Mauricio Umansky on “Rentvesting” a Bullish Real Estate Market and Where to Buy

Market Shifts From Downturn to Recovery due to Buyer Demand and Normalized Interest Rate Expectations

Mauricio Umansky describes the current real estate market as a transitional period following a difficult three and a half year downturn. Transaction volumes have dropped 40%, down to 3.5 million annually, compared to a typical year of approximately 5.6–5.7 million transactions. This reduction is notable, considering even in crises like 2007–2008 transaction numbers were higher. Such a low level of market activity is largely a result of homeowners opting not to sell in the current high interest rate environment—owners with low locked-in rates find no incentive to trade up or down, since either move would result in higher mortgage payments.

Over time, this stagnation begins to cause pressure and, eventually, leads to price declines. While prices dropped rapidly in 2008, taking only a short period to reach a new equilibrium, the recent market required over three years before prices began to fall. These price drops are now encouraging buyers to re-enter the market, signaling a phase of recovery.

Interest rates, though higher than the historic lows seen during the COVID years, are still reasonable when compared to the double-digit mortgage rates of the 1980s. Both Umansky and Nicole Lapin point out that borrowing costs today, while more expensive than recent memory, remain historically inexpensive and are increasingly being accepted as the current baseline for borrowing.

Determining the timing of a purchase depends more on personal circumstances than on broad market definitions like "buyer's" or "seller's" markets. As Lapin notes, the key question buyers should ask is not whether the market is generically favorable, but whether it matches their unique needs and timing.

A Decade-Long Hold Ensures Real Estate Appreciates Beyond Purchase Price, Peak or Trough

Umansky emphatically states that real estate held for at least a decade has never been worth less than its original purchase price, whether bought at a peak or during a trough. Historical data, dating back to the late 1800s, supports this assertion: there is no recorded instance where a property held for ten years declined in value from its original purchase price.

Unlike short-term speculation or house flipping, residential real estate ownership is about stability and building a life. For those buying homes for personal use rather than investments, there is no bad time to enter the market. ...

Rent Vesting: Renting Your Home While Investing Elsewhere Can Be Wise Amid High Costs

Mauricio Umansky notes that, especially in expensive states like California facing high taxes and soaring insurance due to disasters, it is sometimes more advantageous to rent your home than to own it. As a tenant, one can avoid elevated ownership costs while investing in more favorable real estate markets elsewhere. This strategy, called "rent vesting," involves renting a primary residence while owning rental properties in other markets. By collecting rent from tenants in these investments, investors build equity with others' money and gain potential cash flow, all while maintaining flexibility in their own housing situation. Access to favorable financing further magnifies returns, allowing investors to leverage capital and grow wealth more effectively than if they tied up all investment in a costly primary home.

Capital Leverage in Real Estate Boosts Risk-Adjusted Returns Over Stocks

Nicole Lapin and Umansky discuss how, on paper, the S&P 500 may show 8-10% annual returns versus 4-5% for real estate appreciation. However, Umansky argues that real estate’s advantage lies in leverage: a modest property appreciation yields much higher returns on initial capital when 80% of the asset value is financed through borrowing. This cash-on-cash return can outpace unleveraged equity market gains. Both agree that real estate decisions should not be driven primarily by tax deductions, as using write-offs as a rationale turns sound investing upside down; tax treatment should be a secondary concern to underlying deal quality and investment goals.

Anticipated $124 Trillion Wealth Transfer By 2048 Shifts Affluent Families From Single to Multiple Real Estate Holdings Across Geographies and Lifestyles

Nicole Lapin cites a projection of $124 trillion in generational wealth transfer by 2048, noting that real estate will play a large role as boomers pass down homes and holdings to the next generation. Umansky observes that wealthy families increasingly favor multi-generational compounds, with several standalone homes on shared land. Such arrangements allow for family bonds across generations while preserving privacy and independence. These setups also allow families to support elder members and children within the same community, embodying the “sandwich generation” dynamic of caring for both parents and kids.

