We buy physical properties, as well as other investment vehicles like stocks, for the purpose of earning a return much higher than inflation 5 years or more down the road. As we defer consumption for the purpose of having something to live on when the day comes that we cannot physically work, or simply don’t want to spend our life working for money, there is a need to do more due diligence when it comes to substantial financial investments like in the case of real estate.
Economics 101 tells you that when there are too much money running after too…
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There is no doubt that when it comes to long term investing, of at least 5 years or more, value investing is the best investment strategy when it comes to stocks. What most people don’t know is that when it comes to physical properties, value investing, invented by Benjamin Graham, perfected by Warren Buffett, is also the best strategy, at least in my opinion.
The distinctive key of value investing lies in it using multiple benchmarks when deciding on the value of an asset, instead of subscribing to modern finance theory of prices of asset already reflect the value of…
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Benjamin Graham value investing principles pay handsome dividends to those who follow it, the most famous example of which is Warren Buffet. Given the large similarities between businesses and physical properties, it is clear that some principles can be ported when one is going to buy properties.
No one places 100% cash down when buying properties for investments, other than primary residence. Although the price of a physical property seldom drop to zero, unlike that of stocks where even for a well know blue chip like Enron and Lehman Brothers can fall, its price can still dropped in the short…
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