Why I love Real Estate
The recent market gyrations have me remembering why it is I got into RE in the first place. Throughout the nineties I was an active investor in the stock market. I also bought various rental properties. Most were small 2 and 3 bed residential properties. The mortgage payments were low and I was able to clear $200-300 cash flow per property. It was slow going but the payments were there every month.
During this time I was socking alot more away in the Nasdaq that I was in RE. I looked like a genius throughout the late nineties- increasing the value of my portfolio nearly 300% over a period of a few years. Then 2000 came...and well we know what happened to the Nasdaq then.
I lost more money in a few months that I could have ever imagined. Why..because I got greedy and went for the quick buck. Appreciation was all I worried about. Meanwhile- my rentals were holding their value...appreciating some...and providing positive cashflow every month. My boring safe investments became my new best friends.
I learned a tremendous lesson from this experience. I swore to myself I would never allow myself to be duped into believing cash flow doesn't matter. After 2000, I went fulltime into RE. Over the next few years I would pick up numerous more rental properties. All providing a boring but steady rate of return. Sure I have some cash in the stock market- but nearly as much as before. I'm convinced the stock market for the most part is nothing more than glorified gambling. In RE...I , for the most part, control my investments value. I can't do that with stock.
So this past week's volatility has reminded me why I do what I do. And why it is I still believe, despite the problems with the RE market, that RE is the very best investment vehicle for long term wealth generation.