Warren Buffett and Charlie Munger explain why they don’t invest in real estate and consider it to be a lousy investment.
The question goes: “I wonder if you could give us a glimpse into your investment process, the way you approach looking at a particular industry. And I wonder if you could use real estate as an example. I know real estate hasn’t been a big, huge part of Berkshire’s portfolio over the years. And I wonder if that’s because you view real estate as a commodity business or if, maybe, the cash flows from real estate tend to be more predictable than, perhaps, from some other industries, and thus, it tends to be less likely to be mispriced, and therefore less likely to find terrific bargains in real estate. So, just wondering if we could — if we were watching a discussion between you and Charlie hashing out the merits of real estate,[tell us] how it would go.”
From Berkshire Hathaway Annual Shareholders Meeting. (2002)
Warren E. Buffett is an American long-term investor, philanthropist, business tycoon, and the chairman & CEO of Berkshire Hathaway. He is considered one of the most successful investors in the world and has a net worth over 100 billion dollars. Buffett was born in Omaha, Nebraska. He developed an interest in business and investing in his youth and made truly incredible stock market returns over his career.
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Warren Buffett: Why Real Estate Is a LOUSY Investment?
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20 Comments
Buffett is talking about commercial real estate, not houses.
I appreciate you sharing your thoughts. Thank you for sharing, but what about managing your asset or rental?
I recently sold a property in Portland and am considering investing the proceeds in the stock market. While many are saying the market is ripe for investment, I’m unsure if now is the right time to buy stocks. How long might it take for the market to fully recover? Additionally, I’ve noticed others in the same market making over $200,000 in gains within just a few months, which has left me feeling confused and uncertain about my next steps. Any insights or advice would be greatly appreciated.
Berkshire has 28 billion dollars in real estate under ownership and or management. "Throw the rock and hide the hand." If you can make an educated real estate investment and keep adding to your portfolio, just do it. You and your family will win in the end.
Here we are today in Aug 2025, both prices and mortgage rates too high. Great opportunity to negotiate steep discounts and/or creative terms to acquire & flip when rates drop.
Unless you need a roof over your head and some write off to boot. Just as Buffett has.
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landlord playford mountain no good
Buying stocks will keep you working a w2 job like a good employee, investing in rental properties allowed me to quit my job in 4 years
To obtain financial freedom, one must either be a business owner, an investor or both, generating passive income particularly weekly or monthly basis. That's The key to being financially stable
The address of a house or the number of the house means something only in 🇨🇳 culture 🙏💋 I never bought a property with my money 🙏 uselless for rich 🤑and smart people right ??????
real estate has lot to do with location. I"m in NYC and real estate is super competitive. I see ppl bought in the 90s and made 7 x times and collecting rent along the way. Icing on the cake tax deduction king against your income is FTW.
I’m closing in on my retirement and I’d like to move from Minnesota to a warmer climate, but the prices on homes are stupidly ridiculous and Mortgage prices has been skyrocketing on a roll(currently over 7%) do I just invest my spare cash into stock and wait for a housing crash or should I go ahead to buy a home anyways
I still don’t understand how real estate is a bad investment because when you purchase real estate you’re owning a piece of whatever state you live in. If real Estate so much a lousy investment than how come millionaires and billionaires still invest in rental properties, buying land and build housing on these properties, tearing down buildings and selling the land for new construction of buildings whether commercial or residential. This is how millionaires and billionaires made their money. Warren Buffet isn’t living on the streets, he have an mansion or whatever and he bought it to live in , whether he bought the land and had build on it he invested in that piece of real estate, people are searching for homes to rent or buy everyday but, he want us to believe that real estate is a bad investment 🤔
The honesty of these two will stand the test of time. Berkshire Hathaway runs a real estate agency. Thank God.
He's a crank. By all means stay out of real estate. More opportunities for the rest of us!
Im the only ir decency so I see it❤❤
Marriage and women are lousy investments also.. They are all institutions tied at the hip.
Asking a real estate agent whether you should buy a home right now is like to asking an alcoholic whether they think you should have a drink lol. Homes in my neighborhood that cost around $450k in sales in 2019 are now going for $800 to $950k. Every seller in my neighborhood is currently making a $350k profit. Simply unreal. In all honesty, deflation is what we require. The only other option is for many people to go bankrupt, which would also be bad for the economy. That is the only way to return to normal.
Back in 2007, during my time working in real estate, I witnessed people purchasing newly built homes from builders with the plan to sell them before the closing of escrow to another buyer for a profit. The crash hit hard and fast, and I vividly recall many of these units ending up foreclosed upon, with the builder's plastic still covering the carpets.