4 ms·

The returns are 1% of capital invested, if you invest the $50 million needed to buy a well-located lot today. If your grandfather bought the same lot for $600

by nikanj 7y ago

The returns are 1% of capital invested, if you invest the $50 million needed to buy a well-located lot today. If your grandfather bought the same lot for $600 in 1922, the returns today are quite something. It’s very hard to become a large-scale land owner today, unless you happen to own a time machine.

rficcaglia 7y ago
Not necessarily- but it takes financial savvy and raising capital and a lot of hard work...sorta like building a tech startup. In fact, I had this conversation this week randomly with 2 different groups of former tech execs...they are leaving tech and applying their skills to engineering commercial and residential real estate portfolios...they have each been dabbling for the past few years but now growing disgruntled with tech (not for financial reasons, more quality of life stuff). They each started small ~$50K initially, and use debt and tax law efficiently. They look for underpriced areas across the US (without giving away any proprietary info, mostly Midwest). The returns are consistently well north of 10%, and that includes deals pre-2008. Naturally that may be harder to do at scale. But the point is you don’t need a time machine, you need skills, effort, discipline and focus.
nf8nnfufuu 7y ago
You don't have to be large scale to earn rent. And why not buy something today that can be worth millions for your grandchildren? Because it is not so easy, after all. So you think it is unfair that somebodies grandfather bought land, and it appreciated? Do you think ownership in general is unfair, or what exactly is the unfair part?
- wasdfff 7y ago
  I think its unfair that the source of these gross profits is due to limiting supply to the market and avoiding as much tax burden as possible. Fair would be if anyone could build anything anywhere however high and were taxed according to todays value. Real estate is not a free market, demand is massive and building supply is continually opposed to keep prices high.
  - nf8nnfufuu 7y ago
    Nevertheless, if the rules were known in advance, it seems the game is fair. For example if you ponder buying a plot of land, presumably the rules there would factor into your decision. If there was already a rule of "no skyscrapers", then everybody could have factored that into their decision. It would likewise be unfair to change rules after the fact, because it would devalue people's investments. As for tax rules, I can't comment. But that is a fault of the government, not of the landlords.
    - nikanj 7y ago
      https://www.nytimes.com/interactive/2016/05/19/upshot/forty-percent-of-manhattans-buildings-could-not-be-built-today.html https://www.nytimes.com/interactive/2016/05/19/upshot/forty-... Alas, mostly the rules have changed quite a bit to favour the incumbetents and the grandfathered-ins
      - nf8nnfufuu 7y ago
        and who gets to change the laws? If it is the current residents at the time, maybe that is fair, too?

by nikanj 7y ago

rficcaglia 7y ago

Not necessarily- but it takes financial savvy and raising capital and a lot of hard work...sorta like building a tech startup. In fact, I had this conversation this week randomly with 2 different groups of former tech execs...they are leaving tech and applying their skills to engineering commercial and residential real estate portfolios...they have each been dabbling for the past few years but now growing disgruntled with tech (not for financial reasons, more quality of life stuff). They each started small ~$50K initially, and use debt and tax law efficiently. They look for underpriced areas across the US (without giving away any proprietary info, mostly Midwest). The returns are consistently well north of 10%, and that includes deals pre-2008. Naturally that may be harder to do at scale. But the point is you don’t need a time machine, you need skills, effort, discipline and focus.

nf8nnfufuu 7y ago

You don't have to be large scale to earn rent. And why not buy something today that can be worth millions for your grandchildren? Because it is not so easy, after all. So you think it is unfair that somebodies grandfather bought land, and it appreciated? Do you think ownership in general is unfair, or what exactly is the unfair part?

wasdfff 7y ago
I think its unfair that the source of these gross profits is due to limiting supply to the market and avoiding as much tax burden as possible. Fair would be if anyone could build anything anywhere however high and were taxed according to todays value. Real estate is not a free market, demand is massive and building supply is continually opposed to keep prices high.
- nf8nnfufuu 7y ago
  Nevertheless, if the rules were known in advance, it seems the game is fair. For example if you ponder buying a plot of land, presumably the rules there would factor into your decision. If there was already a rule of "no skyscrapers", then everybody could have factored that into their decision. It would likewise be unfair to change rules after the fact, because it would devalue people's investments. As for tax rules, I can't comment. But that is a fault of the government, not of the landlords.
  - nikanj 7y ago
    https://www.nytimes.com/interactive/2016/05/19/upshot/forty-percent-of-manhattans-buildings-could-not-be-built-today.html https://www.nytimes.com/interactive/2016/05/19/upshot/forty-... Alas, mostly the rules have changed quite a bit to favour the incumbetents and the grandfathered-ins
    - nf8nnfufuu 7y ago
      and who gets to change the laws? If it is the current residents at the time, maybe that is fair, too?