Quote from: m2017 on May 29, 2024, 12:27:07 PM

Many people still consider real estate a good investment (especially the older generation of investors). Let's try to calculate and check if this is true.

My friend has a property (apartment) in one of the most expensive cities in the world* (Moscow) with an area of ~65 sq.m (three-room). The market value of this property is approximately ~$170,000. Such an apartment can be rented out for approximately $500-700 per month. This will bring a profit of $6000-8500 per year. It will take 28-20 years for the purchase of a similar residential property to generate a return equal to the cost of this apartment (doubling the money invested).

These are not entirely accurate, but only approximate calculations aimed at showing an approximate “picture”. This does not take into account inflation, changes in the value of real estate (the “body” of the deposit) and the cost of rent (“interest” on the deposit).

Of course, profitability may differ when choosing residential or commercial real estate. Commercial rent will be more profitable, but with such rent many problems arise, such as finding a long-term tenant, because with every downtime in finding a new (short-term) tenant, money is lost. The next “headache” is the repair costs (which will certainly arise) and again drain money from you. And add to everything property taxes and other deductions, for example, tax (13-30% depending on tax residence status) on the sale transaction if the property was owned for less than 3-5 years (as in the country in which my friend’s apartment is located). One should take into account the likelihood of a fall in the value of real estate and rent due to the deterioration of the situation in the area or city as a whole due to environmental problems (pollution) or man-made (military operations), natural phenomena (fires, floods, volcanoes).

Bitcoin in 2 years (to date) has more than doubled in price (and this is not the limit) from $29k to $67k. Not to mention the 10-year interval, where the profitability of bitcoin turns out to be simply crazy compared to real estate.

Whereas with bitcoin (compared to real estate), you just buy it and hodl it safely. It seems impossible to come up with more passive investments. Do you feel an advantage in choosing real estate investment over bitcoin? I will not ask the question of what you would prefer to invest in here, because it is already clear what the majority will choose.

With this post, I wanted to strengthen the conviction of BTC-investors that their choice was correct, because instead of buying a conditional one apartment, in 10 years you will be able to afford to buy several (probably more than 1) apartments (depending on the country and location). Like Didi Taihuttu, who sold his house and bought bitcoin.

^* - Static cost of 1 sq.m. residential real estate for 2023 by city of the world (according to various sources from the Internet).

1 - Monaco (73,6k - 54,7k euro)
2 - Hong Kong (27,7k - 18,6k euro)
3 - Switzerland (Zurich) (22,3k - 13,7k euro)
4 - South Korea (Seoul) (19,5k - 10,6k euro)
5 - Singapore (18,5k - 10,7k euro)
6 - Great Britain, London) (15,4k - 8,9k euro)
7 - Israel, Tel Aviv-Yafo) (14,8k - 9,9k euro)
8 - USA (New York) (14,2 k - 9,3 k euro)
9 - France (Paris) (12,4 k - 8,7k euro)
10 - Cyprus (Limassol) (3,3k - 2,3k euro) - A friend’s apartment is located at approximately this price level (~2,4k euro, Moscow).

Yes BTc can offer you some more benefits in terms of profit that Real estate but I think you have missed the most important aspect of real estate that's risk free invwsem.

I don't see anything in this world except real estate which can give you profits without any loss. Btc requires a long term strategic approach and even then you can have losses but thats not the case in real estate.