Former (and current real estate investor) tries to convince you to go qqq and crypto, real estate is dead money.
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:
1. The return on investment for a cash purpose is high relative to other investments
and/or
has a huge upside appreciation potential.
2. The property cash flows with the minimum amount down. For example, a 500k place you put 25k down and rent it out and the rents >mortgage, taxes, fees, repairs. The investment you are getting is relatively higher than other investments.
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.
https://preview.redd.it/2zkp85cl298e1.png?width=1718&format=png&auto=webp&s=cf1c41e643119257e069c021dd48a8ab422aa99ehttps://preview.redd.it/p6xv4pvw298e1.png?width=1406&format=png&auto=webp&s=a7790892e1ff42944f01f2d829a5a616d90ab48ehttps://preview.redd.it/ygyheovw298e1.png?width=1454&format=png&auto=webp&s=b981bfa35d322be768c6fdcde9b24aef2c73872a The real
