Buffett’s recent investment advice? Load up on US real estate
Recently in a TV interview, Buffet surprised those who have been bearish on real estate. He said: “If I had a way of buying a couple hundred thousand single-family homes and a way of managing them, I would load up on them.”
A couple of hundred thousand properties might be out of most of our leagues. Probably not worth the headache but even just a couple would be a good start. With positive gearing being the norm, property management improving and the market turning around, now is a great time to check out the US market.
Buffet also added that if houses are bought at low rates and held for a sufficiently long period of time, single family homes perform even better than stocks. That’s saying something from a man whose net worth of around $50 billion is made up almost entirely of stocks.
His final bit of advice is for buyers to take out a 30-year mortgage and refinance if rates go down. Where else can you get a loan on an asset and pay less than 5% interest, take three decades to pay it off, and keep all the cash-flow and appreciation along the way?
If you’ve been thinking about taking the plunge, it’s worth taking the next step.