Land and Residential REITS

V

vanzandt

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A picture says a 1000 words.

Since where we are heading still remains completely unknown, and earnings for both the current quarter and several quarters going forward will be adjusted down by at least 25%, realistically we haven't reached the bottom. That said, large up-spikes will be the norm on the way to a bottom.

The Fed is now being said to have "an infinite supply of money". That's the buzz-phrase today. Well, I suppose that's true, but the next shoe to drop when we pull through Corona will be inflation.

For the long term real-estate is the place to be... but its going to have to be selective.

There will still be plenty of individuals with piles of money, that said I would still avoid high dollar homes, and on the lower end, no one with money wants to be a slum lord. Therefore, the focus as an individual real-estate investor imo... is buying large tracts of land. That's where the money will be in real-estate going forward.

For an investment for people who can't afford that, I think once again, and I have been saying this now for a few years here... the multi-family REITS should emerge from this crisis stronger than ever as home-ownership for many many areas of this country will be an incredible challenge for a large percentage of Millennial's.

If you've got money... buy large land tracts. Still pricey, but they're as cheap as they'll ever be I suspect. Your grandkids will thank you. jmho
-vz
 
vanzandt said:
View attachment 222838

A picture says a 1000 words.

Since where we are heading still remains completely unknown, and earnings for both the current quarter and several quarters going forward will be adjusted down by at least 25%, realistically we haven't reached the bottom. That said, large up-spikes will be the norm on the way to a bottom.

The Fed is now being said to have "an infinite supply of money". That's the buzz-phrase today. Well, I suppose that's true, but the next shoe to drop when we pull through Corona will be inflation.

For the long term real-estate is the place to be... but its going to have to be selective.

There will still be plenty of individuals with piles of money, that said I would still avoid high dollar homes, and on the lower end, no one with money wants to be a slum lord. Therefore, the focus as an individual real-estate investor imo... is buying large tracts of land. That's where the money will be in real-estate going forward.

For an investment for people who can't afford that, I think once again, and I have been saying this now for a few years here... the multi-family REITS should emerge from this crisis stronger than ever as home-ownership for many many areas of this country will be an incredible challenge for a large percentage of Millennial's.

If you've got money... buy large land tracts. Still pricey, but they're as cheap as they'll ever be I suspect. Your grandkids will thank you. jmho
-vz
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One thing to think about is property tax. In the 2008 crisis state and local were hit super hard with tax revenues, and unlike the federal govt most of them have to balance their budget every year. A big source of revenue for the local folks is property tax. If I was looking at people to tax, vacant and unused (i.e. not farmed) land seems like a pretty tempting target to raise taxes on. No grandmothers or blue collar working families will be harmed, and if you go way back to your micro days, the elasticity of supply for property is virtually zero, meaning theoretically it has the lowest dead weight loss from taxes and should therefore bare the brunt of all taxes because it's the most efficient thing to tax (from a tax dead weight loss perspective).
 
Even rock-solid REITs have crashed by 30-40%, wiping out 5+ years of growth and income. And now the Fed is buying mortgages in unlimited quantity.

They are throwing it out left and right here, that's for sure. Buy pretty much any reasonable asset here and your worst case is locking in what a few weeks ago would have been considered a very decent passive return, best case is that we go into the biggest bubble blowoff of all time and pretty much everything doubles or triples.
 
Sig said:
One thing to think about is property tax. In the 2008 crisis state and local were hit super hard with tax revenues, and unlike the federal govt most of them have to balance their budget every year. A big source of revenue for the local folks is property tax. If I was looking at people to tax, vacant and unused (i.e. not farmed) land seems like a pretty tempting target to raise taxes on. No grandmothers or blue collar working families will be harmed, and if you go way back to your micro days, the elasticity of supply for property is virtually zero, meaning theoretically it has the lowest dead weight loss from taxes and should therefore bare the brunt of all taxes because it's the most efficient thing to tax (from a tax dead weight loss perspective).
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Its certainly a good point, depending on the state/county. There's plenty of loopholes though, again, it depends on the state. "Farming" has long been the biggest scam going.
 
Specterx said:
Even rock-solid REITs have crashed by 30-40%, wiping out 5+ years of growth and income. And now the Fed is buying mortgages in unlimited quantity.

They are throwing it out left and right here, that's for sure. Buy pretty much any reasonable asset here and your worst case is locking in what a few weeks ago would have been considered a very decent passive return, best case is that we go into the biggest bubble blowoff of all time and pretty much everything doubles or triples.
More...
I think they're on sale.
 
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