Letter Re: Some Investment Options for the Prepper

Regarding the article “Some Investment Options for the Prepper”, K.P. suggested: “Real Estate Rentals – Buying real estate now? Are you crazy? No, not at all.”

No, K.P. isn’t crazy, but I believe that he is uninformed.

For many decades I have been bullish on real estate, but the rules have changed, and this time those changes are permanent and come with very serious consequences for those who hold a mortgage. Details of “The forever mortgage” were quickly spelled out, and then any information of “The forever mortgage” disappeared as quickly as it appeared.

Real estate is great and offers so many more advantages than any other investment vehicle but the rules have changed!

Please, please, please do not buy investment real estate in this market! If you think the prices are great right now just wait until next fall! The prices will be yet lower, and those new rules hiding in the shadows are a friend to no investor.

We had a beautiful view home and the sale of that home came with much anguish but at that time (December of 2009) we knew we were doing the right thing. The house sold for an unbelievably low price, but today the price would be even lower, and now sometime before closing the lender would not even grant the loan.

Real estate is not selling, the prices are still dropping, and new rules will strip away many benefits, and chain you to a mortgage forever.

I always want to own, and despise renting, but the truth is that in any but the best markets it is actually cheaper to rent than own.

One last thing. The word “mortgage” means to engage, or pledge till death. This time our government really means it! – Rick