RadioBDC Logo
We Are Done | The Madden Brothers Listen Live
 
 
< Back to front page Text size +

Sorry, real estate no road to riches!

Posted by Scott Van Voorhis April 4, 2013 06:56 AM

E-mail this article

Invalid E-mail address
Invalid E-mail address

Sending your article

OK, doing a lot of soul searching as I sip my morning coffee. BeeReasonable says I have it all wrong.

Apparently, BeeReasonable (great pen name, by the way) is convinced I am yet another out of touch liberal, steering the young'uns wrong with my advice that no one under 30 should buy.

When you are in your twenties, that's the time to buy a home and start building wealth - and load up on stocks as well, he argues.

"The author is painfully ignorant and once again, any kids listening to the Globe on how to get through life will take it on the chin!"

Here's more BeeReaonsable - edited down for comprehension and brevity.

"People should buy a three-family as soon as they can and should move up to their next house also as soon as they can. Telling people not to buy real estate until they have their whole life worked out is like telling people to remain poor their whole lives!! If young people want to get ahead, they should buy as much real estate and stocks as they possibly can, as soon as they possibly can!!! Especially at these historic lows. This article is, once again, doing a major disservice."

Really? I will stick by my advice. It's better to be young and mobile in today's Dickensian economy than young and anchored to a mortgage - and a particular city or suburb.

The high unemployment we have seen over the past few years has arguably been exacerbated by the record levels of homeownership reached during the bubble years.

In fact, it's not a new concept - academics have been studying the relationship between homeownership and unemployment rates for years now, as this 1999 paper attests.

In your twenties? Then rent and enjoy the freedom to move to pursue your career and personal interests. In a tough job market, mobility can give you an edge over aging Gen Xers like me!

Now if your career interest is real estate or stock investment, then I say sure, go for it. But playing at real estate investor - or stock picker - is a fool's game for most of us.

You might have just as much luck taking your hard earned savings to Foxwoods and trying your luck.

Want to get ahead? Then rent and work in developing your career and skills, not your real estate portfolio.

Besides, anything you can buy in your twenties - especially here in the ridiculously pricey Boston area - could very well either prove to be unsaleable later on or stick you with a painful loss.

Here's a Kiplinger piece on building wealth in your twenties - other than starting to put money aside for retirement, the tips generally involved living frugally and working hard.

"Your own earning power -- rooted in your education and job skills -- is the most valuable asset you'll ever own," says Knight Kiplinger, editor in chief of Kiplinger.com.

Now that sounds truly reasonable!

This blog is not written or edited by Boston.com or the Boston Globe.
The author is solely responsible for the content.

E-mail this article

Invalid E-mail address
Invalid E-mail address

Sending your article

About boston real estate now
Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

Latest interest rates

SPONSORED
RE by the Numbers
Mortgage Q&A: How do I convert my primary residence to a rental?
Today's article comes to us from a question posed by one of our readers. We love answering our reader's questions whenever possible. Should you want...
archives