Buffett- Why Real Estate Is a LOUSY Investment

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)