2 ms·

50-100 year old homes with no maintenance? They probably have had the roof replaced two to four times, windows replaced, siding replaced, furnace/ac replaced s

50-100 year old homes with no maintenance? They probably have had the roof replaced two to four times, windows replaced, siding replaced, furnace/ac replaced several times, egress window wells replaced multiple times, and that's just the beginning. They depreciate very fast and even a 10 year old home without proper upkeep will look shabby. Either way appreciation tends to be pretty close to inflation on average, so you are generally not making 8.75% on top of inflation. That does happen in very specific markets but definitely not in most areas. I own a home for the lifestyle. But I could do far better as a financial investment is concerned.

frumper 3y ago
Some of the appreciation we've seen in the past decade where I live in California far exceeds the maintenance cost. If you own long term, then yes, you're likely to average out much of those costs, but a lot of people are buying for a few years and selling. Unless you put any major repairs into it, you're making out like a bandit, and generally even if you did then you can still make out like a bandit. It isn't sustainable in the long term, but it's the mentality of the past decade.
- nightski 3y ago
  CA (where real estate exploded) is a niche market. It's great if you happen to live there. Most people can't identify a hot new real estate market and then upend their life to move there. There are plenty of years and locations where real estate actually decreases in value as well. If you are moving into a new house every few years that is particularly terrible, because you are throwing away a ton of money in closing costs and selling fees.
  - frumper 3y ago
    Calling California niche isn’t accurate. I don’t live in the Bay Area or LA. It’s a significant population of the country. Aside from that, low interest rates have seen many places throughout the country see home values double, or more, over the last 10 years.
reducesuffering 3y ago
I never said no maintenance. Of course over 50-100 years you're putting ~0.5% / yr into it. Real vs. nominal is important but it also applies to the largest cost which is interest. Interest at 7%, but inflation at 7%, means that loan is effectively free in real terms. I agree there are better investments overall, but when you need to live somewhere, and in the case of looking to secure purchasing power in anticipation of extreme inflation... Better to rely on real goods. Otherwise, you're hoping the high volatility of gold and stocks coincides with your highly increased rent from other owners.

frumper 3y ago

Some of the appreciation we've seen in the past decade where I live in California far exceeds the maintenance cost. If you own long term, then yes, you're likely to average out much of those costs, but a lot of people are buying for a few years and selling. Unless you put any major repairs into it, you're making out like a bandit, and generally even if you did then you can still make out like a bandit. It isn't sustainable in the long term, but it's the mentality of the past decade.

nightski 3y ago
CA (where real estate exploded) is a niche market. It's great if you happen to live there. Most people can't identify a hot new real estate market and then upend their life to move there. There are plenty of years and locations where real estate actually decreases in value as well. If you are moving into a new house every few years that is particularly terrible, because you are throwing away a ton of money in closing costs and selling fees.
- frumper 3y ago
  Calling California niche isn’t accurate. I don’t live in the Bay Area or LA. It’s a significant population of the country. Aside from that, low interest rates have seen many places throughout the country see home values double, or more, over the last 10 years.

reducesuffering 3y ago

I never said no maintenance. Of course over 50-100 years you're putting ~0.5% / yr into it. Real vs. nominal is important but it also applies to the largest cost which is interest. Interest at 7%, but inflation at 7%, means that loan is effectively free in real terms. I agree there are better investments overall, but when you need to live somewhere, and in the case of looking to secure purchasing power in anticipation of extreme inflation... Better to rely on real goods. Otherwise, you're hoping the high volatility of gold and stocks coincides with your highly increased rent from other owners.