Over the past several decades we, as a society, have blurred the lines between investing, and speculating/gambling. If I told you I had a hot tip on the 2nd race at Hollywood Park tonight would you consider betting on that horse an investment, or would you see it as speculating/gambling?
The answer is obvious, yet if I you take a look at most people who bought non owner occupied real estate over the past several years was it really based on much more than a tip or a hunch? Did they invest $100,000 because they knew that they could hold it forever, rent it out, pay to have it managed and maintained and still have $8-10k or more coming into their pocket every year? Or did they tie up $100,000 hoping for appreciation while they dipped into their pocket to carry the property?
How is reaching in your pocket and taking out money, for the privilege of taking out more each month while hoping that something goes up in value an investment?
