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Discount rates and property taxes make it relatively infeasible to buy that land and turn a risk-adjusted profit - especially since the margin for error is so s
by gwern 10y ago
Discount rates and property taxes make it relatively infeasible to buy that land and turn a risk-adjusted profit - especially since the margin for error is so slim (a few hundred horizontal feet one way, your properties are a 100% loss, a few hundred feet the other way, you lose much of the waterfront premium). Compared to investing in a stock index at 5%+, the idea is nowhere near worthwhile; you need to find land which would at least double or triple in value just to try to profit at 10-20 years out, and even more if you are planning 20+ or taking into account the carrying costs & risk.
- kmonsen 10y agoTo be honest, I think it is fairly unpredictable what will happen with stock values if there is strong global warming. And if government breaks down having anything might not be worth much unless you have an army to defend it.
- gwern 10y agoIn the long run, equities have always outperformed real estate, regardless of climate or weather events: companies and peoples can move, pieces of land cannot. And 'Mad Max' scenarios are currently not projected to happen anytime remotely soon if ever.
- M_Grey 10y agoTo be fair, 'Mad Max' isn't something you project, it's an overly optimistic post-script to a total nuclear exchange. It may be that pressure from climate change and poor coping mechanisms on an international scale could lead to said nuclear exchange, although I certainly hope not.