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This article is idiotic. If I miss out by 65K a year that means prices are advancing insanely. How can that be sustainable? We've seen what happens when banks p

This article is idiotic. If I miss out by 65K a year that means prices are advancing insanely. How can that be sustainable? We've seen what happens when banks printing money through land runs ahead of productivity. You get a huge crash and the govt bailout begins. We badly need a change in the way land wealth is taxed and in the way we issue money. Without this land prices will always rise to soak up all productivity gains. Today is the anniversary of the peasants' revolt in the UK, by the way.

r00fus 11y ago
While what you said is likely true, the fact remains that if you're not "profiting" from the problem, everyone else is doing so on your behalf. If everyone else takes a step forward, it's as if you took a step back.
- daenz 11y ago
  Everyone else isn't taking a step forward though, though this article would like to convince us of that. And even if they were, if the step forward means less job and location mobility, then I don't mind a step "back."
- 7Figures2Commas 11y ago
  If your goal is truly to profit, buying a single property is far from ideal. You don't need to buy a house to profit from these markets. You can buy any number of REITs that own single and multi-family properties, mortgage REITs, homebuilder stocks, closed-end funds with exposure to real estate, leveraged products like ETFs and ETNs, etc. Most of these securities produce income. As an extreme example, there's a UBS ETN with the ticker MORL that tracks a global mortgage REIT index. It offers 2x leverage. It currently has a 20%+ yield and distributions are paid monthly. Is there risk? Sure. But unlike a house, you can exit your position with a few keystrokes. The great thing about investing in real estate through securities like this is that when the market slows or changes trend, you can sit on the sidelines or go short.
  - usaar333 11y ago
    The downside of real estate ETFs is you don't see the mortgage interest deduction which can decrease the house payments by ~20% (depending on tax bracket).
    - prostoalex 11y ago
      This assumes the tax opportunity is zero. What if you take the net amount you would've saved and stick it into an IRA?
      - usaar333 11y ago
        IRAs are going to beat returns on buying a house any day. I'm thinking about what to do beyond the contribution maximum ($18k/year).
        7Figures2Commas 11y ago
        If you are self-employed, you can set up a solo 401(k). The $18,000 you refer to is the limit for elective employee deferrals. You can contribute 25% of your self-employment compensation (20% if you're a sole proprietor or have a single-member LLC) as an employer profit sharing contribution. In total, between employee and employer contributions, you can contribute a maximum of $53,000/year. The great thing about a self-directed solo 401(k) is that you can purchase physical real estate in the retirement (speak to qualified counsel about the rules). Also, if you want to buy a home, you can borrow up to half of your 401(k) balance (to use as a down payment) and, if your plan allows, the repayment term for a loan used to purchase a primary residence can typically be extended beyond five years (the typical term).
    - 7Figures2Commas 11y ago
      The mortgage interest deduction is for most people overrated. I believe only about half of homeowners actually claim it, and I recall that the average deduction was around $2,000/year. Again, if your interest is in profit, real estate-related investments are hard to beat for the average person, especially if you hold them in tax advantaged retirement accounts. Also, consider that with a leveraged product like MORL, which has total annual fees of .80%, you're leveraging at an effective cost of capital you could never get as an individual.
- branchless 11y ago
  I'll take that step back as not to exploit my kids' generation, thanks.

r00fus 11y ago

While what you said is likely true, the fact remains that if you're not "profiting" from the problem, everyone else is doing so on your behalf. If everyone else takes a step forward, it's as if you took a step back.

daenz 11y ago
Everyone else isn't taking a step forward though, though this article would like to convince us of that. And even if they were, if the step forward means less job and location mobility, then I don't mind a step "back."
7Figures2Commas 11y ago
If your goal is truly to profit, buying a single property is far from ideal. You don't need to buy a house to profit from these markets. You can buy any number of REITs that own single and multi-family properties, mortgage REITs, homebuilder stocks, closed-end funds with exposure to real estate, leveraged products like ETFs and ETNs, etc. Most of these securities produce income. As an extreme example, there's a UBS ETN with the ticker MORL that tracks a global mortgage REIT index. It offers 2x leverage. It currently has a 20%+ yield and distributions are paid monthly. Is there risk? Sure. But unlike a house, you can exit your position with a few keystrokes. The great thing about investing in real estate through securities like this is that when the market slows or changes trend, you can sit on the sidelines or go short.
- usaar333 11y ago
  The downside of real estate ETFs is you don't see the mortgage interest deduction which can decrease the house payments by ~20% (depending on tax bracket).
  - prostoalex 11y ago
    This assumes the tax opportunity is zero. What if you take the net amount you would've saved and stick it into an IRA?
    - usaar333 11y ago
      IRAs are going to beat returns on buying a house any day. I'm thinking about what to do beyond the contribution maximum ($18k/year).
      - 7Figures2Commas 11y ago
        If you are self-employed, you can set up a solo 401(k). The $18,000 you refer to is the limit for elective employee deferrals. You can contribute 25% of your self-employment compensation (20% if you're a sole proprietor or have a single-member LLC) as an employer profit sharing contribution. In total, between employee and employer contributions, you can contribute a maximum of $53,000/year. The great thing about a self-directed solo 401(k) is that you can purchase physical real estate in the retirement (speak to qualified counsel about the rules). Also, if you want to buy a home, you can borrow up to half of your 401(k) balance (to use as a down payment) and, if your plan allows, the repayment term for a loan used to purchase a primary residence can typically be extended beyond five years (the typical term).
  - 7Figures2Commas 11y ago
    The mortgage interest deduction is for most people overrated. I believe only about half of homeowners actually claim it, and I recall that the average deduction was around $2,000/year. Again, if your interest is in profit, real estate-related investments are hard to beat for the average person, especially if you hold them in tax advantaged retirement accounts. Also, consider that with a leveraged product like MORL, which has total annual fees of .80%, you're leveraging at an effective cost of capital you could never get as an individual.
branchless 11y ago
I'll take that step back as not to exploit my kids' generation, thanks.