finance_astroid

5 yıl öncediscuss

This is a solid article, a bit old and less economically authoritative, but underscores what everyone has been seeing if you watch the economy (economic data lags, the best place to look is usually quarterly earnings reports and commentary i.e. transcripts) https://www.nytimes.com/2020/05/20/business/public-gathering...

finance_astroid

5 yıl öncediscuss

In a way yes. But its also using leverage to amplify your gains.

Say I get $90,000 to go buy a house, I spend the $90,000 and have 1 door. I get a tenant in it and they make a $90,000 down payment. I then go buy another house and get another tenant in it and they make a $90,000 down payment. I now have two houses and still have the same amount of money I started with, I can continue this cycle and as long as property appreciates I don't just get the property appreciation from one house I get it from all of the houses so (% appreciation * property value * number of properties).

Say it is a $100,000 property and it appreciates 3%. If I had just bought one house and put the money in an interest yielding savings account I would get some low % return. If I instead chained it to acquire 10 houses I would get $30,000 return, which is 30%. But if the value of the house goes down it works against me!

Obviously this ignores transaction costs, interest costs etc.

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