Gold Team Avoids

RESIDENTIAL

GOOD:Residential may look good because gross revenue can be good

BAD:But net revenue is often low because of huge management & maintenance/repair costs.  The difficulty of dealing with all types of people.

And

GOOD: Demand for living space is always high because a place to sleep is a basic need.

BAD: The Laws in the US make it hard to evict bad tenants

The tenants do not respect the property. The constant wear   & tear & abuse degrades the value of the buildings very quickly.

OFFICE BUILDINGS

BAD:      Office buildings are a luxury.  There is always the risk of a company or government agency cutting staff by 10, 20, or 50%  and moving into smaller offices.

During weak economic times this is a real risk.

BAD:      Repossession by banks often give the property owner a 100% loss.

BAD:      In good times over-building  new office space provides tenants an opportunity to move into a newer building leaving the old office building empty.