1K a month now, think how much more you'll clear when it's paid off!

I'd visit https://www.bogleheads.org/ for $$ advice. Otherwise, I suggest you by the car and spend the rest on hookers and blow. Life is short

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That is by far the best ROI I've ever heard of for a condo. I admit to knowing very little about the condo market. The downside is you still have the higher fees. Ask around about a HELOC. It's a type of secured mortgage that is flexible, and doesn't need to be used for RE purchase. I'm not advocating, but a HELOC will allow you to take money out of your equity for purchase of a car, or boat, airplane, etc. Not sure if a condo would qualify, but if you are only looking at $25k, I don't see why they would have a problem writing a loan for that low of equity on the property.

Generally speaking, it�s true that condos are often not the best investment. If they are well run by a good board and are newer and in a hot spot up and coming area, they can be decent. Many condo markets go bust every 10-20 years (there was a time when Detroit was in that position). Sometimes higher amenities buildings with high expenses such as pools cost a lot to maintain and the assessments put a damper on the value of the condo. That said, I like renting my condo because it�s low maintenance. Most anything I need done can be done by building management. And even if the values don�t go up, many millennials like to rent. So it�s good to pay down the debt and can often pay for themselves over time.

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No mortgage payment. Paid cash for the condo. So I've got my equity locked up and not leveraged.

Equity loans on RE can be deducted as investment/repair/maint for the real property if one is willing to be 'creative' in their deductions. Unless a car loan is structured for a business asset(sure, my 20YO 996 is actually used in 'business'. Monkey business maybe), it is a personal expense, and not at all deductible. Again, I am not ADVOCATING this approach. but I've heard from my ex-uncle, son-in-law's best cousin that it's been done before.

Good afternoon, it would be interesting to know what you decided in the end. Of course, I express my point of view, but I think that in any case, it is much better to buy real estates such as apartments or houses, since this is a longer-term investment that will only increase in price, unlike a car. You can order a good layout from https://www.boutiquehomeplans.com/ to make your apartment even more comfortable since repairs are always a huge premium to the price when selling\buying.

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Hi Rodabtin - I did purchase a sports car, and am still in the process of finding another investment property. I picked up a 2018 MX-5 Club with 700 miles on it for $10K off list. I love driving it and in the end didn't want another hobby in spending a lot of time fixing up a 996. Maybe some day I will change my mind but right now I'm having a lot of fun with it. Thanks for asking! Gumanow

The correct answer to your question is real estate investments, but timing is most important. You cannot afford to buy investment properties at a premium or you will be guaranteed to lose it all. They key is to wait for the market to drop and then swoop in when no one wants the properties. These are the folks that make the most money. The folks that bought in 2010 and 2012, have values increasing 2 to 3 time the original price, If you were to buy now there is no way to go up with rising interest rates. Finally I do not think buying a 911 now is a good time, I would save and keep your money until a good opportunity arises.

Quotes source post: 18058689

This is all great advice. While some cars also doubled or tripled in value, there are no deductions for cars unless you make a business out of it. And there�s no income to offset expenses. Not to mention risk. The fact that one can purchase an asset property, depreciate it from a tax perspective, and at the same time, the property appreciates over time is a rare thing. It�s still possible to not make much money on a real estate investment. I purchased a condo, not really a true investment property, in a city for $244k back in 2005, lived in it for 5 years and rented it out for 12 years. It�s only worth maybe $330k today. I owe about $135k on the mortgage and always would break even on it year to year. I was able to accumulate about $100k in equity (good ol� 5% down back then) over time. Most of that equity was from tenants. Free money. Compared to stock market investment funds, I possibly would have made more in the market, except my out of pocket equity for the condo was only $12,200, not $244k. I need to sell the condo at the right time. It �should� increase in value after having been decimated during COVID, but that assumes the city will bounce back, which it may struggle to do so.

