As featured in The Wall Street Journal, Money Magazine, and more!
     

Danger Likely Ahead

This article was written by in Real Estate and Home. 2 comments.


I could count on five pairs of hands the people who have told me that there is no way to lose when it comes to investing in real estate. The most emphatic are those individuals who for whatever reason have had very little formal education, and yet some bright people also tend to think this way. It reminds me of the 90s when everyone was gung-ho on stocks. In the “new economy,” everyone who played the game would be rich—at least on paper. This attitude has been proven wrong before; it will be proven wrong again.

All along I’ve been saying there’s as much risk, or more, investing in real estate than there is in stocks. While real estate has never gone down as a whole since the Great Depression, when you buy a house you’re not investing in real estate as a whole. Sarah Max from CNN supports my view and sees a bubble. No one knows when it will pop, and when it pops, I imagine it will pop at different times in different locations.

Be smart. Remember the three tenets of investing in real estate (or in anything): diversify, diversify, diversify.

Published or updated July 27, 2004. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

Email Email Print Print
avatar
Points: ♦127,470
Rank: Platinum
About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 1 comment }

avatar Eric

As far as real estate being as risky as stocks, I believe that one has better resources to find special situations that can result in higher returns without increasing risk or reduce risk while maintaining returns comparable to stocks. As for those who believe that there is nothing to loose, thank you for providing an endless supply of special situations.

Previous post:

Next post: