All Forum Posts by: Mike Roy

Yes, I can see that.  I guess that's why its best to buy cash-flow in good locations, within good markets and with compelling features/benefits.  I look at the same data everyone else does regarding labor participation, price/rents, income/price, inflation, etc. and have come to the conclusion that I'm not smart enough to know where prices will be in 3-5 years; I do have a pretty good idea about what they'll do in 20-30. :)

I do tend to think that home price/gold ratio has some meaning over the long-term.  Anyone else look at that?

Hi BP - I just had a potential property manager tell me that they don't carry insurance because they hire out maintenance and repairs.  I'm new at this, but this seems like a giant red flag.   If I were a property manager, I would want some basic liability coverage at a minimum to protect me from claims from both tenants (wrongful eviction, discrimination, etc.) and property owners (breach of contract, etc.).  

I also want them to have coverage because if something really bad happened, like a major injury or death to a tenant, I imagine that their family would start suing everybody (owners, manager, contractor, etc.) and would go hardest after those who they think are most capable of generating a payout, i.e. the insured parties.  Am I on track with this line of thinking?

I assume those of you who hire out PM ask to see proof of insurance?  What exactly should I be looking for here in terms of their coverage types and amounts?

Thanks much!

I wasn't trying to make a point about the value of investing in gold vs. real estate; rather, I was highlighting that real estate priced in gold might offer some insight about the relative value of real estate on a long-term average basis.  I think this ratio is telling us that real estate is generally a buy now despite all the talk of another bubble, that's all.  

Hi All - I'm curious to hear how much stock you all put into the US Home Price/Gold Ratio:

https://smaulgld.com/wp-content/uploads/2015/03/US...

Personally, I like to look at the price of assets relative to other assets because it controls for inflation.  While it will never tell you if that asset is ABSOLUTELY expensive/cheap, it does tell you if it is RELATIVELY expensive/cheap in relation to the asset you're comparing it to. 

The chart seems to be telling us that, right now, gold is relatively expensive and housing is relatively cheap.  Obviously, you'd want to look at other data, such as home price/median income ratio, in evaluating whether housing is absolutely cheap, but home price/gold is an interesting data point.

What I also find interesting is that home price/gold seems to suggest that interest rates do not have a substantial impact on the relative value of home prices, despite conventional wisdom.  Housing went from being extraordinarily cheap in 1980 to sky-high bubble status in 2005 back to cheap again, and interest rates were generally falling the whole time.

Do any of you use this ratio as a long-term metric in evaluating your overall exposure to real estate?