Real Estate in a “Normal” Market

[(former)FormerSanDiegan]

I like RE as a long term investment, but you have to buy right. AS JWM point out, it has simply been too expensive relative to rent since about 2003.

[bsrsharma]

real estate is traditionally a horrible investment over the long-term.

Not for us. We did well, thank you. But we are renting now. We will buy again towards the mid to end of the coming recession.

[bsrsharma]

real estate is traditionally a horrible investment over the long-term.

Not for us. We did well, thank you. But we are renting now. We will buy again towards the mid to end of the coming recession.

[bsrsharma]

real estate is traditionally a horrible investment over the long-term.

Not for us. We did well, thank you. But we are renting now. We will buy again towards the mid to end of the coming recession.

[New Guy]

I agree with most of the responses. My point is that if someone buys a home in 3-4 years (i.e., at “corrected” prices)with my scenario, housing is a great investment over the long term. The cyclical gains and losses will yield an average rate of return of about 4% over time.

[New Guy]

I agree with most of the responses. My point is that if someone buys a home in 3-4 years (i.e., at “corrected” prices)with my scenario, housing is a great investment over the long term. The cyclical gains and losses will yield an average rate of return of about 4% over time.

[New Guy]

I agree with most of the responses. My point is that if someone buys a home in 3-4 years (i.e., at “corrected” prices)with my scenario, housing is a great investment over the long term. The cyclical gains and losses will yield an average rate of return of about 4% over time.

[surveyor]

Appreciation

The 4% appreciation is only one aspect of the return on real estate. When you take into account the other aspects, your return on your real estate scenario above (rough numbers only of course) translates to about 9.5% return on investment.

(although your scenario does have a negative cash flow of about $1000 per month, which might be a little bit high because of the assumed $2000 rent).

[surveyor]

Appreciation

The 4% appreciation is only one aspect of the return on real estate. When you take into account the other aspects, your return on your real estate scenario above (rough numbers only of course) translates to about 9.5% return on investment.

(although your scenario does have a negative cash flow of about $1000 per month, which might be a little bit high because of the assumed $2000 rent).

[surveyor]

Appreciation

The 4% appreciation is only one aspect of the return on real estate. When you take into account the other aspects, your return on your real estate scenario above (rough numbers only of course) translates to about 9.5% return on investment.

(although your scenario does have a negative cash flow of about $1000 per month, which might be a little bit high because of the assumed $2000 rent).

[bsrsharma]

return of about 4% over time.

If you buy low and sell high, you can do much better, especially if you add tax savings & mortgage leverage. And unlike stocks, it is not hard to see recessions and asset bubbles. Things move at glacial speeds. I definitely like this better than stock market investing.

[bsrsharma]

return of about 4% over time.

If you buy low and sell high, you can do much better, especially if you add tax savings & mortgage leverage. And unlike stocks, it is not hard to see recessions and asset bubbles. Things move at glacial speeds. I definitely like this better than stock market investing.

[bsrsharma]

return of about 4% over time.

If you buy low and sell high, you can do much better, especially if you add tax savings & mortgage leverage. And unlike stocks, it is not hard to see recessions and asset bubbles. Things move at glacial speeds. I definitely like this better than stock market investing.

[POZ]

Dont forget about the opportunity cost of owning a home, THIS is the real value in home ownership. Its easy to get caught up in the investment, appreciation, and return on investing for everything. Isnt that how we got into this mess in the first place?

[POZ]

Dont forget about the opportunity cost of owning a home, THIS is the real value in home ownership. Its easy to get caught up in the investment, appreciation, and return on investing for everything. Isnt that how we got into this mess in the first place?

[Author]

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