Quote:
Originally Posted by Dantilla
I like real estate, for the same reasons you like cars-
I control the value. It is tangable, whereas stock values are determined to a great extent by the emotions of "the market", where prices can fluctuate greatly on a whim.
Real estate always has intrinsic value. It will never be mis-managed to the point where it becomes worthless like a penny stock, or lose all value through a bankruptcy, as occasionally happens with stocks.
Like cars, in real estate you make money when you buy, not when you sell. I've yet to loose money on a fixer-upper, but I understand the difficulties of the current market- I quit buying fixer-uppers when the housing market got too hot, as there were no bargains to be purchased. Now that the bubble has burst, and the "masses" are fleeing real estate, it's time to find bargains once again. Good money to be made right now in single-family real estate.
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There is so much wrong with this ^^^, where does one begin?
Prices at the beginning of 2012 were getting below the cost of replacement. In other words you could not build it for what it was selling for. Then the FED stepped in and started buying $45B USD in Mortgage backed securities EVERY MONTH, which put a floor underneath RE which caused it to rebound to the level that we currently see. Do you think that this is a REAL market?
The problem with RE is that it is an illiquid investment, where the bottom can drop right out...This has happened in 1980, 1990 and again in 2008. This time it is three strikes and you are out. As no matter what the Central Banks concoct with regards to Monetary Policy they have not been able to resuscitate a moribund economy. Both the EU and Japan are in deep deep trouble, Japan after a 1 qtr rebound has once again slipped back into recession and it is the same for the EU which is on the verge.
The question that I have to ask is, have you been doing this for over 40 years? If you have then you will have known when RE was not an investment but an overhead expense as a place to live. (Rental Property is a different animal as it creates cash flow and as such can be considered to be an investment). Otherwise you have only seen RE in an aberrational period of inflation, which was the goal of monetary policy. Now that monetary policy has failed, and deflation is occurring all around us as America is tapped out.
Going even further back in time to the Great Depression, RE prices collapsed. I am sorry but we control NOTHING, not even when we have to take a dump...