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Real estate can be a store of value. It needs to be sold to liquidate the money tied up in it, but that could be years in the future. Having it sit empty until
by onion2k 5y ago
Real estate can be a store of value. It needs to be sold to liquidate the money tied up in it, but that could be years in the future. Having it sit empty until then doesn't stop the investment from working.
- WalterBright 5y agoVacant real estate can be quite a drain on your money. Vacant houses, for example, attract squatters, thieves and vandals. They still cost property taxes, insurance, upkeep, and your time.
- onion2k 5y agoIf you buy a $5m house in a place where the property prices double in 10 years (eg some parts of London), it can still be worthwhile no matter what else happens.
- WalterBright 5y agoIt's even more worthwhile to collect rent on it for 10 years. How much rent can you accrue in 10 years on a posh $5m house? A price doubling in 10 years is only a 7% rate of return, which is below what the stock market in the US averages. (Prices may double, but you've got inflation, taxes, insurance, vandalism, theft, maintenance expenses, and non-trivial amounts of your time in the meantime. None of this is free.)