It really depends on and varies a lot with location. I have made a lot higher % return in residential real estate than in securities by
- Seeing where housing prices are going up and comprehending why so as to judge if the effect will be in place for years or only a little while. E.g., buying a view home in a relatively depressed section because of soon passing problems (E.g. old druggie hippies, retired film industry wookies who were living out there last days and not doing home maintenance) in the Hollywood Hills. Similarly anywhere near but not right on a beach in Los Angeles area.
- Carefully thinking through and strategically implementing up-marketing remodels but doing the work your self on the cheap making sure you have time and money resources to do the job right and on schedule (and you have to know some carpentry, plumbing, electrical, painting treatments or learn it!)
- Having good taste a little ahead of its time (not hard if you have friends who know their stuff).
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