Comment by mhb
6 days ago
That's a nice just so story for the cases in which a landlord benefits due to the success of his tenant. Now do the ones where the property value goes down because of any of a zillion other factors.
6 days ago
That's a nice just so story for the cases in which a landlord benefits due to the success of his tenant. Now do the ones where the property value goes down because of any of a zillion other factors.
CRE has historically provided very good and stable returns, especially compared to retail businesses who face extreme failure rates and risk; trying to compare the two is insulting.
So retail business owners are just dullards who can't figure this out like you can?
I’ve worked with both. Retailers are not generally sophisticated investors; they don’t necessarily lose money, but if they don’t own the real estate, they are usually making less than they could have working a job and investing their earnings in an index fund. There is a similar trend with most small businesses outside of the knowledge sector. Real estate investors who buy, hold, or develop property professionally are almost always far more sophisticated, which is to say that they are more knowledgeable of the tradeoffs involved in their investments and can thus take calculated risks in order to achieve a particular outcome.
People make suboptimal investments all the time. This can be the result of lifestylism (“I want to be a retailer!”), naiveté (“I’ll figure out the financials later.”), or path dependence (“I’ll become a retailer because it’s the only thing I know about.”).
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I imagine most people are not capitalized, confidently practiced in it, or interested in that kind of business. Took 10 seconds to think about it.
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What about it? Do property investors deserve guaranteed increase in asset value? Do other investors deserve that?
Of course not. It's your apparent assumption that property investors are not providing value because it's certain to go up or something.