Someone posted a curious question about real estate investments in an online forum this week.
They wondered if anyone had ever reached a financially comfortable early retirement “without investing in real estate”? They held the hypothesis that real estate is one of the primary routes to FIRE (financial independence & retired early).
I thought the question was a bit odd. While I always surmised that it is likely a good financial lever, I answered that beyond our personal home, we never really diversified beyond stock & bond index funds. I’ve read a lot of articles on real estate (residential & commercials), but never had the energy to put in the time needed to find the right rental properties at the right price.
If anything, I have become a bit leary of investing in real estate given the government’s restrictions on landlords during the pandemic. The CDC – who I would never have guessed had the authority – has put in place a moratorium on evicting people who don’t pay their rent. It started under Trump (last July) and has been extended under Biden (thru June 2021 at least). That’s 12 months renters can skip out on paying rent with no immediate consequences.
If residents were in active quarantine due to CV19, I could understand why the CDC would limit people from moving, but not a blanket restriction whether or not people are actively infected.
A friend who works in real estate said she sees many young people are skipping rent and taking the money (along with their stimulus checks) and bidding on houses to buy. The housing market has become red-hot. People are so flush with cash, she says she is seeing 25-30 offers on starter homes.
I have written before that it seems the stock market may be a bit ‘derisked’ by the willingness of government to flood Wall Street with stimulus. At the same time, it seems that real estate has become much more risky with federal intervention. I’m happy I don’t have to deal with it right now.
Anyone caught first hand in a real estate investment conundrum right now?
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