Land creates no cash flow...And you'll have to pay a yearly tax.
Your first step is to do a self-analysis on your tolerance for risk. What is your time frame? Time is extremely important.
Look at the historical return of any investment over time.
Diversity and time are key.
When I first moved to San Fran, I went to an open house in Pacific Heights...An incredible mansion for sale for $125,000. I was making $600/month and thought I'd never be able to buy real estate there....Every real estate "bubble" has historically fell by the wayside (factoring time) as values continue to rise. Today that house would sell for around $10 million.
Is there an R.E. bubble today? Probably, but what about the factor of time?
Stock market?...Look at a time table...
On December 1, 1984 the S&P 500 was 181.14. Today it's at 4,363.33.
I tend to be a contrarian when I invest. I don't buy stock when everyone else is buying, I buy when it's being sold off.
I bought an apartment building in San Fran when interest rates were "floating" at 18% in 1981 and no one was buying. Best investment I could have made at age 30.
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Gary
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