An article “the seven harsh truths about real estate” was recently published as part of an article by Jonathan Clements a staff reporter of the Wall Street Journal on May 10, 2005. The article starts with an endeering anecdote involving the author’s mother, but then proceeds to cite a few good gems that all home owners and investors should consider.
- A house is an undiversed bet on a single piece of property
- Real Estate doesn’t always go up
- Leverage bites when you get it wrong
- A house is a long-term investment
- The big money is in the rent (see some of the other articles in the Exclusive Investor section for information on Capital Gains versus Cash Flow in real estate for more on this thought!)
- Home improvements aren’t an investment
- Mortgage debt has to be repaid
See the original Wall Street Journal article for more detail on each point.
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