I know this is an old thread, but just some mindless two cents worth of input from some random old guy. Snatching up that investment Real Estate property back in 2019 would have definitely been the far wiser choice. Given the current market and the escalation in prices and rent, it is possible you could have made a major score. You would have had a positive cash flow income for 2+ years and, depending on your market, your property value could have shot through the roof. You could have turned around this year and sold it, and again, depending on where your home market is, you could have probably made some serious cash from the sale, all the while taking the positive cash flow you made from the property to pay down the principal on your mortgage. A friend of mine asked me this question back in 2017, and this is the condensed version of what I told him I would do. He was in his early 40's, a lovely wife and 2 really good kids. They both had very nice incomes, they both had nice cash reserves (they were good savers) and he wanted an exotic car to get around in. He always talked about retiring before he hit 60. I asked him about where his finances stood and what income streams he had to provide for him and the wife in retirement, and also college for the kids. My advise was skip the car, for now, and to check out some rental properties in the burbs, with decent commuting distance to major employers in the area. I also told him to keep an eye out for areas that are experiencing rental shortages, as that market would be easier to get good rent in, not to mention the ability to get good tenants. I also told him to keep some distance from lower income rental properties, as having personal dealings with them, I could honestly say that it is far tougher market to deal with and make money in (and during the plague he would have probably lost out big time). To shorten the story, they skipped buying the car and found and purchased two very nice duplexes in a decent area. All his tenants have been great, and 2 of the rentals still have the original tenants still living there. They newer tenants moved in pre-plague. And, as an aside, all during this plague, all of them managed to pay their rent, in full and on time (huge issue for the rental market during the plague). In fact, things went so well, that they paid for all the oil bills for last winter, for all of his tenants, as a thank you for keeping up with the rent. I doubt any of them will move out, but if they do, he could raise the rent by 50% and still be under market right now. Anyway, he decided he really did "need" some sort of middle age crisis machine, so they decided (actually, his wife told him what he could do) to sell one of the duplexes. It was on the market for a total of 4 days. All of the offers were way above asking (and asking was way above what they paid for it back in 2017). They chose a cash offer which was slightly under the highest offer and they closed in two weeks. Oh, they made around $300,000+ (net) on the sale. So not only did he buy it right, he got lucky and sold it right. He had a positive income stream for the 4 years they owned. They also dumped their positive cash flow back into the property all these years to lower the principle amount of the mortgage. AND they decided to keep the 2nd duplex, as rents in the area have risen substantially and their property is definitely making them money. He is still looking for the right car, but they decided to take 3/4's of the profit and pay down the principle on the second property. They now have a few years left on that mortgage and will shortly have that paid off for an ever bigger income stream. If all goes right, they will be debt free by the time they reach in to their mid to late 50's. A nice place to be (and where they want to be), and smart choices can get you there. Sometimes it pays to put your wants on hold. Fun things are great to have, but not being prepared for retirement sucks, as does working beyond what you want. Preparing for retirement as early as possible and having some positive income streams from various sources should be an early in life priority. The cars will always be there, in some form or another.

Ancient wisdom built into biological life for millions, billions, of years.

Nobody on their deathbed ever wished they had bought more investment properties.

My biggest financial regret of my 20s is not putting every dime I had into more rental properties. The equity in just one that I was eye balling in 2016 would have bought a brand new Turbo S now.

"Buy land, AJ, 'cause God ain't making any more of it" -Tony Soprano

Quotes source post: 15628906

I have been fortunate enough to make well over a 6 figure salary since graduating college, and have remained living frugally saving every penny I could. I have been able to build my stock portfolio to over 400k in 5 years so far. Company gave everyone big bonuses this year. My cut was 80,000. Should I: -Put a down payment on an investment property duplex/triplex? -Buy more stocks? -Buy a Porsche 911?

Going through this right now. Purchased my 2nd investment property that will close June 2024. Will most likely sell my C4S to avoid having a mortgage on the property. In an ideal world, I'd have both car and property, but unfortunately I'm not massively wealthy.

Quotes source post: 19187311

Depends on your age and investment/retirement goals. A 911 is pretty much a financial negative. Only a few rare models ever get to a positive return and most of those are modest at best. I say you should consult a qualified investment councilor. Advice here is likely to be a poor choice.

