Investing in Real Estate Doesn’t Make you Smart

Why the marketing regurgitation of the last few decades is more problem than solution

Every asset you own you want to see move up and to the right. When that happens to real estate, however, societies crumble.

The appreciation of real estate hasn’t been a symptom of clever investing, but manipulation and a nuanced understanding of leverage in home buying.

Mega-appreciation requires only two things:

1. Population growth in a thriving economy.
2. Financialization.

The 30-year mortgage is about two mortgage cycles old.

Over the last 60 years, we have seen the federal reserve nosedive rates to zero in an effort to create marginal, continued economic growth.

This is great for a few reasons.

Source: Macrotrends, US population forecasts.

For one, whoever leveraged their cash into land as the population more than doubled over approximately 50 years has made a killing. You borrowed cash, which was inflating at a right higher than headline rates, and leveraged into an asset that can generate cash flow through rent.

That asset then experienced spikes in demand because

• there were more people than homes, as population…