The IRS definition is not relavent to the the discussion. Per you're own quote you are acting on RE agent, hireing handy men, making decisions, etc. I own some commercial RE with a similar profile...not passive. Owning IYR is passive.
Agreed. Also Fed shrinking their balance sheet, plus recent trend in rate hikes, as well. Lets see what Powell does. He's untested, and coined a Republican-friendly dove...
Not unlike us traders on ET, not a passive investment even if you trade REIT. Anyway, I do understand your points. Regards,
Yes, correct! In cities where supply and demand is an issue, (Boston, NYC, San Fran) it will not be a problem for inventory to be absorbed. BUT, in cities over built with new inventory and no housing crunch, it will not only crush developers trying to sell for a reasonable profit, but when they're forced to keep it as rental property to ride out the correction, it will crash the rental market prices for landlords holding older inventory... Basically what happened to me when I expanded from Boston into Providence, RI in the 2000's, where it was just a bedroom community/city, no job growth etc. When 2008 came, all those new developments rented their brand new units for the same market rent prices we had on the 2-3 families, leaving us to mark down our rents by 30% just to try and get bodies in the door. Those of us who had 50% equity and lower mortgages could ride out that problem, while those of us at only 20-25% equity and a higher mortgage went into short sale/foreclosure......Because the problem is 2 fold. Yes, your market rents go down, BUT ALSO many people are laid off from their jobs, and they cant pay rent, and so your vacancies go up too while also taking in lower market rents!! NOT a good situation.....And no, they don't teach you this in business school, nor in those RE Guru classes, lol.. This last recession was similar to the great depression. Unlike previous recessions when you could ride it out, this one either crushed you or you got out just barely alive.