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Entry load of 6% (real estate commissions) 1% penalty every year (property tax) Exit load of 6% (commissions again) That is why real estate tends to be a wor
by putlake 10y ago
Entry load of 6% (real estate commissions)
1% penalty every year (property tax)
Exit load of 6% (commissions again)
That is why real estate tends to be a worse investment long-term compared with the financial sector.
- w4 10y ago>Entry load of 6% (real estate commissions) 1% penalty every year (property tax) Exit load of 6% (commissions again) Whoa whoa whoa, you can't call the commission a cost on both the purchase and sale. Either call it a cost on the sale (seller picks up the tab since seller pays the agent), or call it on the purchase (sellers aren't dumb, and price in the commission). Don't call it a cost on both sides of the transaction, that doesn't make any sense.
- vonmoltke 10y agoYou are inaccurately double-counting the commission. There is no "entry load" for residential real estate. Also, your analysis excludes the utility value of having a roof over your head or tenants paying rent. It basically assumes you buy a house and let it stand vacant to cash in on appreciation. Nobody in their right mind does that.
- bzbarsky 10y ago0 capital gains tax for most people. For a long-term investment, just that part can be a huge win, depending on inflation rates.