Why Real Estate is the Greatest Investment Let me show you why Real Estate is a Great Investment.
Why is real estate a great investment-Even in a Flat Market with $0 Positive Cash Flow
If you buy an Property with a 20% down-payment,and no positive cash-flow for 10 years, with;
a ) No appreciation- you have DOUBLED your money as the mortgage has been paid down 20% !
b ) 20% price increase (less than 4% annually compounded, below Canada's long term average!!), you would have TRIPLED your money.
c ) 30% price increase (less than 6% annually compounded, about Canada's long term average as house prices in Canada have doubled every 15 years in a normal economy !!) you would have made 250% on your money.
d ) 40% price increase (slightly higher than Canada's long term average as house prices in Canada have doubled every 15 years in anormal economy, you would have made 300% on your money
I do not recomend purchasing an investment property with Zero Cashflow, this article is to demonstrate how affective Real Estate is as an Investment vehicle. These are conservative numbers and Real Estate still proves to outperform stocks or other investments. Purchasing an income property with with good cash flow and in a good neighbourhood will increase these numbers, improving the investement.