this post was submitted on 22 Apr 2024
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A Boring Dystopia

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Not necessarily, it's subject to a lot more geographic risk. If you have a properly diversified real estate portfolio (i.e. properties in a variety of geographic locations), sure, it can be less risky, but at that point you're so rich that even wild variation in returns isn't going to impact your retirement.

Your average landlord holding a small basket of priorities likely hasn't properly diversified. It's akin to buying a handful of blue chips, you're trading returns for consistency, but even blue chips fail (see GE) and sectors collapse. So if you're buying properties near you and your local economy tanks, you're kinda screwed. If you diversify, your maintenance overhead will jump and your margins will fall.

There's certainly money to be made, but for real estate it's usually at scale, and I'm not going to have enough money to make scaling realistic (nor do I want that much money anyway).