Bought 1983 $1m. Sold 2012 $8mil.

bfd!

I am against renting in NYC, but if you had put that 1M in investment, it may have yielded more than 8M.
Most people I know have bought brownstones in the early 80's for $50-100k and resold recently for $5M+

So, the best case scenario you made a return of 7% per year? For a "risky" investment of buying in the early 80's I would have wanted more return than that...

If you put that $1m in Apple...now that would have been quite the return.

> If you put that $1m in Apple...now that would have been quite the return.

dealboy is old school, he only "invest" in things he can see and touch like real estate. no complains here, it's good for us!

They didn't have to put it into Apple. If the renters had taken a flier on $1 million in 30-year Treasuries in 1983, they'd have about $17.5 million now. Okay, who's the yutz?

deal boy: So what?

Assuming that $200,000 was the down payment at the time on this $1MM property, the return over 31 years is 12.4% per annum (if we factor in the 6% broker fee of $480,000 one has to pay when they sold).

But that's BEFORE all the other costs of buying and selling (I mean, I haven't even addressed the taxes due, and we're not counting upkeep, insurance, in 21 years they had to update at least once, etc., etc.,). You would probably be significantly under 10% per annum as return. Which is certainly fine, I guess, but nothing stellar by any means.

I mean, I would have rather rented, and just bought something simple like Qualcomm stock 20 years ago. Your same $200,000 down payment put into Qualcomm in April of 1992 (remember, this only 20 years ago, not 30) would be worth $184,600,000 today.....

But of course, hindsight is 20/20... what if you'd invested that $200K in Enron instead? Just sayin'...

> They didn't have to put it into Apple. If the renters had taken a flier on $1 million in 30-year Treasuries in 1983, they'd have about $17.5 million now. Okay, who's the yutz?

don't even remind dealboy of transaction and carrying costs involved in real estate.

i wouldn't be surprised if real estate will end up paying for unfunded pensions. it's the least mobile capital to tax, workers are over-taxed as it is in the coasts and the younger are more mobile thanks to the previous housing bubble. wouldn't be weird, once upon a time the entire gov was funded from property taxes.

bramstar: Of course hindsight is 20/20. That IS the point. That's why the entire thread is retarded from its inception.

Just think owners live for free for decades after paying off the mortgage.
And get $7 million bucks as a parting gift.

Renters get ZERO percent return.
And, renters pay MORE every single month, both during the mortgage and after it's retired.

Average renter net worth $5k
Average owner net worth $250k

http://tinyurl.com/3sx2w

Those are great, but given the choice, I'd prefer a Wacky Waving Inflatable Arm Flaling Tube Man

"Assuming that $200,000 was the down payment at the time on this $1MM property, the return over 31 years is 12.4% per annum (if we factor in the 6% broker fee of $480,000 one has to pay when they sold)."

Firstly re-do your math, 1983 to 2012 is not 31 years but 29 years and even at 12.4% that amounts to $5.3 million.

Secondly let me know where you are going to get a 12.4% return year after year for 31 years?

Rent reciepts over 29 years will fill up a good sized shoe box! LOL!

If you invested in S&P500 in 1983 until today your unlevered return ignoring dividends would be roughly 8%. unlevered return on this house is roughly 7.5%. Assume dividend yield of roughly 2% per year on S&P.

How about buy the house and invest in equities? Most NY'ers I know do just this.

>How about buy the house and invest in equities?

Sprint?

>If you invested in S&P500 in 1983 until today your unlevered return ignoring dividends would be roughly 8%.

But according to genghistm, that's too low because it was a risky investment especially during the early 1980s.

dumb boy

soooooo dumb

$1m in 1983 was a hell of a lot more money than it is today. Why don't you take a look at what $1m bought you in the Hampton's in 1983...bet you can do better than this...

Most people who had $1 million to buy a home in 1983 were using it to leave Manhattan and buy in Greenwich and Scarsdale...weren't a lot of $1 million sales in Manhattan in those years.

Full disclosure: I own sprint (:

pls provide cost and date of purchase

@yikes- I should have bought NYC real estate (;

>@yikes

You can call him Wbottom if you wish.

dealboy; RealEstateNY; and all the other other yutz who just have to try and prove how smart they are buying real estate. Bottom line...

Buy this place $1MM in 1983 = $8MM today (before costs). Mazel Tov.

Buy Qualcomm $200,000 in 1992 = $185,000,000 today.

I'll rent, and stick with stocks. You buy ALL the real estate you want!

As Dealboy says, buying highly leveraged RE just before the longest and largest housing bubble in recorded history was an excellent investment move from a selfish, individual perspective.

Buying the same RE at the end of the bubble -- not so much.

But in any event, bubble profits are nothing to be proud of: the profiteers created nothing. They simply took from everyone else. Every dollar they made is a dollar some buyer, or prospective buyer lost.

In a free-market that worked the way the defenders of free markets claim they do, bubbles don't happen and prices would be far lower today. In a capitalist democracy with sensible technocratic elites, the government would have squelched the bubble in its early stages, instead of allowing it to grow. In a just society, it'd have been taxed away to return to those who they took from.

In the world as we have it, people who got rich this way should be grateful for their luck and more than a little embarrassed. Intentionally or not, they are the legalized recipients of stolen goods, market redistributions of wealth from the less well off to the better off that are unjustifiable on any basis other than the law of "I've got mine and too bad for you".

I guess to be a staunch bull these days, you have to be fairly ignorant...

Besides the fact that someone just bragged about a 7% return... less than the long term return on stocks... and we're talking about the best period for real estate maybe ever.

If that's the sell, I think RE loses by a mile....

Who would this theoretical person be who had $1MM in 1983 but rented and never bought a home for 29 years?