[quote=AN][quote=CA renter]Joe, I agree with you that many of these families think of RE as the ultimate investment, and that they are often well-situated buyers/owners. The problem will be those who buy so many properties that they can’t have just their family members living in them, so they will have to rent them out to locals who might not be of the same caliber as those owners.[/quote]See, while some have a short sighted view on RE investment, other have a much longer view on things. They view RE investment as their retirement nest egg. I know many who are doing just what joec described. They move, keep their old house and rent them out. Now, those who are nearing retirement have 2-3 houses in nice upper middle class area with rent to supplement their retirement. They’ll either acquire more when the time arise or they’ll pass it on to their kids.[/quote]
Right, I totally get this, but it doesn’t change the fact that getting a ~3% yield on RE (maybe, and there are so many things that can go wrong with rentals) is worse than getting a 5-7% yield on Treasuries. Of course, if they don’t trust the Treasury market, then RE is a better bet.
Buying rentals is a good bet when prices are low and interest rates are “normal” or high. I don’t think it will be a good investment for those who are buying high.