With remote work, lifestyle preferences increasingly influence property ownership. Affluent buyers now split their time across multiple locations, such as spending winters in Miami, summers in Los Angeles, autumns in Aspen, and springs in the Caribbean. This shift moves capital away from one primary mansion toward multiple strategic holdings, optimizing both work flexibility and lifestyle fulfillment.

Real Estate Investment Opportunities: Geographic, Lifestyle, Financial, and Tax Advantages

Umansky highlights Miami and Texas as top destinations attracting wealth due to favorable tax policies and a surge in capital inflows for real estate investment. Internationally, Mexico City, Madrid, and Lisbon offer compelling value for retirees and relocators, with moderate living costs, vibrant cultures, and high-quality amenities. Lisbon, for instance, is praised ...

Mauricio Umansky and Nicole Lapin highlight the misleading nature of real estate performance metrics, especially as they are presented to the public and amplified by reality TV. They explain why gross transaction volume is widely used but often distorts true financial realities, and why more standardized business measurements would offer clearer insights into actual earnings and performance.

Real Estate Inflates Public Perception By Reporting Gross Transaction Volume Instead of Actual Revenue or Profitability

In real estate, it is common to report transaction volume—the total value of all property sales an agent or agency handles—rather than actual revenue or profitability. Mauricio Umansky points out that when agents or firms say they've done six billion dollars in "sales," this figure refers to the sum of property values transacted, not their personal income or how much money the business actually made.

Umansky gives a typical example: An agent is said to manage $100 million in annual transaction volume, which on the surface appears extraordinary. However, typical commissions are about 2%, resulting in $2 million in gross commissions for that $100 million in sales. Furthermore, the agent rarely receives all of this, as commissions are split with the brokerage and often with other agents, and are then subject to business operating expenses and taxes.

After all splits, taxes, and expenses, Umansky estimates an agent’s annual net income might be between $500,000 to $1,000,000—even at the elite level. He elaborates that after paying taxes (which can be around half, especially in places like California) and covering business expenses (such as marketing, staffing, and office costs), what remains is much less than what the headline sales volume might suggest.

This measurement discrepancy makes it difficult for the public and even for professionals to compare different agents’ success claims. For example, saying an agent handled six billion dollars in sales volume is not remotely the same as earning six billion in revenue. Even within the industry, being number one is often based on sales volume rather than commissions or net profits earned. Umansky relates how he personally handled $640 million in volume in one top-performing year, but emphasizes that these numbers can be misleading when misunderstood as profit or take-home pay.

Real Estate Should Use Standardized Metrics Like Gross Revenue, Not Transaction Volume

Umansky asserts that real estate should follow the standard practices used in other industries and report gross revenue, EBITDA (earnings before interest, taxes, depreciation, and amortization), or at minimum gross commissions instead of transaction volume. He points out that prominent industries and companies such as Walmart or Amazon publish revenue and profit—figures that reflect actual business performance—rather than simply tallying up the gross value of merchandise moved (GMV).

Resisting this change, many agents and agencies cling to transaction volume metrics because higher numbers appear more impressive and can lure clients or bolster reputations. Umansky explains that if two agents compete for a listing, the agent who claims two billion in volume will seem more accomplished than the one who claims $250 million in commissions, even if the latter actually earned more revenue. He argues for shifting to GMV, gross revenue, or EBITDA as measurement standards, since these more accurately reflect performance and allow for apples-to-apples comparisons within the industry and with other sectors.

Without this change, the public continues to be misled on what real estate “success” actually means, and how difficult it is to achieve high earnings after all costs, splits, and taxes are deducted.

Real Estate Reality TV Shows Mislead By Highlighting Flashy Numbers and Omitting True Profitability Factors Like Commission Splits, Expenses, and Taxes

Umansky and Lapin discuss how real estate ...

