<instructions>Your goal is to analyze the following comment and estimate how highly it will be upvoted by the Hacker News community.</instructions><comment><author>choeger</author><text>Seriously, what do you expect? Money doesn&amp;#x27;t work. If you invest and want to turn an above-average profit, you need to put up something, be it knowledge, skills, or effort. As you said, owning a house requires a certain skillset, but that&amp;#x27;s exactly where your money would come from.&lt;p&gt;So if you&amp;#x27;re already in the construction business, or a real-estate lawyer, or simply have lots of experience and spare time, it&amp;#x27;s a good choice. If you&amp;#x27;re a software engineer who can&amp;#x27;t tell drywall from masonry and simply wants to do a few mouse clicks to gain a passive income, it&amp;#x27;s definitely not for you.</text><parent_chain><item><author>csense</author><text>I&amp;#x27;ve never understood real estate investing...&lt;p&gt;- You have to do a bunch of physical maintenance of the property and be on-call to unclog toilets&lt;p&gt;- You have to know landlord-tenant law inside and out, there are a lot of hidden gotchas that can get you sued for big money or even criminally prosecuted&lt;p&gt;- You have to see stuff that&amp;#x27;s wrong with the property and understand how much you&amp;#x27;ll need to fix it&lt;p&gt;- You have to know how to find all sorts of contractors who will do a good job and not rip you off&lt;p&gt;- You can&amp;#x27;t invest in say the $500-$5000 range to get your feet wet at small scale, every property with any sort of building on it at all is like $50,000+, and building a brand-new house is even more expensive&lt;p&gt;- Enormous leverage seems to be the norm, and in most states, the bank doesn&amp;#x27;t forgive debt that&amp;#x27;s not covered by sale of the collateral (house)&lt;p&gt;- Anyone with enough money can do it, it&amp;#x27;s a perfectly competitive market where it seems difficult to have any kind of edge over professional landlords or house flippers that have built a career in this area, have a lot of capital and a staff of full-time experts optimizing every aspect down to a science&lt;p&gt;- If I get on e.g. Zillow it says, &amp;quot;Such-and-such property in location A is worth $X and such-and-such property in location B is worth $Y where Y = 3X&amp;quot; and I say &amp;quot;Wait why is it that?  Y = 2X or Y = 4X also seems equally reasonable, heck Y = X or Y = 5X don&amp;#x27;t seem unreasonable.&amp;quot;  I have no intuitive sense for what property value should be.&lt;p&gt;- Your investment&amp;#x27;s locked up for a long time, it takes weeks &amp;#x2F; months to sell real estate.&lt;p&gt;- In 2022, you&amp;#x27;d be lucky if a computer from 2002 sells for maybe 5% - 10% of what it sold for in 2002.  In 2022, you&amp;#x27;re telling me a house sells for.. enough more (in real terms) than what it sold for in 2002 that it would have been a worthwhile investment despite now being 20 years old(er)?  That feels like some kind of violation of whatever is the financial equivalent of the laws of thermodynamics&lt;p&gt;- You can do all your landlording right and still get screwed by tenants from hell.&lt;p&gt;For me, a stock and an investment property both yielding 6.4% are in no way equivalent.  Given all the downsides, the ROI on property would need to be like 5-10 times as high for stocks for me to even consider it.. and that gets into too-good-to-be-true returns.&lt;p&gt;I know there are people who are experts in this area and people who say real estate&amp;#x27;s a good investment.  But I don&amp;#x27;t understand real estate anywhere near well enough to put in the sums of money that seem to be required.</text></item><item><author>somethoughts</author><text>There&amp;#x27;s also an unmentioned aspect to the real estate to stocks analogy.  There is a spectrum in the types of real estate that is somewhat akin to the spectrum of value stocks to growth stocks to pure speculation based stocks.&lt;p&gt;There are income producing properties such as apartment buildings, duplexes, strip mall commercial real estate in average cities.  These are similar to consumer staples stocks like P&amp;amp;G, Walmart, utilities, etc.  The income is generated via rent from reliable consumer demand.  They are priced for boring cashflow (with high cap rates and low PE) but should endure.&lt;p&gt;There are reliable growth properties in trendy cities that are legitimately and secularly growing where future increases in rents are derived from rising local salaries and demand.  These are like FAANMG stocks.  They are priced for growth (i.e. low cap rates - high PE) - such as Silicon Valley, Seattle, LA, Austin.&lt;p&gt;On the flip side of the spectrum, there is properties which are designed for speculation (and optionally money laundering) not based on any sort of rental income - almost like the physical manifestation of bitcoin.  Think never unoccupied 3rd vacation homes in Miami and New York.  These are like ARK ETFS or crypto coins - both do well in speculative times and see less growth when interest rates go up.</text></item></parent_chain></comment><story><title>The Buy and Hold Mindset</title><url>https://avc.com/2022/11/the-buy-and-hold-mindset/</url></story>
