X-Message-Number: 20657
From: 
Date: Thu, 19 Dec 2002 10:27:42 EST
Subject: Re: CryoNet #20640 Real Estate

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From John de Rivaz:

> . 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.
> 

If you don"t want  "problems", use REIT (US), SCI (France),... You can buy by 
small parts and sell the same way.

There is no boom burst, only boom slow down:  Assume you buy a flat and rent 
it. you get what you think is a fair return on investment. If there was a 
crash similar to the stock market, your capital would go down by 3/4. Your 
rent return on capital would have a interest rate x4. Anybody with a dime 
would invest here and nobody would sell. So that price is not realistic. Such 
a burst is impossible.  A real estate burst is limited to something as 10- 15 
percent loss. Something you can evaporate on the stock market in less than a 
week.

Y. B.
 

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