Norada Real Estate Investments

  • Home
  • Markets
  • Properties
  • Notes
  • Membership
  • Podcast
  • Learn
  • About
  • Contact

Why Real Estate is Still a Good Investment

July 22, 2009 by Marco Santarelli

Now that the housing bubble has crashed, a growing number of academics, journalists, and financial gurus are trying to reassess the value of real estate as a long-term investment class.

There is a growing — and much needed — consensus that much of the conventional wisdom about real estate as a “great investment” is over-hyped and oversold by the National Association of Realtors who also happen to be a powerful lobbying group, dictating our national housing policy.

The Wall Street Journal's Cheapskate columnist looks at housing and reaches a good conclusion (subscription required), explaining that the real financial return of homeownership comes from not having to pay rent: “That's why you should buy as much home as you need — but no more. A bigger home than you need isn't an investment — it's an extravagance, the equivalent of renting a bigger apartment than you need. You may choose to do so, but that doesn't make it a smart move financially.”

Unfortunately though, Cheapskate also makes a key math error in calculating the return on his real estate investments over the years: “When I constructed a very basic cash-flow model for our home-buying history-selling price minus purchase price, renovations and repairs — it showed a roughly 3.5% annualized return on investment, from 1991 through the summer of last year.”

[Read more…]

Filed Under: Real Estate Investing Tagged With: real estate comparison, Real Estate Investing, Real Estate Investment

Real Estate

  • Atlanta
  • Birmingham
  • Cape Coral
  • Charlotte
  • Chicago

Quick Links

  • Markets
  • Membership
  • Notes
  • Contact Us

Blog Posts

  • 2022 Property Taxes by County: Where do People Pay the Most and Least? [Data Study]
    May 16, 2022Norada
  • Housing Market Predictions 2022 to 2025: Crash or Boom?
    May 15, 2022Marco Santarelli
  • Phoenix Real Estate Housing Market: Prices | Trends | Forecast 2022
    May 15, 2022Marco Santarelli

Contact

Norada Real Estate Investments 30251 Golden Lantern, Suite E-261 Laguna Niguel, CA 92677

(949) 218-6668
(800) 611-3060
BBB
  • Terms of Use
  • |
  • Privacy Policy
  • |
  • Testimonials
  • |
  • Suggestions?
  • |
  • Home

Copyright 2018 Norada Real Estate Investments