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You're making several assumptions about how real estate investment works in real life. As someone who dabbled in real estate and might do more in the future, I'

You're making several assumptions about how real estate investment works in real life. As someone who dabbled in real estate and might do more in the future, I'll see if I can help: 1. All real estate is local. The US is FAR from a homogeneous market. Most real estate investors buying single-family homes are NOT buying $1 mil houses in coastal states. They are buying 5- and low 6-figure houses in suburbs of growing or stable inland cities. 2. Analyzing real estate investments is not at all like analyzing a purely financial instrument like a bond. Practically none of the numbers are set in stone and every single deal is different from the next in every way you can imagine. It takes a lot of education, practice, and some experience to get good enough at this to not lose your shirt. 3. All successful real estate investors are also good at networking. They go to meetups, they have mentors, they hang out with each other and share information. They form amicable business relationships with real estate agents, contractors, and property managers. 4. There are many kinds of real estate investors, each with their own set of goals, skills, and strategies. It is virtually impossible to just copy whatever someone else is doing and do it well because you are not them. Some investors are at it full-time and end up being multi-millionaires. Some investors want extra income to supplement their full-time job or pay for their kids' college tuition. Some are retired and want a way to grow their nest egg. Some just want the park their cash in an appreciating asset for a few years. Some are good at finding properties well below market rates, some are good at negotiating, some are good at renovating homes at low cost, some are good at being landlords. ALL are good at analyzing deals. You have to figure out what you are good at and whether those things can help make you successful. If this is something that truly interests you, I would suggest reading a few introductory real estate investment books from well-regarded authors and hanging out on the Bigger Pockets forums. There is a staggering amount to learn and it's not for everyone.

chenster 3y ago
Thanks for sharing. How about purchasing home for primary resident? Most people who buy home for personal residence believe they are making a sound investment. I contend that the opposite is the case.
- bityard 3y ago
  Most personal finance experts recommend viewing your primary residence as a liability, not an investment. Although housing prices generally increase over time, it's never a guarantee. Plus, you are always paying something on it over the course of ownership, such as mortgage interest, taxes, maintenance costs, renovation costs, utilities, etc. Over the time that you live in the house, those costs can (and often do) outpace the gains made by a rising real estate market. There is a sub-branch of real estate investment, however, that has come to be known as "house hacking" where you explicitly DO treat your primary residence as an investment. Typically this includes buying a home larger than you need and renting out the extra space to roommates. Or buying a duplex and renting the other half. Purchased right, these can cover the cost of the mortgage, meaning you're sort-of living in your own home rent-free. Another thing people do is move into a run-down house bought at a discount, live in it for two or three years, fix it up the whole time, sell it at a profit, and then move onto the next one. Neither of these are usually palatable to those with families, but they are pretty popular as a way to get into real estate investing for those that are young, motivated, and have otherwise stable jobs.
- syndicatedjelly 3y ago
  A lot of people in America use the word “investment” to mean something more holistic than just “financial investment”. A house is commonly referred to as: - An investment into the future (guaranteed housing, assuming they can pay the bills) - An investment for their children (safe neighborhoods, good schools, etc) - An investment into the community (homeowners tend to stay in their house for much longer, and are more interested in participating in community politics as a result) You seem to be fixated on houses as a financial investment. They aren’t a great investment, you’re right. But you also can’t keep yourself warm and children sheltered with a million dollars in stocks.

chenster 3y ago

Thanks for sharing. How about purchasing home for primary resident? Most people who buy home for personal residence believe they are making a sound investment. I contend that the opposite is the case.

bityard 3y ago
Most personal finance experts recommend viewing your primary residence as a liability, not an investment. Although housing prices generally increase over time, it's never a guarantee. Plus, you are always paying something on it over the course of ownership, such as mortgage interest, taxes, maintenance costs, renovation costs, utilities, etc. Over the time that you live in the house, those costs can (and often do) outpace the gains made by a rising real estate market. There is a sub-branch of real estate investment, however, that has come to be known as "house hacking" where you explicitly DO treat your primary residence as an investment. Typically this includes buying a home larger than you need and renting out the extra space to roommates. Or buying a duplex and renting the other half. Purchased right, these can cover the cost of the mortgage, meaning you're sort-of living in your own home rent-free. Another thing people do is move into a run-down house bought at a discount, live in it for two or three years, fix it up the whole time, sell it at a profit, and then move onto the next one. Neither of these are usually palatable to those with families, but they are pretty popular as a way to get into real estate investing for those that are young, motivated, and have otherwise stable jobs.
syndicatedjelly 3y ago
A lot of people in America use the word “investment” to mean something more holistic than just “financial investment”. A house is commonly referred to as: - An investment into the future (guaranteed housing, assuming they can pay the bills) - An investment for their children (safe neighborhoods, good schools, etc) - An investment into the community (homeowners tend to stay in their house for much longer, and are more interested in participating in community politics as a result) You seem to be fixated on houses as a financial investment. They aren’t a great investment, you’re right. But you also can’t keep yourself warm and children sheltered with a million dollars in stocks.