X-Message-Number: 20640
From: "John de Rivaz" <>
References: <>
Subject: Real estate investment
Date: Tue, 17 Dec 2002 11:33:16 -0000

----- Original Message -----
> > You can have the same thing in North America by buying Shares in
> > Real Estate Investment Trusts (REITs) The return is excellent, at
> > least for now.. I have small positions in 4 of them:
> >
>
> I think the same must hold true in most countries under a name or another.
It
> seems a good alternative to insurance or speculative stock market. In
forty
> years, I have never seen a crash in the real estate domain.

I have had real estate investmnents since the mid 1960s. I have lost money
one some, gained on others. There have certainly been several booms and
crashes in the UK. At present most of the world seems to be in the grip of a
boom exactly like the technology boom that bust in March 2000. There are
other parallels. If you have been a long term (several decades) investor in
anything with boom bust cycles, you usually end up with a profit even just
after a bust. That is unless you happen to invest at the top of a boom
cycle, when it can take an inordinately long time to even get back what you
paid for your investment. I really would advise against investing in real
estate right at the moment -- it is at the top of a boom cycle.

There are particular problems with real estate investment if you buy
properties directly.

1. It involves personal contact with lawyers, estate agents, insurance
salesmen and thereby a lot of parasitical expenses, and possibly associated
taxation,  that are unquantifiable.
2. The blocks of money that have to moved attract unwelcome attention from
the taxation authorities -- you cannot take capital gains in small doses so
as to avoid tax penalties.
3. Whilst you own a property you can suddenly find yourself liable for a big
item of expense (repairs, change of tenant, defaulting tenant etc)

There is an advantage: you can get tax relief on any loan used to buy rented
property.

With stocks,
1. the buying process is almost anonymous and any charges are clearly
defined
2. you can take a small amount of gain each year for re-investment without
suffering a tax penalty
3. If a company suddenly offers more shares to stockholder, you can ignore
the offer without any problem at all.

You cannot get tax relief on a loan to buy stocks.

--
Sincerely, John de Rivaz:  http://John.deRivaz.com for websites including
Cryonics Europe, Longevity Report, The Venturists, Porthtowan, Alec Harley
Reeves - inventor, Arthur Bowker - potter, Holistics, de Rivaz genealogy,
Nomad .. and more

Rate This Message: http://www.cryonet.org/cgi-bin/rate.cgi?msg=20640