Quote:
Originally Posted by Crawford
Weird. Why would anyone buy cash-flow negative RE when they could just put cash in a basically no-cost, nothing-to-manage index fund that generates averaged 10% returns forever?
RE returns are irrelevant unless you're constantly flipping, which sounds like an extremely dangerous game. And getting killed in the interim.
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Because value can increase, and RE can be relatively stable.
And (this is big) because you can buy with heavy leverage. You're making money on the whole value, not just the amount you've paid so far.
And because even negative cash flow might be temporary.