<instructions>Your goal is to analyze the following comment and estimate how highly it will be upvoted by the Hacker News community.</instructions><comment><author>kodah</author><text>Owning a home takes a huge amount off of your taxes in the United States. This mainly applies to single people or people who don&amp;#x27;t file with dependents as they&amp;#x27;re taxed the most.&lt;p&gt;A home acts as a way to store and grow cash (mostly) securely. They also, generally, have higher than (stock) market rates of returns for the cash that you stuff in them. For instance, do a $50k kitchen renovation and that may entice a future buyer to buy at $100k more. There&amp;#x27;s a lot of examples like this throughout the housing renovation industry. Some home renovations are going to net you nothing, but defer something negative. For instance, I had to install a Radon system in my home because radioactive gas was leaking out of the crust deep beneath my basement. I won&amp;#x27;t get that $3k back &lt;i&gt;but&lt;/i&gt; I won&amp;#x27;t live in a radioactive container and future buyers won&amp;#x27;t be scared off (rightfully so).&lt;p&gt;If you&amp;#x27;re renting (since you mentioned landlords) the economics change a bit. You need the house to look nice but you either need it super-durable or inexpensive to repair. What usually happens is that a rented home gets a makeover that will put it squarely in the price the landlord wants per month. This is done as cheap as possible because a fair amount of tenants are radioactive and will destroy everything not nailed down.&lt;p&gt;If you&amp;#x27;re selling your home after five years you may have some nominal value increase coupled with equity. For me, that amounted to about $35k on a $215k home. To replicate that in the markets you&amp;#x27;d have to get involved in a life insurance plan that acts as a tax-free market account, which is significantly more complicated to manage. I know because I almost did it when I moved to California!&lt;p&gt;If you plan to stay in a house less than 5-8 years, I just wouldn&amp;#x27;t buy. You&amp;#x27;ll be somewhat upside down depending on your market.</text><parent_chain><item><author>csense</author><text>I&amp;#x27;ve never understood real estate investing...&lt;p&gt;- You have to do a bunch of physical maintenance of the property and be on-call to unclog toilets&lt;p&gt;- You have to know landlord-tenant law inside and out, there are a lot of hidden gotchas that can get you sued for big money or even criminally prosecuted&lt;p&gt;- You have to see stuff that&amp;#x27;s wrong with the property and understand how much you&amp;#x27;ll need to fix it&lt;p&gt;- You have to know how to find all sorts of contractors who will do a good job and not rip you off&lt;p&gt;- You can&amp;#x27;t invest in say the $500-$5000 range to get your feet wet at small scale, every property with any sort of building on it at all is like $50,000+, and building a brand-new house is even more expensive&lt;p&gt;- Enormous leverage seems to be the norm, and in most states, the bank doesn&amp;#x27;t forgive debt that&amp;#x27;s not covered by sale of the collateral (house)&lt;p&gt;- Anyone with enough money can do it, it&amp;#x27;s a perfectly competitive market where it seems difficult to have any kind of edge over professional landlords or house flippers that have built a career in this area, have a lot of capital and a staff of full-time experts optimizing every aspect down to a science&lt;p&gt;- If I get on e.g. Zillow it says, &amp;quot;Such-and-such property in location A is worth $X and such-and-such property in location B is worth $Y where Y = 3X&amp;quot; and I say &amp;quot;Wait why is it that?  Y = 2X or Y = 4X also seems equally reasonable, heck Y = X or Y = 5X don&amp;#x27;t seem unreasonable.&amp;quot;  I have no intuitive sense for what property value should be.&lt;p&gt;- Your investment&amp;#x27;s locked up for a long time, it takes weeks &amp;#x2F; months to sell real estate.&lt;p&gt;- In 2022, you&amp;#x27;d be lucky if a computer from 2002 sells for maybe 5% - 10% of what it sold for in 2002.  In 2022, you&amp;#x27;re telling me a house sells for.. enough more (in real terms) than what it sold for in 2002 that it would have been a worthwhile investment despite now being 20 years old(er)?  That feels like some kind of violation of whatever is the financial equivalent of the laws of thermodynamics&lt;p&gt;- You can do all your landlording right and still get screwed by tenants from hell.&lt;p&gt;For me, a stock and an investment property both yielding 6.4% are in no way equivalent.  Given all the downsides, the ROI on property would need to be like 5-10 times as high for stocks for me to even consider it.. and that gets into too-good-to-be-true returns.&lt;p&gt;I know there are people who are experts in this area and people who say real estate&amp;#x27;s a good investment.  But I don&amp;#x27;t understand real estate anywhere near well enough to put in the sums of money that seem to be required.</text></item><item><author>somethoughts</author><text>There&amp;#x27;s also an unmentioned aspect to the real estate to stocks analogy.  There is a spectrum in the types of real estate that is somewhat akin to the spectrum of value stocks to growth stocks to pure speculation based stocks.&lt;p&gt;There are income producing properties such as apartment buildings, duplexes, strip mall commercial real estate in average cities.  These are similar to consumer staples stocks like P&amp;amp;G, Walmart, utilities, etc.  The income is generated via rent from reliable consumer demand.  They are priced for boring cashflow (with high cap rates and low PE) but should endure.&lt;p&gt;There are reliable growth properties in trendy cities that are legitimately and secularly growing where future increases in rents are derived from rising local salaries and demand.  These are like FAANMG stocks.  They are priced for growth (i.e. low cap rates - high PE) - such as Silicon Valley, Seattle, LA, Austin.&lt;p&gt;On the flip side of the spectrum, there is properties which are designed for speculation (and optionally money laundering) not based on any sort of rental income - almost like the physical manifestation of bitcoin.  Think never unoccupied 3rd vacation homes in Miami and New York.  These are like ARK ETFS or crypto coins - both do well in speculative times and see less growth when interest rates go up.</text></item></parent_chain></comment><story><title>The Buy and Hold Mindset</title><url>https://avc.com/2022/11/the-buy-and-hold-mindset/</url></story>