I can’t really wrap my head around it, you can have a tenant in there that maybe covers the mortgage, but it’s not really a good investment if you’re not getting a return?
Even if you use 500k to buy a property cash, wouldn’t that money be better off in the market?
In: Economics
1. Mortgage is forced savings. Most people do not have the discipline to rent and invest the difference
2. Leverage. You can put $50k down on a $500k house. If you buy stock, you’re not getting 10x leverage. When stock goes up 1% you make 1%. When the house goes up 1% you make 10%. It gets eaten somewhat by interest/taxes/maintenance/etc, but in favorable markets (not now lol) you can come out ahead.
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