Making Money in Real Estate: Crazy / Not Crazy / If Trump Can Do It …
My real estate mania has a long documented history on this site; in fact, it predates the site entirely. Back when Mike worked at a different money blog, he hired me to write a thing for him — and naturally I chose to focus on houses. For eighteen years, I lived in the same place on an actual street called Unicorn Lane. It was as lovely as that I’m-not-making-this-up name implies.
After college, though, I was ejected from not merely the Ivory Tower but that bubble of privilege, forced by circumstances to live in a peripatetic fashion that did nothing for my anxiety. Five apartments in seven years. Almost as soon as we could buy something, we did, and I’ve clung to the property ever since.
Thus far, the apartment has been a ridiculously good investment. The values in our neighborhood seem to be rising higher even than values city- and borough-wide, which are themselves insane. We are very, very lucky; at the same time, I feel some pride, since I did all the hunting and pecking myself.
Now we’re in a position where we have some savings. We have some equity. The question is, should we buy more?
I don’t really know anyone who does this, who puts money in real estate rather than mutual funds, who buys property beyond the property they need to live in. Anyone besides Donald Trump, I guess I should say, and he’s not exactly my kind of role model. What does it even mean? My tentative thought is that we would buy another apartment, or if we got co-investors, maybe a small house, in an up-and-coming area of Brooklyn. The kind of place we would like to live in ourselves. We could rent it out temporarily (attempting to be good, ethical, responsive landlords!) and then later, if we needed to, sell our current place and move into the new one.
Is this even investing? Is this the dumbest idea you’ve ever heard? Really risky? Would taxes and fees eat up any potential profit? Would we be stuck as toilet-fixers and bankrupted by leaky roofs? Should we stuff all our cash in a mattress or a CD instead? YOU KNOW NOTHING, JON SNOW.
Besides, as a friend of mine argued recently, is it unethical to set out to profit from housing, which by some standards should be a universal human right?
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