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Is Real Estate a Gruesome Business?
Warren Buffett defines a “gruesome business” as one that requires a lot of capital and produces a low rate of return. Is real estate gruesome? Let’s see: Does it “require significant capital to engender … growth” (WB, 2007; PB p. 14)? Yes. The median home price in America is about $220,000. The average rent is […]
Financial Figuring for Landlords: Real Estate Moats
A moat was a medieval form of security. Just pull up the drawbridge and watch as your enemies fail to get across the water, or if they do, to scale the wall of your castle. Although physical moats have no place in modern real estate (can you imagine the lawsuits?), an “economic moat” is Warren […]
