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Spoken like a true economist (not that this is a bad thing). I agree with your first point, but I think you're wrong about the put option. It is not easy to "br
by chermanowicz 11y ago
Spoken like a true economist (not that this is a bad thing). I agree with your first point, but I think you're wrong about the put option. It is not easy to "break even or minimize your losses" at all. Only if you're putting no money down would this be even close. Real estate is illiquid by definition and post 2008 nearly every foreclosure lost 100% of the equity built (and a major impact on your credit score).
- fiatmoney 11y agoRight, I'm looking at it as one component of an overall cash flow & asset portfolio. It's easy to construct a scenario where it doesn't pay off - deflation that hits incomes, house prices, and rents is an easy one. But, as one component of an overall portfolio it has certain characteristics that help you hedge other risks you're exposed to in a way that not a lot of other asset classes can. This still requires that it isn't "too" expensive even given those other benefits.
- deleted 11y ago[deleted]
- dllthomas 11y agoMore finance than econ, to my ear. Not that this is a bad thing.