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You bring a good point, but leveraging is absolutely required to make housing an even close to acceptable investment. All the recurring and one time fees take
by goalonetwo 3y ago
You bring a good point, but leveraging is absolutely required to make housing an even close to acceptable investment.
All the recurring and one time fees take away from the leverage.
Playing with the buy or rent calculator from the NYT shows you how leverage is an absolute necessity:
https://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html https://www.nytimes.com/interactive/2014/upshot/buy-rent-cal...
- runako 3y ago> leverage is an absolute necessity Yes, in more ways than one. To juice returns, sure. But the main reason people lever into real estate is because they don't have the cash to buy. So most homebuyers enter into a favorable high-leverage asset whose gains are given preferred tax treatment. Discussing residential RE as if leverage is optional is not useful.
- goalonetwo 3y agoSure, but discussing it as a "juicy" investment that returns 5x the upside because you are leveraged 5x is also a false narrative that doesn't include all the fees and costs.
- kevinventullo 3y agoNot to mention risks!
- epistasis 3y agoReal estate, at least the land aspect of real estate, should never be an investment. It leads to misallocatiom of resources and rentierism. The only aspect of "investment" should come from proper maintenance of structures, and replacing structures with greater density as soon as the land values justify it. Home ownership as investment has been a generational disaster