All Forum Posts by: Eric James

 You have pointed out possible benefits of using leverage and renting out an asset, both of which are not specific to real eatate.  These possible benefits are separate from whether real estate itself appreciates at a higher rate than inflation. 

 Yes, specifically with rental real estate your tenants will (hopefully) pay all costs associated with the property.  But that isn't a characteristic of real estate in general. As you say, for those not renting out their real estate the financing costs reduce profit from increased value. 

Property taxes can also be a high expense in some places. I knew a woman who sold her primary residence in NYS for $50k higher than her original purchase. When I pointed out she had paid  $5k/year in property taxes each year, her reply was "I don't want to think about that."

 Yes, that can be done with real estate. That's what makes real estate investing worthwhile to me. But that is also essentially what someone is doing when they buy any underperforming business (of any size) and increase the profitability. 

 That's correct. Except you're not including the cost of the financing. For example, if you're paying 5% interest on the financing. You're gain from leverage is only the difference between financing costs and the increased real estate value.

One stated benefit of investing in real estate is price appreciation.  However, if you look at inflation adjusted real estate prices for the most part there isn't much appreciation.  There are specific points in time like 2006 (we know what followed that) and right now when real estate exceeds inflation adjusted prices. However,  over the long term it doesn't really appear that real estate appreciates much beyond inflation. Is real estate appreciation a myth?

https://www.supermoney.com/inf...

If you're in San Antonio I live about a 4 hour drive from where you are.. I have a crew of guys that I used for renovations on BRRRs and now new construction.  I pay less skilled guys $20-22/hour and more skilled $25-27. I have one guy who is a foreman or sorts, but I need to supervise them myself as well. We were able to build new construction for $35/square foot in labor cost. I don't know if you consider that reasonable or not, but it works for me.

Take a couple years to seriously learn about real estate. By then you'll know which way inflation and interest rates are headed and whether you should buy or not.

Only possible ethical issue I see (if you have not mistakenly described the situation) is if the listing realtor refused to provide information to their client.

The idea that because some people don't like something (STRs) that makes it "immoral" is modern snowflake morality. City planning isn't an issue of morality.