Toll, like many of his peers in various “favored” industries, is not stupid. He is looking to maximize profits any way he can, and investing in markets like New York City that are heavily dependent on government spending as a means of propping up value is just one way he’s tapping into the system.
Bill Gross of Pimco, Jeffrey Immelt of GE (NYSE:GE), Lloyd Blankfein of Goldman Sachs (NYSE:GS)…they’re all doing the same thing. Their actions are little more than gross self-interest offered under the guise of public stewardship. Whether it’s right or wrong, I will leave up to you.
The Best Ways to Invest in Real Estate Now
If you’re tempted to invest in real estate despite what I’ve just shared with you here are a few things to think about:
- If you can’t beat “em, join “em, especially if you can get in at the wholesale level. Whether you agree with Toll or not, the concept of government spending supporting real estate markets is very real, albeit unevenly distributed. Therefore, concentrate on short-term projects that can be flipped quickly before Washington mentions the word “austerity.” My favorites would be mixed usage properties, particularly those related to medical care and insurance because both are being fed with a Federal fire hose at the moment.
- Longer term, consider more stable states like Utah and the Dakotas, where large numbers of private sector employees have created comparatively stable real estate prospects. Stick to housing in unique markets that have either geographical constraints or cater to the demonized uber-wealthy.
- If you can’t tap into either of my first two suggestions, consider something like the Medical Properties Trust (NYSE:MPW) here in the United States or the GT Canada Medical Properties Real Estate Investment Trust (TSX-V:MOB.UN). The former kicks off a healthy 6.9% yield right now while the latter produces an appealing 8.604%. Both pay you handsomely for the risks you’re taking.