Real Estate Speculating Versus Real Estate Investing

Oy. I guess we are getting back to this subject that I really have not had to address since 2007/2008.  There is a major difference between real estate speculating and real estate investing.  And some of you out there are confused as to which is which.

My interpretation?  If you are buying a property based primarily on appreciation, you are speculating.  For instance, buying a condo/loft in the trendier parts of Kansas City can cost you upwards of $350,000 (plus monthly fees, let's not forget those) and bring you rents of about $1,800 - $2,000/mo.  There is little cash flow to be had for that kind of money versus the other choices available here in this market.

"But Chris, I think I can sell that property in 5 years for $475,000."

You may be right.  You may be wrong.  Have we all forgotten The Great Recession?

Listen, if you have that kind of disposable investment capital, go for it. All I am trying to say is that a real estate investment is a longer term and safer play that pays for itself in the downs as well as the ups, in my mind. Speculating is a higher risk shorter turn around play.  

Do whatever you are going to do. I understand.  But I've seen this movie before.  Twice now in my 14+ years.  Economies go up. Economies go down.