I have several hundreds thousands of disposable money. Good quality appartement in a nice city looks like a very solid investment choice:
- I get to buy a touchable, physical, valuable assets. If something happens to me, I can use that asset for myself.
- It looks like the assets is going to increase in value in the foreseeable future
- Regular, predictable additional income when I rent it
- I cannot "spend" the house, unless I pull the plug and sell it - which is a big commitment. I cannot enter a spiral that leads to me slowly but surely waste that money.
- Assets value is not easy to evaluate, as opposed to stocks/bond which evolve on a daily basis. I currently have stocks, and I end up checking their value almost daily. I believe it actually adds stress in my life and that stuff is addictive. I am not sure I like it that much.
It certainly is not the absolute best placement I can make, but I am not looking to maximize my ROI at all cost, I just want to optimize my happiness and use that money to enjoy life a bit more.
Real estate looks like a great way to store that money, hedge against inflation/stock market crash, protect this money from myself, and reduct my potential anxiety when it comes to managing it.
> I get to buy a touchable, physical, valuable assets. If something happens to me, I can use that asset for myself.
There are expenses in maintenance. If you're in a condo, you'll have to pay condo fees and taxes every year. These will go up as your property appreciates
> It looks like the assets is going to increase in value in the foreseeable future
You don't know this, but if you want a positional bet on real estate there are cheaper managed options such as REITs
> Regular, predictable additional income when I rent it
Renting is non-trivial. You can make good income that may even cover your mortgage, but one bad tenant or a few months vacancy will wipe out your returns. Eviction for non-payment is also non-trivial and takes 6 months to 2 years depending on the state. In non-US its often longer. Something like covid also means your tenant is likely living rent free indefinitely. You'll also have to maintain the tenant and pay for stuff. Fridge breaks down, need a new HVAC, plumbing, electrical, all on you. It's not predictable. You can pay someone to manage the rentals for you, but the rate is something like 10% of gross rent and that doesn't cover expenses that may arise.
> I cannot "spend" the house, unless I pull the plug and sell it - which is a big commitment. I cannot enter a spiral that leads to me slowly but surely waste that money.
Homes depreciate and require a lot of maintenance. More true for houses, but condos have other expenses such as condo fees
> Assets value is not easy to evaluate, as opposed to stocks/bond which evolve on a daily basis. I currently have stocks, and I end up checking their value almost daily. I believe it actually adds stress in my life and that stuff is addictive. I am not sure I like it that much.
There are less liquid investment vehicles other than stock that don't have the daily update factor. There's a lot more stress when your property needs a new roof and you're trying to manage maintenance when you're not there to supervise.
Thank you for that. As explained earlier, the money is current not in real estate but in diverse stocks/bond (think ETF). I am quite risk adverse and a bit naturally anxious, so I did consider real estate as a solution, but that might not be the best option for me either.
- I get to buy a touchable, physical, valuable assets. If something happens to me, I can use that asset for myself.
- It looks like the assets is going to increase in value in the foreseeable future
- Regular, predictable additional income when I rent it
- I cannot "spend" the house, unless I pull the plug and sell it - which is a big commitment. I cannot enter a spiral that leads to me slowly but surely waste that money.
- Assets value is not easy to evaluate, as opposed to stocks/bond which evolve on a daily basis. I currently have stocks, and I end up checking their value almost daily. I believe it actually adds stress in my life and that stuff is addictive. I am not sure I like it that much.
It certainly is not the absolute best placement I can make, but I am not looking to maximize my ROI at all cost, I just want to optimize my happiness and use that money to enjoy life a bit more.
Real estate looks like a great way to store that money, hedge against inflation/stock market crash, protect this money from myself, and reduct my potential anxiety when it comes to managing it.