Real estate is one of the fastest ways to reach financial independence. But is it one of the best ways to keep it in the long term?
While many have stories about being burned in the real estate market, historically there has been cohorts of investors in full markets who’ve done very well for themselves.
With rumors of unrealized capital gains taxes in addition to the ongoing prospect of increased property taxes, the proposition that real estate represents the same investment opportunity as it did previously is changing.
There are many real estate markets where home prices trend towards zero including japan, germany, Italy and even in some us cities, like Detroit michigan. When economies go through boom and bust, supply and demand can shift on a dime and housing stock that is highly leveraged can more easily be walked away from then paid off. This leads to massive property tax arrears as well.
While real estate investors have told me “that no one has built a better house yet”, that is largely untrue in 2021 where 3D printing pumped concrete and prefabrication should yield incremental cost reductions to the global housing market.
Interestations where the risk of housing deflation represents a political challenge we see governments slow to amend legislation to create more affordable housing.
Real estate investors want you to believe that we are running out of places to live but when you consider that at their peak, Detroit was bulldozing thousands of homes a month, this doesn’t seem like a real constraint just yet.
While we are not making any more land, many Gulf State countries have created additional residential space on man-made Islands by deploying energy to reshape their landscape.
Additional investment in terraforming and in the significantly forward that Elon Musk has demonstrated with reusable Rockets means that in a 30 to 50 year period, we might be surprised at the options for a living on New Earth.