I'm at a real estate conference in Santa Monica. The content is great and a bit above my pay-grade. Lots of guys here who do own huge apartment buildings, self-storage, mobile homes, construction companies, etc.
But I listen closely because real estate is a fractal business. The tiny, lower levels are identical to the massive, upper levels. And the important parts are the same: down payment, cash flow, value-add, etc. So lots to learn.
So, what is everyone talking about? You guessed it: Rising interest rates. Fixed interest rates (i.e. 30-year and 15-year loans) are not available in commercial real estate. These guys are sweating. The monthly cost of what everyone at this conference own is going up, now or soon.
So yet again I am struck by what an insanely good investment a single-family home is, for the simple reason that your biggest cost of ownership (your mortgage payment) never goes up. In fact, factoring inflation, it goes down. *You can also get a fixed rate on income property up to four units, just saying.
Tell your kids: the biggest expense of your life is not taxes. It's interest.
And the most expensive thing you'll ever buy is a house. To be able to fix the interest cost of that thing for 30 years (and lower it when you can!), makes houses, to me, the best investment you can ever make.
They should ask me to be on a panel next year…
