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
It’s a good investment for the owner because it’s a bad investment for the tenant who pays the bills while the property appreciates over time. But historically real estate has not done as well as other investments.
Some people prefer investing in tangible assets, but they don’t normally get into real estate by paying cash. I bough a house on the coast, pretty run down but good location. No trouble renting it out and i break even with a little extra set aside for repairs. It’s kind of fun, and I only had to invest $100k. The house is worth about $100k more now after several years, plus the mortgage has been paid down a bit. And each year it cash flows a little bit more due to inflation, while the mortgage is fixed.
In 20 years it will be paid off, and renting at market conditions, and I will have option to sell or keep it as passive income. But there’s still a lot of risk
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