Just running these very numbers while staying in Honolulu. Real Estate is about as safe of an investment as anywhere in the world (USA rule of law, remote work trend, truly a paradise), but the prices well reflect that!

I would say it's about 3 million to get an average house in a nice location, and 1 million USD really gets you a pretty worn out house built in the 70s or before. A small lot with a tear down is 1 million in a nice neighborhood.

So why not rent and invest simultaneously in something that performs better? 3 million * 8% gives you a budget of $20K per month, and with that you are now looking at prime ocean front real estate, 5000 sq ft, pool, modern renovation, while paying none of the taxes, and on the hook for none of the upkeep.

The downside: you won't have the stability/peace of mind of ownership, and may get squeezed in a rental shortage,

However, it seems more often to me, you are able to get a deal from someone who is using the property as a store of value (huge embedded cap gains they don't want to realize) but isn't getting the occupancy use out of it. An empty 5 million + property has quite the carrying cost if sitting empty.

I, for one, will likely never invest in real estate again, and agree with Nick's analysis.

(Exception: if you truly love it, have the cash, and must own the property). Also, some markets have undeveloped rental offerings and owning can be a better deal.

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What if you use real estate not as a place to live but a place to rent? You basically use the rent to pay your mortgage and accumulate wealth. You are inflating your income no? This is something stocks (or bonds) are not able to offer you right?

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Your computation of return forgot two key elements :

* you can live in real estate, meaning that your real estate earns you a virtual rent every month. This is especially true for middle class people who buy real estate somewhat adjusted to what they would rent

* the "ghost income" from the "ghost rent" does not show on the taxman's radar, unlike the investment income you need topay rent.

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What do you think about hybrid model like Divvy (https://www.divvyhomes.com/) ?

In theory, you could sell the land ownership, but keep the rise to use / home built.

It would allow a smaller investment, on a clearly depreciating asset (home), but you can keep the freedom (and some investment returns) to re-model, re-decorate.

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This is really dependent on your local prices/rates, also it's impossible to have 10:1 leverage on 30k$+ on any other investment.

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Or you can buy property because ownership means more than just finding a place to live. Of course, if the article was actually answering what the hyperbolic title purports it would consider this and a lot of other things that have nothing to do with using real estate as an investment vehicle.

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While Bush played a part in the house crash, Clinton did as well, per: https://www.cbsnews.com/news/heres-what-really-caused-housing-crisis/

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Real estate is as much of a lifestyle choice as it is an investment. This took me a long time to realize but it's the conclusion I've come to. I'm not a house owner myself, but realize that if I one day want to enjoy the freedom to re-model, re-decorate my living space as I wish, as well as removing the dependency on a landlord who could decide to change terms/sell or other uncertainty building events, then I will have to buy. Yes, it's not a superior investment (but with the right leverage, it's not a terrible investment either) but it can be a real lifestyle choice.

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