Rents in Megacities Can't Go Up Forever

We live in a special time where clustered activities are unusually important for economic growth. Some activities, such as dentistry and cement production, don’t cluster geographically very much, for obvious reasons. In contrast, finance (New York and London), information technology (the Bay Area), and entertainment (Hollywood and New York) are the most clustered. For whatever reasons, it makes sense to have many of the top decision-makers in one place.

Leading cities have become so expensive in large part because two of these clustering sectors – finance and information technology – have been ascendant. There is no particular reason to expect those trends to continue forever, and that will bind rents in affected cities.

Personally I think megacities will become increasingly unlivable…The BA is not the place I remember 50 years ago…It has not aged well. .chocked with traffic and high prices…I am seeing the trend towards small towns accelerating…

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Even BA seniors are not moving to small towns. We can give incentives to seniors to downsize to small towns, or remote big cities.

Plenty of BA seniors living in South Lake Tahoe…and many Foothills towns, Reno, Palm Springs, Vegas…etc

That’s why if I were you I would diversify my portfolio to not be engaged 100% in RE. We see the cloud being almost everything, what’s next? Will it need the same people or less? And so the units needed to house them.

By the way, people are dying, and their replacements are not reproducing that fast. I don’t worry about it that much, but in the middle of my 50s, I think it is time to think in making life easier for those coming behind me. I am planning in moving away in a couple of years to areas where you can smell the grass, and the coffee.

Because life behind a wheel while cursing the stupid driver in front of me is not giving me vitamins but depleting my energy.

The great thing about retiring from the BA is that your home equity will let you buy for cash almost anywhere, with plenty left over to live on…almost anyone who has owned 30 plus years and paid off their mortgage is a millionaire in the BA…The biggest issue is how to deal with cap gain taxes with the extra over $500k profit…

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Is reverse mortgage a loan? If so is it tax free?

Just seems like there gotta be way around the tax man. So many loopholes to drive a truck right thru.

People can rent it for the minimum number of years then 1031 exchange or just live off the rent. My mom knows plenty of people in FL who did 1031 of their old home into multi SFH or MFH. They live off the rents, since CAP rates are higher there.

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That is a good approach…