I Lost a House Yesterday
The US stock markets really got hammered yesterday due to concerns about the global economic impact of the coronavirus epidemic. A large part of my personal net worth is invested in real estate, but I also have equity holdings. While I love real estate, it usually doesn't make sense (for a variety of reasons) to hold those type of investments in tax-deferred accounts like an IRA or 401K. Plus, diversification.
So, I have a decent chunk of money in the market, and it's invested fairly aggressively, as I have a long time horizon before I'm old enough to tap in to those accounts. As a result of the market downturn, I booked a paper loss greater than the size of a typical downpayment on a single family rental house in Texas. Hence the somewhat tongue in cheek title of this post - I lost a house yesterday.
How did my real estate assets perform yesterday? Well, they are worth pretty much the same as they were the day before, and about the same as they are worth today. They are marching ever forward, steadily without the daily and weekly gyrations that are all too common in the equities market. All the while, during that appreciation march, these houses are throwing off passive income in the form of rent while paying off the debt used to acquire them.
And, I never have to wake up in the morning and see that through panic, investor sentiment, or some other factors outside of my control that one of my houses has disappeared.