Small Group Meeting Q&A (10)

Small Group Meeting Q&A (10). Written on August 28, 2018

Question ten: Is real estate also a good investment? Is investing in rental property a good investment?

Answer: As long as you can use a loan to buy a house, the loan ratio is more than half, and the property is in a good school district or good area, especially one with scarcity, real estate is absolutely a good investment.

As for whether buying investment property other than your primary residence is a good investment: if every house can be bought with a loan, then in theory they will all be good investments.

But in investing, besides considering profit, we must also consider risk. For people who buy four or five houses, with each house financed at 50% or 70%, that is a very large amount. Many people want to use rent to repay the loans, but usually after deducting property tax, there is not much cash flow left, and sometimes negative cash flow appears. If you still have a job, you can use salary to cover the cash-flow gap, but this carries a risk: if you are laid off, the funding chain will break.

Some people say that if they are laid off, they can sell the real estate. In reality, when you are laid off, the economy is usually poor, and real estate will certainly also be poor. At that time, you may not be able to sell the property, or the price may be bad. When real estate has already fallen for a while, you may be forced to sell at the lowest point.

So for any investment, besides considering rate of return, you must also consider whether the funding chain is stable. Usually, investment failures or bankruptcies ultimately happen because the funding chain breaks.

Below is the YouTube video: Investment and Financial Management Essentials (19), Investment Q&A

2018 Small Group Discussion Q&A Record (2):

[https://www.youtube.com/watch?v=9VwRCmtqp-o](https://l.facebook.com/l.php?

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