<prompt> Human: I was having a conversation with a friend whos a real estate agent talking about housing market and renting vs buying etc and she pointed out that houses go up in value and how a house that sold for 300k couple years ago is now selling for 350k etc. Ive also looked online and noticed too that a lot of homes for sale had been recently sold for significantly less than current asking price.My question is: why arent more peopleinvestors buying homes, renting them for 2-3 years then selling them for 40-50k more i assume that number based on examples Ive seen, then pay off the loan using the 40-50k and putting it down for another house. Now their loan will be for 250k so at the end of the 3 years they ll be up 100k plus the money from rents? Are people already doing this? Im not talking about fixer uppers and flipping houses as this requires more knowledge, Im talking about normal turn key homes  <response>: Fees. Home sales are some of the most ludicrously high cost transactions. Everyone wants their piece of the pie. So assume a 10 transaction cost per buy-sell cycle.Also, if youre borrowing for leverage, there will also be substantial interest in that 3 years.The process of buying and selling homes, selecting a tenant, performing maintenance, evicting a tenant when you want to sell, etc. is time intensive, or at least not 100 passive.Turn-key homes command a premium.Flipping homes will cause you to frequently realize and pay taxes on your gains.Your investment is not at all diversified.You can invest in every publicly traded stock for a transaction cost of zero. For the past decade, the returns on this market have outperformed real estate.Edit: oh yeah, and there is no guarantee a given property goes up forever. 