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In places like the Bay Area, property values pretty much never go down in price, and the YoY relative increase is on par with that of index funds. Combine that
by 10000truths 1y ago
In places like the Bay Area, property values pretty much never go down in price, and the YoY relative increase is on par with that of index funds. Combine that with rental income, and you can very likely beat an index fund. Mortgages offer much more leverage than margin loans, which helps offset the upfront capital cost.
- hollerith 1y agoFor decades, property values kept going up in Detroit until they didn't.
- bdangubic 1y agonot just Detroit…
- 10000truths 1y agoThe value of real estate in Detroit was tied to the auto industry. When it fell, so did real estate prices. The Bay Area's value does come in large part from the tech industry, but it's also a very important port of entry for trans-Pacific immigration and commerce, and that's a lot less likely to change IMO. But that's beside the point. Substitute Bay Area with Seattle, Los Angeles, Manhattan, or some other area of your choice. Or, better yet, diversify your portfolio by buying real estate in multiple cities. The same options that are available in the stock investment to tune your risk profile are available in real estate investment as well.