1. In San Francisco / Bay Area, software and tech companies are paying about $200,000 to $300,000 to their employees.
If both husband and wife are working, then double that kind of high salaries.
It could be one of the reasons for high real estate prices in San Francisco.
My note: So, it's the labor (their employment and wages), which determine the prices for another factor of production, 'land'/houses (although strictly it is not a factor of production, but probably a productivity tool for the labor to be located close to their workplace and
2. The author of the article below says that 'In Real Estate, Money Is Made On The Purchase, Not On The Sale'.
3. The author of the article talks about buying a property for $1.23 million. After 2.3 years, the value of the property is about $1.8mn. The buyer spent about $170,000 on remodeling. So, the gross profits were about $450,000. The total return is about 31% or 150% return cash on cash return on down payment.
Note: In real estate, returns are higher because down-payment is low and it is a leveraged transaction. Such leveraged transactions may work in increasing price environment, the leverage may lead to bankruptcy/insolvency is a bad market (not San Francisco) or market like 2008-09.
4. Important to meet the buyer/seller in person so that a deal could be closed more easily, People are more emotionally involved.
http://www.financialsamurai.com/in-real-estate-money-is-made-on-the-purchase-not-on-the-sale/?curator=alphaideas&utm_source=alphaideas
No comments:
Post a Comment