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Warren Buffett Said Buying 'Distressed' Homes With 30-Year Mortgages And Renting Them Out Might Be The 'Most Attractive' Investment Available (news.yahoo.com)
submitted 1 year ago by to c/aboringdystopia@lemmy.world
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Buffett didn't hesitate. "If I knew where I was going to want to live the next five or 10 years, I would buy a home and I'd finance it with a 30-year mortgage, and it's a terrific deal," he said.

He didn't stop there. "If I was an investor that was a handy type, which I'm not, and I could buy a couple of them at distressed prices and find renters... it's a leveraged way of owning a very cheap asset now, and I think that's probably as attractive an investment as you can make now."

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[–] 5 points 1 year ago (1 child)

This was in 2012. So we saw it already. If you bought forclosed house in 2012 for $150,000.. on average that house would sell for $257,000+ plus now. Assuming you rented it for $1,000/month during that time, assume you spent $50,000 dollars in upkeep/taxes they made $213,000 dollars off it so far. Obviously they still own the houses, so they can keep renting them out or sell them when the market is high right now.

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  • [–] 2 points 1 year ago (1 child)

    Stock market did better. I won't go look at mine but I know it performed wonderfully. What old Warren is saying is that real property is his pick for the next ten years

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  • [–] 3 points 1 year ago*

    He did well off real estate during his life.

    He also believes in long term investments. Never chasing stocks that are on the rise. He's been saying for about a decade the market is to expensive right now. The average total market value to GDP of the U.S. averages out to roughly 85%. Then he plays the market like counting cards. When the market value is below that 85% he buys long term investments. When it's above, he sits on his current investments and rides them unless he is forced to make a move.

    So what you will see is in 2012, we were below market average, so he advised people to be making purchases/investments. Especially since the housing market collapsed in 2008 and people were running out of ways to pay their mortgage so they were foreclosing left and right.

    Right now... The market is really overvalued. And a lot of it is probably tied to tech companies being way over valued. Will it collapse? Maybe not.. but it's hard to justify some of the prices we think things are worth.

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