Real Estate Articles
Confessions of a market timer
By Money Magazine

1. Real estate isn't like other investments Quality-of-life considerations count more than the numbers do.

Imagine you had a choice between earning an annual average return two percentage points below that of the stock market while living for 20 years in a home you loved, or beating the market but having to move five times and never really liking the place you were living in. Almost everyone would accept the lower return.

2. Market timing with real estate is a hopeless exercise Buying and selling are slow and transaction costs are high. In addition, moving and setting up a new home is time consuming.

Worst of all, you not only have to call real estate correctly, but all your other forecasts have to be right too. If you sell overpriced property and move into stocks, you've accomplished nothing if share prices go down.

3. You should buy as much house as you can reasonably afford Because I got such a great deal on my apartment going in, I earned an excellent percentage rate of return even though I sold too soon. So if you have an opportunity to buy during a dip in the real estate market, grab as much house as you can.

Even today, when prices aren't cheap, it makes sense for anyone under the age of 45 to buy the best property possible without getting overextended. If you're still below your peak earning years, you'll likely want more space in the future rather than less.

4. If you get a shot at the home you really want, go for it I've had several opportunities over the years to buy apartments that would have met my needs -- if not forever, then certainly for a long stretch of time.

None was a perfect investment, but had I bought any of them, I wouldn't have wasted a huge amount of time over the past 20 years looking and moving. When it comes to your home, stability, predictability and security are ultimately the greatest rewards


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