Article - Don't view a house as an investment

[Emeritus]

I'm kind of "buy and hold" myself. My parents bought the house in 1957, we bought it from them in 1977. Big renovation in 87. Not much since.
Same employer for 35 years (full and PT)
Same wife 35 years
Same house 33 + 20 years

 

[Danmar]

Lifestyle choice not an investment. Most people make any real estate money on the depreciation on the mortgage, I think.

 

[Koolau]

I think the RE business (whether doing rentals, or flipping, etc.) has a certain amount of (for want of a better term, "luck"), but more importantly, "talent", skill and experience. I know a guy who made a fortune selling tractor tires out of his pole barn. He started small, found and put dealers/farmers together and took a 20% (minimum) to 40% profit on most sales. The way he explained it, it was "easy" money. I'd no more try that than flipping houses. Still, some folks are just geared for doing that kind of stuff. I say, more power to them! Sounds like calmloki has it figured out. More power to him!!! Just not my thing. But I do LOVE to hear the stories of folks who can make such things work for them.

Me, I did it the "old fashioned" way, w*rking for the man!

Full disclosure: I did buy a property (here in paradise) and rented it out for 25 years in preparation to claim my little piece of paradise. I doubt we made any money on it, but it was our way to stake our claim and not be priced out of the market. I know we were WAY under market in our rent for 20 of those 25 years (we doubled the rent when our long-term tenants finally went to the other Paradise.) Shows how some folks know what they're doing and others don't - in all fields of endeavor.

If RE in general and "flipping" in particular are "w*rk" as has been suggested, calmloki loves his w*rk and is good at it!

 

[haha]

Another way real estate is different from stock and bond investing is that there is a fair amount of leverage, and once you get out of your own home, you are generally on the hook for the loans. Of course as time goes on, and you have so far survived, you could throttle back rather than go on betting it all back. But plenty of very wealthy RE estate investors have thrown craps fairly late in their careers.

That, and it is not possible to succeed over cycles and be poorly informed or inattentive or lazy. Whereas with index investing, you get whatever is to be gotten. And I think it is also not advisable to rely too much on the "way things are sposed to be".

But it must be a lot more fun than the torture that many of the corporate types on the board have described. I did just a few things in this area, and I think were I going through again I would make that my career too. I also admire the activist real estate investors on the board.

Ha

 

[HFWR]

I have not seen my place from an investment view point.
Considering current economic turmoil, is it safe to say we are heading towards deflation? Houses have never been so cheap in the past.

To lazy to look it up, but I'd think, even at current reduced prices, that house prices are a larger portion of median wages than the historical average.