It Is Too Late To Make Money From Real Estate.
In a very real sense, we have crested the top of the roller coaster and are about to plummet down the other side. Except, in this ride, the tracks end.
Real estate, the game of monopoly that we have been playing, is over. It only works in a perpetually expanding economy. And the world's populations has started shrinking and will fall off a cliff as boomers move on.
(Caveat: Right now, if you have good credit, and are good at repairing houses, you CAN find a deal on a house and fix it up and rent it out. But, you have to go find a deal, qualify for a mortgage (so you are using the bank's money), repair it and rent it. But, we will see all that disappear)
Demand is not infinite
One thing economics books love to state is that demand is infinite. It is not.
If there was a pile of your favorite food, and you could eat all you wanted, well, you might be able to eat two meals worth of it, but that is a fairly hard limit. And each time you try, it will reduce your enjoyment, and finally start to make you sick. Soon, you won't even look at that food.
Houses are a pain to maintain. One house is ok, one house and a vacation home is doable, but you really get to a point where if you want more houses, you have to have a staff maintaining them. And then, is it your house, or the staff's house?
Most people want just one house.
And those that think they want a few houses… they will want only one after having to maintain all that for any time. Maintaining a dozen rentals is a full time job.
So, if there are more houses than people, we will have empty and unwanted houses.
Supply has been constrained
All of our adult lives, house building has been constrained. So that there is always less houses than demand. This is how prices have been kept high.
If you doubt this, look at ghost towns. No demand, plenty of houses, nobody is buying.
The constrainment of new houses will not be an issue soon. The boomers own 25% of the houses. That is a quarter of the houses that will be dumped on the market with a decade. Everyone has been complaining about the lack of houses, and soon, there will be way too many houses.
The prices will drop, and drop hard. (to zero when you consider all the downward pressures)
So, why would you rent or buy a house if there are a dozen just sitting there vacant?
(and someone saying they own all these empty houses, will not stop people for long)
The one way left to make money on real estate
Well, the banksters have a plan. Buy up ALL the real estate.
Then they will be the "land Lords". Lord is another name for King. And Real Estate means the King's Estate.
So, the banksters want to be the Lords of this land. And, they have all the money in the world (they can just print it) and are buying up all the houses. (through Black Rock currently)
Their plan is, if they own all the houses, you have to pay them rent. Forever. Because there is no other choice.
(You vill own nothing, and you vill be happy)
There is a BIG problem here. The banksters would basically have to pay you to rent their houses. And pay you only enough to rent their houses. So, why include that step? Be the govern-cement and decide who can have what house to live in. But then the govern-cement has to do all the maintenance. It really is a losing proposition. Unless, it is all about control.
Commercial real estate is already seeing the crash. Big buildings being sold for 10¢ on the dollar.
Giant factory buildings just sitting their empty.
Malls being turned into city resource offices.
There are too many of these buildings now. Without population growth, there will always be empty buildings. (unless some crazy govern-cement decides to bulldoze them all down.)
Seriously, we are entering a time when there will be MANY empty houses. And real estate will never be the same. Instead of "housing prices always go up", it will be "a house without an owner is trash". And thus will begin an era where you don't own real estate because you can pay more than anyone else, but you own the property because you maintain that property.
And, all of this is true, but a thing that will destroy suburban house values the most is, "If the place doesn't have a greenhouse, you can't live there." People will be moving to small communities. And these will be located where people can grow their own food. Suburbia is not that.