Quotes source post: 19187908

irontmp - Marv is right. Marv also owns and loves a GT3. Life is a balance. For the huge majority of us peeps on RL, Pcars aren�t for investment. They�re for fuming over, loving on and driving vigorously. Why make �smart� financial choices and not make smart quality-of-life choices, as well? Sometimes smiles per gallon make more sense than miles per gallon. Find the best Porsche you can afford. Be methodical with your hunt. You know your risk tolerance. Make your shopping list. Go to a C&C or two. Drive a few models. Find one that speaks to you. Owning any Porsche is like getting married: Never be in a rush to get to the altar. Maybe the time is right for you�maybe not. My personal Porsche therapy has reduced my health care costs significantly. Maybe that counts as a good investment?

A p car is an investment property in mental health and smiles per mile. Huge QoL upgrade if you have to go to work every day. If you're already on the early retirement track, a 9x6 isn't a meaningful change in the plan, but boy does it make working the plan a LOT more fun. That's my $0.02

Quotes source posts: 19188237, 19188327

Absolutely !! I agree 100% !!! I have a good friend ( Randy) who was having serious lung problems, He had a rare lung disease he caught from having exotic birds ( He raised these big African Toucans and others) , It had gotten so bad he was on Oxygen 24/7 and was scheduled for a double lung transplant. He mentioned to me he was thinking of selling his 996( which I had helped him rebuild to a 3.8, Nickies, Hoffman heads,Carrillo Rods ect), and I told him I thought he needed to keep it for after the lung transplant for therapy. He decided to keep it ( 5 years ago) and has thanked me many many times for not letting him sell his Porsche....

Quotes source post: 19187311

It depends how addicted you are to minmaxing your money. An investment/rental property is a huge pain to manage - the health deficit may not be worth the income, my friend is going through this right now. Stocks are subject more to luck and other peoples' irrationality than your own good decision-making. The 911 is, if you need a car, one of those financial gambles that can really pay off or really screw you. Get a bad one and you're $25k+ in the hole. Get a good one and you can sometimes make multiples worth of profit. Like stocks, it's really not profitable long-term unless you're extremely familiar with the subject matter and pitfalls to avoid. I'd view the 911 more as a hedge against depreciation versus buying other luxury car brands. You may look like a pompous *** in traffic, but my 996 is so far literally cheaper to run than an EV.

All three stock market indexes are at all-time highs. Investment properties (residential) are a labor intense PITA but lower interest rates mean lower cap rates, mortgage rates and higher values. Porsches are not an investment but they are a lot of fun.

If you came to this forum to “ask permission”, I think you already know what the “right” answer is (hint: it’s not buy the Porsche)… Fortunately for us, the “right” answer is a moving target and applies differently to everyone. You have to weigh all the variables and do what’s right for you at this point in your life…

Quotes source post: 19188443

There are virtually no 996 cars that will return multiple times their investment. The possible exception might be a GT2 over sufficient time, but there are costs such as insurance, storage, and maintenance that chop into that investment. Add to that the limited miles you can actually expect to drive such a car. You are far, far better off with a good mutual fund. That being said, it doesn't mean buying a 911 is a bad idea, just do it with cash or funds set aside for fun and have a reserve for the unexpected. That way if something does go wrong it will not be an economic catastrophe.

Quotes source post: 19188837

Mid mileage manual C2's used to be $15k lol, they're $30k now. Turbos used to be $30k, now $60k. I saw a few GT3's listed around $30k back in 2017. Storage costs aren't insignificant, but if you bought at the dip and balance driving and storing, you are making money. The one true investment that I completely foresaw but couldn't afford to store, was a mint $7000 911SC in 2013. There's no way storage and maintenance could outpace what these cars trade for nowadays. And no, I'm not arguing that Porsches will outperform a good stock and property portfolio. But if you need a car, rationally you may as well make a bit off the top instead of buying a depreciation monster like many newly wealthy grads that fall for the marketing.

You're charitably going to get 20 MPG mixed from a 996 (and this number goes down as smiles per gallon goes up, a trade most everyone is happy to make), just on gas/regular maintenance items you're going to take an absolute bath compared to any other investment which doesn't require pumping dollars into it on a monthly basis. There are a number of mental gymnastics one can undertake to convince yourself that a 996 (or any car) is a better investment than just burning a pile of money, but to talk yourself into it being an actual investment in terms of utilizing capital efficiently is perhaps several bridges too far. The mental gymnastics I choose to go with was that a 996 checked enough boxes for a fun+daily car that it would make it very hard for me to consider buying a more expensive sports car in the future, which has mostly held.