Short-Term Rental Policies Enable Property Owners to Earn Income and Address Visitor Accommodation Shortages

With the 2028 Olympics approaching, Los Angeles is reconsidering its restrictive short-term rental policy, which currently limits such rentals to primary residences. Nicole Lapin notes a proposal that would allow investment properties to be listed as short-term rentals through 2028, a temporary measure designed to meet the extraordinary demand for accommodations during the Olympics.

Mauricio Umansky supports this change, emphasizing the necessity of expanded hospitality capacity when hosting a global event of this scale. Drawing a comparison to the World Cup, he notes that LA will need far more lodgings since all Olympic events will occur in one city rather than being distributed among many. Allowing investment properties to operate as short-term rentals would help alleviate accommodation shortages, boost tourism revenue, and generate job opportunities without requiring permanent infrastructure investments. Umansky sees this as an overdue opportunity for Los Angeles, providing vital income for property owners and ensuring the city can meet Olympic hospitality demands.

Ai and Tech Innovation Will Reshape Real Estate Transactions but Won't Eliminate Agents, Especially In Luxury Segments Where Relationships and Expertise Are Invaluable

As real estate technology evolves, the prospect of artificial intelligence (AI) automating transactions is increasingly discussed. Nicole Lapin asks if real estate agents might disappear in the next decade due to tech disruption. Umansky responds that, while AI could automate certain planned unit development (PUD) transactions—where buyers simply choose among a few standardized models in a large development—human agents will remain essential. Even in tech-enabled transactions, people are still needed to show homes and personalize the process.

Umansky stresses that AI cannot replace the market knowledge, personal relationships, and negotiation expertise of experienced agents, especially in the luxury segment, where real estate is about connections, discretion, and tailored service. He views the future of real estate as one where technology greatly enhances efficiency but does not remove the need for human agents, particularly in the upper tiers of the market. Umansky himself is actively developing real estate tech startups but maintains that relationships and expertise are irreplaceable in high-value transactions.

Policies Influence Real Estate Investment Patterns

Umansky details how local policy—particularly the Los Angeles "mansion tax" (ULA tax)—is altering real estate investment. The tax charges a hefty percentage on homes sold for more than $5.3 million, applying even to sellers incurring losses and functioning as a transaction tax rather than a capital ga ...

Real Estate Preserves and Grows Wealth Across Generations For Individuals in Technology and Finance

Mauricio Umansky emphasizes that real estate serves as an effective tool for wealth preservation and investment. He notes that even among those who have made fortunes in rapidly-growing sectors like AI and technology, the common practice is to allocate significant capital to real estate once wealth is accumulated. Real estate is valued for its appreciation, tangibility, and leverage, which together make it an ideal vehicle for converting temporary, rapidly earned wealth into enduring, multigenerational assets. Entrepreneurs and wealth creators recognize that investing in real estate not only preserves their capital but also provides long-term appreciation and family security.

Investment Decisions Should Prioritize Personal Happiness Over Financial Returns to Enable a Fulfilling Life

Mauricio Umansky advocates for optimizing happiness in investment decisions. He asserts there is no absolute right or wrong in choosing where to invest, but rather the most important factor is personal fulfillment: "Always optimize for happiness." This philosophy leads many investors to select properties and markets based not only on financial returns but also on lifestyle, climate, cultural resonance, and personal satisfaction.

Umansky describes the enjoyment value he derives from so-called lifestyle plays, buying in locations he loves, such as Aspen, for personal recreation, or in international locations like the Bahamas, Turks and Caicos, Mexico, Spain, Portugal, and Italy. These properties may not always maximize every cent of return, but they deliver significant intangible rewards, such as enjoyment, balance, and cultural or climatic satisfaction. Nicole Lapin refers to such purchases as "play-vestments," echoing the idea that investments can also yield lifestyle and personal value. She notes that features like California’s climate may provide unquantifiable but meaningful returns, embodying the reasons people strive for financial achievement—to enable life’s pleasures and experiences, not simply to maximize bank balances.

Competitive Drive and Strategic Challenge Motivate Wealth Beyond Financial N ...