I’ve found that a lot of people can’t quite figure out the math. It started when I saw someone say, “In the rent-to-sale ratio, the ‘sale’ side should be calculated based on the purchase price. Zhang San and Li Si bought the same apartment for different prices, so their rent-to-sale ratios are different because their returns are different,” and there were a whole bunch of people agreeing underneath.

I’ve also seen this kind of argument online many times, and it’s pretty funny. A house bought for 1 million that can rent for 30k a year is normal, but if the house price rises to 10 million and it still can only rent for 30k a year, then that’s not normal—you’d need to be able to rent for 250k, or at least 200k a year, for it to be normal. But if you calculate the rent-to-sale ratio using the purchase price, then continuing to rent for 30k a year is “normal”—because if a 10 million house can only rent for 30k a year, then that house absolutely can’t sell for 10 million. Why would anyone be foolish enough to buy it instead of renting?

Someone says, “I only account for myself. For me, each year this house produces an asset return that’s based on the cost I paid to buy it, and that ‘return’ is one I can accept—so I’m willing to keep it.” Stop right there. No matter what price you paid, when you sell it now, it’s genuinely 10 million—not 1 million. That can’t be ignored.

Returns are always based on the current market value of the asset and the cash flow it can generate, because it’s supposed to be compared with what you could get after selling it and putting the money somewhere else. For example, if a house worth 10 million can only generate 30k in cash flow per year, then why not sell it and put the money in the bank to get 200k or 300k in cash flow instead? Only a fool would keep using the rental approach to “accumulate” a cash flow that’s nearly nonexistent for the asset’s current value—because it can’t make up for the discount created by tenants damaging the place, the wear and tear, and the gradual aging of the property.

People often say, “A drop in house prices has nothing to do with me. I bought it 15 years ago—why should I panic?” So what? If the house you bought for 1 million is now worth 4 million instead of 10 million, didn’t your money drop? You say, “I’m still up four times.” That’s self-deception. Your class/status rose at first, but now you’re being dragged down—where are you going to earn that extra 6 million from?

No matter what price you bought it at, once you sell this asset right now, the amount you can get is exactly the amount you have. You always have two choices: sell, or keep holding. The effect of continuing to hold is the same as selling and then buying back—so holding and “being willing to buy” have the same effect. So if the price has fallen by more than half, can you really say you’re not trapped? At some point in some year, on some month and day, you truly “owned” 10 million.

When housing prices fall, rents must fall; when housing prices rise, rents must rise as well—only with a time lag. The reverse is also true: if rents surge, housing prices will inevitably rise too. This linkage only moves up and down within a certain range—for instance, between 1.5% and 4%—rising and falling with market conditions in real estate, the city-level situation, and fluctuations in the risk-free interest rate, but it basically won’t drop outside that range. Why? Because when people want to live in a house, there are always two choices: buying or renting. People always weigh whether it’s more cost-effective to live there “now” by buying or by renting.

That’s the reason the rent-to-sale ratio exists. #美国寻求战略比特币储备