One of the differences is you c can liver in the investment. This means either not paying rent or collecting rent. The appreciation might be lower than the stock market but dividends are less than rent too.
Americans still think they can make money flipping houses
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Re: Americans still think they can make money flipping houses
#22Easy way to save money when selling a home is to just sell it yourself. Real estate agents are, imho, one of the most useless professions. All you need is a real estate attorney, which you’d need one anyway.
Re: Americans still think they can make money flipping houses
#23This isn’t 2008, at this point I think people are underestimating the speculative home buyer. The people who are buying houses now are more likely people looking to build rental income cash cows. In a world where productivity is somewhat slowing after massive growth, people are taking to rent seeking activity and the disincentives aren’t there to encourage productive behavior. Why buy and sell when you can buy, charg…
Eventually, people just move away. US states with a high cost of living have lost millions of residents to low cost of living states during the last 10 years, to the point when California and New York are about to lose an electoral college seat each. And, yes, California and New York landlords are partially responsible for that for the reasons mentioned above. The financial industry is moving away from the northeast…
Property taxes,income taxes, fuel taxes, high utilities costs all limit growth of prices in blue states.
Re: Americans still think they can make money flipping houses
#24We bought our house about 20 months ago, the guy bought it at auction for about 50k and sold it to us for 179k (and now it's worth 230-245k because of the past 2 years) after having flipped the one across the street soooo, I mean...
Re: Americans still think they can make money flipping houses
#25House price fluctuation is still local market dependent. People who purchased overpriced, new mass developer homes in saturated newer markets may suffer a contraction. Areas with supporting high demand, low inventory, and inability to develop newer properties will maintain increasing valuation, but not at the same rate. A savvy home flipper can still make money, it's just harder to do so with increased competition in…
> Areas with supporting high demand,
But most people think that this is an accurate description of their local market, and I'm not so sure that it is.
Re: Americans still think they can make money flipping houses
#26This isn’t 2008, at this point I think people are underestimating the speculative home buyer. The people who are buying houses now are more likely people looking to build rental income cash cows. In a world where productivity is somewhat slowing after massive growth, people are taking to rent seeking activity and the disincentives aren’t there to encourage productive behavior. Why buy and sell when you can buy, charg…
This is exactly what happened in Israel. Everyone who bought houses have doubled or tripled their investment in three decades.
Re: Americans still think they can make money flipping houses
#27Housing is unique in that it is one of the few, maybe the only, assets where leverage in the form of a loan is relatively easily available to even people without a lot of assets. Where as other forms of leverage like margin loans require the borrower to already have assets for collateral. To buy a house you basically just need a reasonable job and a few thousand for the down payment.
Because taxpayers subsidize it by accepting looser underwriting standards.
It’s subsidized regardless. There are countless tax incentives for homeowners.
Re: Americans still think they can make money flipping houses
#28Re: Americans still think they can make money flipping houses
#29This isn’t 2008, at this point I think people are underestimating the speculative home buyer. The people who are buying houses now are more likely people looking to build rental income cash cows. In a world where productivity is somewhat slowing after massive growth, people are taking to rent seeking activity and the disincentives aren’t there to encourage productive behavior. Why buy and sell when you can buy, charg…
> This isn’t 2008, at this point I think people are underestimating the speculative home buyer. The people who are buying houses now are more likely people looking to build rental income cash cows.
I agree that most people investing in real estate aren't hoping for the underlying asset to significantly appreciate in value. Real estate pays significant dividends (more than stock), and you can be confident that it will provide a hedge against inflation.
Owning real estate also has a lot of tax advantages over stock (you can write off upkeep expenses and you can do a 1031 exchange, for example).
Re: Americans still think they can make money flipping houses
#30It is an amazing contrast with the situation when I was younger. House prices were bounded by wages and were understood to be depreciating assets. That is, without constant investment they lost their value and became unusable and difficult to trade. Even in the best of times it takes time, preparation, and fees to sell real estate. Landlording was a rich person's game because of the risk involved and if you really wa…
What area are you referring to where housing was understood to be a depreciating asset?
Though that’s true in the literal sense, there are only a handful of instances in American history where they was empirically the case.
Not to mention you don’t specify a locale which is the most important thing in real estate, heck, these days perhaps a neighborhood.