 | I will show why real estate is a HORRIBLE investment going forward compared to btc and crypto. I will post this in the real estate and btc forums. 1st off: I made most of my wealth through real estate and still own a rental and airbnb. I am not your uncle Ed who will attempt to convince you real estate works because it worked for him. Real estate works in one of the following scenarios:
and/or has a huge upside appreciation potential.
As I said, I made most of my initial wealth in real estate through real estate appreciation. I was the guy that put 5% down and the place went up 80% so my ROI = 80* 1/20= 1600%. However, real estate will be in general a shitty performer GOING FORWARD for the following reasons: 40% of American real estate has no mortgages and the return on these properties relative to treasuries, let alone the stock market, are less. This means that if the house was sold and the $ put in treasuries, the return would be greater. In QQQ, way greater. Much of American real estate is good for the CURRENT holder because taxes are a joke but the #s will not pass on to the next buyer. For example, I have a relative who has a house worth $1.8. The taxes are $1,200 a year for her. For the next buyer, they will be $1,500-A MONTH. A lot of real estate that is being sold by grandparents and parents will go to investments such as stocks and crypto-that's the direction of money flows for various reasons. These reasons are affordability, qualifying for mortgages, and demographics. Demographics-the generations of 20-40 it's really clear: their need for big houses is much smaller. Many of these people will be single and or have no kids, or 1-2. The days of having 3-4 kids is getting much much more rare. The big house is not desirable. Tenant laws: In many states, current landlords (including myself) are seeing the writing on the wall and will not invest again because the laws are not in their favor. Long term rates: there is an idea that 30 year mortgages might not go back to 3% in a long long time UNLESS there is yield curve control. If that happens, stocks and crypto go ballistic. Airbnb phenomena: One of the big reasons there was a final push in 2021 -2022 was that low rates made airbnbs very interesting investments. Now, the #s make zero sense. Capitulation: be honest, how many people do you know who lost homes in 08 and/or refused to buy fearing a crash in 12,14,15,17, 20, and finally relented in 21? OTHER INVESTMENTS Real estate investing is really about at its core appreciation or humungous cash flow. The issue is that at today's prices NEITHER works. This doesn't mean there is a crash coming. What this means is pricing will pretty much do NOTHING over the next 5 years as sellers slowly start to cut. The issue is that if you are a young person of say 18-24 you will see people who got rich off of real estate-I'm one of them-but what you don't understand is that because prices went so low in 2010-2017 and are so high now, they look like geniuses. But for many who are long term holders of real estate, it's good but not nearly as impressive. Look at this chart and see the value of the guy who bought In 2006-2007 to 2019. NOTHING. Now, look at the differences for tech stocks and even the standard sp500. The real money is being made in secular trends: tech and crypto. Real estate had a nice period where the people who were brave enough to buy the crash got handsomely rewarded. For example, I bought a condo for about $300k in 2013 that is now worth $600k. I put $45k down. My ROI is $300k/45k=660%. The guy I bought it from got it at a 3% mortgage for $200k. The big issue is that now there is no upside because if you bought it today and rented it your return would be LESS than treasuries. The secular trends will continue to attract money as conversations continue and people start to realize their houses are not investments, but in fact prisons that PREVENT THEM FROM INVESTING. THE BIG ISSUE IS THAT REAL ESTATE IS A BET ON TWO THINGS printed money lowering of rates But, if these happen, crypto and tech go up way more I remember as I sold my properties and borrowed against others I was called crazy. For a long time, I thought I was stupid (I still am). However, I remember these arguments against crypto, specifically btc in general: BTC goes up if : DXY goes down, more money printed, lower rates. Well, rates are still high, DXY is 107, there is only a starting of $ to be printed, and it's still high. Housing: 2 years and negative. [link] [comments] |
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