Originally Posted by
DKSG
I feel compelled to share my views on the LH/FH issue.
There are a lot of people who seems interested in events 40 years down the road when maybe a big part of us are gone.
The price difference between a FH and LH is about 15-16% theoritically and realistically.
When property prices move UP, this gap is narrowed. When property prices move DOWN, this gap is widened.
Imagine if I promise to pay you $100 in 50 years time and ask u for $20 now ? Would u entertain me ? The value attached to cash flows that is past 50 years from now is literally worth very little. And if you extend the same calculation, cashflows 100 years later is worth near nothing at the present value.
So buyers, dont be misled by some of the posts. If you see a FH selling for $1.2 million and a LH selling for $1,000,000 ... both same size same location. Go for the LH, its underpriced.
Dont overpay for FH.
PS : I do own LH and FH properties and I dont treat them too differently when it comes to buying or selling. If you use the concepts put forth by some people here, then u cannot sell FH properties lo ... because when u buy them now at $1 million, they are worth about $1 billion because they give you cashflows FOREVER and EVER.
Just my 2 cents worth of comments.
DKSG