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RE: A tale of magic internet money and bricks and mortar
An investment property is physical. That's re-assuring to people, but it also means it has a location; within an area controlled by Local, State and Federal government. All 3 of these entities are terribly inefficient and wasteful; and are already milking the properties within their footprints.
As each of them grows (that's what governments do) they're going to milk those properties harder, wiping out any already thin margins for investors.
Even if he does make a profit, it'll be in their broken farce of a currency.
Agreed. The recent increase of Capital Values (CV) by the Valuer General here in SA means more council rates and more land tax revenue...As with most things everything else is on the increase as well making bricks and mortar a questionable investment for most considering other options that exist. Still no shortage of people willing to throw their money away.
A proliferation of similar property-types through urban-infill is affecting rental incomes negatively and forcing ROI downwards and this, with the rising costs of running a property investment, means a more marginal benefit for the unwary investor.
As you say, people see it as safe although in my 17 years in the industry it's amazing how many approach it with no caution at all seeing it as a good investment without doing the research.
How an investment property is bought and the strategy around that investment is critical. Borrowing 90% of the funds and hoping seems to be the norm these days though. [Insert rolled eyes and a shoulder shrug here].