Go to Jeff Salisbury LWGate Home Page.From: T Koyn <koyn@users.anet-stl.com>
Subject: Real Estate Average Returns?
Date: Tue, 19 May 1998 23:52:10 -0500 (CDT)
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I often read that the long term average return on stocks is about 10% a year, or 6.5% after inflation. I am wondering about long term average returns on real estate, such as direct ownership and rental of residentatial and commercial real estate (assuming property has no loan). I realize that individual properties will differ significantly from the average, but would like to know what average is as a point of comparison and to put it in perspective with stocks, bonds, etc. If you have read of any averages, please state any assumptions that know to go along with them. I know someone who seems to be getting 5% profit on residential real estate and someone getting 15% profit on commercial real estate when you compare profit to current value of the real estate. There is no loan. Is this typical? For commercial real estate, I would be interested in seeing real world examples of earnings and expenses by broad categories to get a better idea about how this works, and what the owner is expected to pay for and what the tenant is expected to pay. I am interested in recommendations for learning more about this subject, books, web sites, etc. Thanks for any info koyn@anet-stl.com - -
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