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Odd how few seem to mention property (real estate)? Even those alleging actual returns worth a damn on stock portfolios. Surely the most obvious route on the pl
by usgroup 10y ago
Odd how few seem to mention property (real estate)? Even those alleging actual returns worth a damn on stock portfolios. Surely the most obvious route on the planet is property. For two reasons:
1. It's leveraged. I.e. a bank will usually give you a 4:1 loan (mortgage) to buy property. Interest will usually be close to the central bank rate, so it's about as cheap as a loan gets, especially right now. If you then rent the property you are receiving a monthly return on the leveraged sum having only invested the deposit...
2. Property is an appreciating asset (US,UK,China,FR,etc). It's a systemic matter in many countries because it ties in a large part of an individuals net worth and retirement expectations.
Your 200k leveraged with a mortgage will net you more than most stock portfolios unless either you're Renaissance Capital or you just like a gamble.
- usgroup 10y agoTo put this another way. It's really not difficult to find mom & pop who made 300k on a small property portfolio with no special skills because of systemic capital appreciation, a liquid rental market and leverage(loan/mortgage). You'd struggle to find such a high success rate in any other asset class.
- Rainymood 10y ago>Property is an appreciating asset Isn't this the cause of the housing bubble? If everyone thinks this? Why wouldn't profits be driven out if everyone thinks like this? Simply curious.
- usgroup 10y agoOver-valuation causes bubbles as opposed to appreciating assets. E.g. the common wisdom says equity is a generally appreciating asset class because the expected return over a long horizon is positive. Similar is true of property except that no-one will give you a 40 year loan of 400k for peanuts to go trade the S&P.
- mofeeta 10y agoAre you willing to field some questions via email?
- usgroup 10y agoSure. Leave your email and Ill reach out.