Real Estate

Land. Buildings. A skyscraper. A development of 37 homes just beneath the dam.

It's all real estate, and it exists as a stand-alone category, because it carries distinctive investment characteristics. The biggest? Certainty. That is, unlike a clothing manufacturer whose stylish fabrics can be highly sought after this year and then be reviled next, the odds that the big office building in the middle of town will have lots of wanna-be renters, is...high. And, in fact, most buildings are leased for 3-5 years or more.

Steady. Recurring. Revenues. WDTM? Highly desirable for banks to lend money against. That is, when there is high certainty of steady, stable, recurring revenues, lenders have relatively low risk of not being paid back. So fortunes are made in real estate ventures, not just because the individual investment was great; it can be only kinda good, but carry leverage of 3-5x...and an only "good" compounder, at 5% a year with leverage, can be 25% a year and be...magnficent.

Oh, and the interest on that debt? Yeah, it's tax-deductible. So...thank you, government.