Quote:
Originally Posted by Rerun
I don't know but I wouldn't be surprised if, on average, real estate has a higher return than stocks or bonds.
Plus, with real estate you get to easily leverage your money.
Fyi, the house I bought last August of 2009 for $440,000 was originally built and sold for $280,000 in 2004.
Say the original owner put a down payment of 10% ($28,000). On their original investment of $28,000 they made a profit of $132,000 (not taking into account RE fees) in 5 years!
There is no way I could invest my money into stocks or bonds and make a 471% return on my money in 5 years.
|
I read an article recently that long term stocks are better investments than real estate. Real Estate beat inflation by a few percentage points while if you invested in the market over the same period you would have been several points higher. I'll see if I can track the article down.
Real estate in the past few years isn't the norm based on historical averages. 2004 to 2008 was ridiculous boom that wasn't and isn't sustainable. The original owner of your place is the winner. You buying the house this past summer based on historical stats are probably not going to win. That being said you need a place to live etc. and if it wasn't your first house you were already in the market. If not, then that's the fact of life and tough to time the housing market.
You can also leverage on stocks though if you aren't an expert probably not a great idea.