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> Realistically, real estate should not be very good investment. Real estate isn't a particularly attractive investment, even in the best of times. Single fami
by zhdc1 5y ago
> Realistically, real estate should not be very good investment.
Real estate isn't a particularly attractive investment, even in the best of times. Single family homes net around 8%, which is 2-4% less per year than what you would expect to get with an index fund. This is with leverage. It only becomes lucrative when you have a change in interest rates (lower mortgage payments leads to higher cash returns), demand (which is why AirBnB rentals are so popular), or regulations.
Of course, the occasional property will sell for well under market, but so will any other type of asset.
> Maybe it should generate 1-2% a net per year and in 50-100 year timeframe depreciate to zero.
I think you're suggesting that real estate should have a lower annual return than other forms of investing, which I agree with and - in general - is what actually happens.
- mrep 5y agoThere is actually less than a 1% difference and residential real estate is far far less volatile and that is for post 1950. Before 1950, real estate did better than equities [0]. [0] Table on page 15 from the pdf: https://news.ycombinator.com/item?id=19817584 https://news.ycombinator.com/item?id=19817584