Posted by tmladucky on 26th of Jul 2024 at 04:01 pm
I agree with you - banks don’t want to pay the taxes, do
maintenance, pay utilities or special assessments, insurance, HOA
fees, etc. over time. All those expenses don’t reduce capital
gains for the homeowner, but impact any real gains. Although,
We have to live somewhere and for the most part, real estate does
go up with inflation
Posted by DigiNomad on 26th of Jul 2024 at 04:12 pm
Yes. I was in a 1 year / 2 semester, 2 hours per class, 5 days a
week CFP study group back in the day and we debated this topic
hotly on quite a few occasions. The consensus was mostly that
residential RE is not a great investment...probably break even or
worse given all the data. However, we also decided that it was
probably better for Americans be in it anyway because it's a form
of forced savings, even if the return profile is slightly negative,
on average. Americans are notoriously bad at saving, so this
form of forced savings has benefited them greatly. Nothing wrong
with knowing your weaknesses and using a gimmick to get around it
instead of actually addressing the root problem....it typically
works out.
The pain to reach "consensus" was no joke though. People tend
to lose their minds when you first suggest that RE is not a great
investment.
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I agree with you -
I took a long on this amazing triangle, tight stop ...
Posted by tmladucky on 26th of Jul 2024 at 04:01 pm
I agree with you - banks don’t want to pay the taxes, do maintenance, pay utilities or special assessments, insurance, HOA fees, etc. over time. All those expenses don’t reduce capital gains for the homeowner, but impact any real gains. Although, We have to live somewhere and for the most part, real estate does go up with inflation
Yes. I was in a
Posted by DigiNomad on 26th of Jul 2024 at 04:12 pm
Yes. I was in a 1 year / 2 semester, 2 hours per class, 5 days a week CFP study group back in the day and we debated this topic hotly on quite a few occasions. The consensus was mostly that residential RE is not a great investment...probably break even or worse given all the data. However, we also decided that it was probably better for Americans be in it anyway because it's a form of forced savings, even if the return profile is slightly negative, on average. Americans are notoriously bad at saving, so this form of forced savings has benefited them greatly. Nothing wrong with knowing your weaknesses and using a gimmick to get around it instead of actually addressing the root problem....it typically works out.
The pain to reach "consensus" was no joke though. People tend to lose their minds when you first suggest that RE is not a great investment.