Quote:
Originally Posted by Winsor_Pilates
A few examples I see all the time:
1) Identifying up & coming areas before they gain mainstream traction.
2) Buying a property that is likely to get rezoned for higher density. There's many houses in Vancouver that went 4 or 5 times value along Cambie Street for example, once they were rezoned for condo density.
3) Buying presale condos through an insider agent. Disclaimer that I do this for a living, but we essentially get first pick, exclusive discounts and the best prices to high demand developments.
On the stock market this would be illegal.
But I do agree a savvy stock picker can do great. I just find there's not as many savvy stock pickers out there and real estate feels easier for a lot of people. It also has far less likelihood of going to zero.
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I kind of see your first and second point. But there are actually many similarities in the stock market to your third point. IPO's are often reserved for preferred bank clients as are warrants and similar restricted share offerings. And make no mistake, insider trading happens every day. It's not always illegal for some people to have better information than others. And even though sometimes it is illegal, it happens anyway.
And also real estate doesn't have to go to zero for people to end up with zero equity. People lose all their money and then some quite often in real restate. You are responsible for short comings when your insured mortgage is foreclosed. So you can actually lose more than all your money.
If stress tests are meant to save people from themselves, I would think a mandatory session with a lawyer who is mandated to explain the risks involved might be a better solution. Educated people in general make better decisions.