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Non-Tech : Investing in Real Estate - Creative Opportunities
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To: John Vosilla who wrote (1847)8/1/2013 12:10:26 PM
From: tejek  Read Replies (1) of 2722
 
What’s your opinion? Do you think investor groups snapping up property in Brooklyn could be good, on the one hand, because they are fixing up and renting out problem properties, or is it making Brooklyn unaffordable and creating another unsustainable real estate bubble?


I personally don't like any of it even though this is what I do. But I buy cheap, aren't force feeding another bubble and offer nice reconditioned properties at a very affordable price. On that article they are gentrifying creating unaffordable hubs and spokes from Manhattan into the outer boroughs driving out everyone except the very well to do. But as long as they aren't saddling themselves with too much debt they can't ever pay back who am I to judge the rational decisions in the free market regardless of whether Wall Street is a primary driver of both sides of that 'trade'

I think its important to distinguish between rental/housing price increases caused by gentrification and the housing bubble that happened in the aught years of this century. The latter was a bubble created by coming up with mortgage instruments that allowed people who couldn't afford to own to buy their own property. Those people didn't have the sustainable income to keep the property solvent and when the downside of those instruments came due and the economy weakened, those people got into trouble.

With gentrification, properties are upgraded which encourages more affluent people to move into a neighborhood. The downside is that the less affluent are forced to move.....not a minor point.....but a point quite different than the issue of bubbles. IMO, gentrification does not create bubbles but rather real value is created by improving the properties. I believe Park Slope was gentrified in the 1970s...........housing prices didn't suddenly drop in the 1980s or 1990s..........rather housing prices in Park Slope have continued to increase decade after decade.
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