The cult of real estate ownership

They used to work for a Taiwan based company and get the money paid in Taiwan, and some allowance in China.

This is true, but luck can be a factor in any investment, really. If you put that same amount that you put into the property in Taipei in 2009 into the S+P 500 at the same time, I am curious as to which would have come out ahead?

Really though, tht is speculation, not investment, which is different ( this why I HATE the term “play” the stock market in Chinese, andnthatbit is viewed as gambling by many). Long term investment is the buying of a company, through its stock, which is no different than business ownership in many ways.

The opportunity cost is exactly my point - especially considering the length of time for which most are saving.

Also, boomers are in for a shock when they began flooding the markets with their homes Millenials won’t want once they all retire. That might be the time to buy one if the market becomes very weak.

Thats true. Frabkly buying apartment/condo/strata etc seems silly unless speculating and flipping or wabting to personally live in such a way.

I agree with the original poster though would say there is a lot more sense of security owning land. Perhaps depends on the country. But it can be fairly stable and usable. Gold coins, money, banks etc can all be stolen, lost, are only just trading tokens etc. Land can generate income easily. Of course not everyone doea that. I bought acreage back home and the sense of a backup and comfort has allowed me to be far riskier here with investing. Plus it costs nothing being rented out with options to subdivide, rent out another place etc. Also is great asset for getting loans on other projects.

Land is probably one of the more stable units of value, but as mentioned above it often isnt used by the average joe to make money.

I hate renting! The sense of being temporary, moving etc is all quite annoying in my opinion. But i like to build up a nice house and not need to leave. So renting kind of sucks here especially the quality level of housing. I wouldnt ever sink in the money needed to make a rental really nice. Would have to own it.

I read the article, and while interesting, it is misleading. It does not include opportunity cost of saving for a down payment, interest costs of a mortgage, maintenance costs, etc…

I also think that using your primary residence property as leverage is a very dangerous rabbit hole to go down, and generally ends poorly (though there are some success stories for sure).

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I also feel the same way about buying a car. I prefer to lease. Also gives me the ability to change a car every 3-4 years which I like. I might buy some used cars for my personal enjoyment if I know I want to customize it. But these days I don’t look at buying as a good deal.

With full disclosure here, I do actually own my home here in Winnipeg. I managed to buy it with next to no down payment (3%?), and our mortgage payments are less than renting an apartment here, so it makes sense.

Mind you, our mortgage is very small (about 100K US remaining), and we have about $30K in equity or so. For us, it is only about 15-20% of our net worth, and we put the remainder of our available money into investments, rather than our mortgage.

Overall, I find maintaining our house to be a pain in the ass, and I miss just having an apartment where you just make a phonecall and problems are taken care of relatively hassle-free. Mind you, we have generally had good landlords, and decent apartments that were pretty sound-proof.

My whole point of this thread isn’t that real estate is a completely bad investment - it is more so how people can sink ALL of their money just into their primary residence, which is foolhardy, in my mind.

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Stock beats real estate most of the time. However real estate investments are awesome for tax write off purposes. Buying under company name can generate lots of expenses (i.e. depreciation, improvements, maintenance, and management fees…) High income earners get taxed at 40% while corporate tax after all expenses is 17%. Understanding local tax laws is vital to any investment portfolio. Making your children corporate partners can also avoid inheritance and gift tax when passing on real estate properties which is a great way to pass on passive wealth to future generation. Lastly, there is the pride of ownership factor in becoming a landlord. The monopoly board game teaches kids the concept of real estate investment. When some one rolls the dice and steps on your territory (kachinggggg it’s pay day). Having passive income that turns up every month also make anyone sleep better. Real estate investment is only a viable option when it is a rental income generating property.

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My god, we are getting totally rogered in the UK at every angle, in all the holes.

Good time to think about buying in the UK imo.

Remember, this is Winnipeg we are talking about, so there is price to pay in safety, weather, and lifestyle (just type “Winnipeg news” into Google and you will see what I mean).

Most houses here in Winnipeg are in the $250-400K US range - we live on a busy street in a smaller house, which is on the lower end of price in Winnipeg. We intentionally bought a cheaper house to not be house poor and to allow us to put a lot of money into investments and savings.

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Google “London news” :wink: but yeah I see and agree with your point. Sadly basically everyone in the UK banks all their money on property, all in. Hence the market is extremely out of reach for the masses with no savings.

I didn’t realize buying shares in a real estate ETF incurred these costs. Thanks for the heads-up.

I was talking real estate in general, but if you want to play that game, fine. You cherry picked one REIT etf that did well over a certain period of time (interesting that the ticker symbol is not mentioned. Is it VNQ? I am assuming so). VNQ is a US real estate only etf, and only over a ten year period - all time after the 2008 mortgage crisis induced financial crash. If you go back to inception of the fund, at 2004, it doesn’t do quite as well (though not horribly). If you go even further back to the interest bubble of the 1980s, well, it would not be all roses, for sure. As well, I could show you other REIT etfs that have not done so well over the last ten years.

Go ahead and invest all your money in REIT ETFs, heavily leveraged, I could care less. Yeah you win big when you win with leveraging, for sure, but when you lose money (and eventually we all lose money in investing at some point), you will lose BIG.

Personally, I would rather have the data of almost 200 years of the stock market to rely on, rather than a decade of a single etf. And really, that wasn’t the point of this thread at all. It was me being flummoxed as to how some people sink all of their money into just their primary residence as their only investment.

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Real estate is ge erally a far more relative and stable investment than a car. Loans and that aside. News cars lose a massive % right when you sign it over. Their costs rein maintenance are generally pretty high i think in comparison to real estate. Or at least more consistent that you need tonpay. Real estate variea on that. But land tends to go up and down with the country and is always worth something.

I think OP is about right. Its worth it as a small percent of ones financial worth, not all in.

I like it simply because whenni bought my land and houses it about 50% of my worth. No loans. But went through financial troubles later on and real estate was my only solid anchor keeping me afloat. Real estate ahould be used to make money, like any other investment. If not just a primary residence which is also quite nice compared to renting which can be really shitty.

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In Taipei it makes no sense to buy a property. Not when the cost is basically astronomical and rent doesn’t even put a dent in it (it would take 100 years to pay off the mortgage if you were paying what you paid for rent on it). It’s inflated and will probably burst at some point when the market corrects itself. The reason rent can’t go up is because income is low (and landlords still rent because letting a house sit empty is bad for the house, meaning it’s worth less, not to mention its upkeep is not paid).

Probably better to rent and invest the rest in a mutual fund or something.

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There are an abundance of landlords willing to let their apartments stay empty in Taipei though.

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As a Taiwanese where would you go? Not everyone has enough to buy property abroad and live there. For people here it makes sense, just watch out where you buy.

Maybe down south but a lot of Taiwanese buy for the schools, not always for comfort.