Historically Real Estate Investments have made more money for investors than any other vehicle including the stock market. That ought to create a flurry of unsubscribes from our stock broker friends. Many times stock brokers will compare various different statistics and show that if you invested a certain amount of money at a certain date invested in a certain stock or group of stocks the return over a specific period of time would have been higher than if you invested in Real Estate. There are lots of examples of that in history. However, there is always one factor that they tend to leave out. What if you could buy a stock and someone would loan you 80% of the money to buy it so you could buy many more shares but then someone else would pay back the loan for you. That's the difference between the stock market and the Real Estate market. A stock cannot have a tenant. In my opinion the decision to buy a Real Estate investment based solely on the idea that the market value of that investment is going to increase is an incredibly risky investment, unless of course it's your principle residence. Cash flow is king in Real Estate investing. If you invest $40,000 on a $200,000 townhouse and the rent covers all expenses including the financing and shows a return on your $40,000 over the expenses; that's a good investment. You then have 3 ways to make money. 1. Possible increase in market value over time. 2. The tenant is paying down your debt thus increasing your equity. 3. A return on your cash investment over and above your expenses. Written by Bill Hubbard with Crentury 21 Excecutives Realty Ltd.