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
The reality is that if commercial property investors bunged their cash into index linked funds and sat on it for a decade or two, their returns would be greater with MUCH less effort than managing real estate assets. Sure the same can be said for resi investments too which are even lower yielding assets.
The top poster mentioned about gearing debt against investments as a core way of maximising returns. The problem currently, globally, is the cost of debt is so high that the rate of return is hugely impacted so for many investors, unless they are cash buyers which in some ways can be an inefficient way of tying up capital it’s very hard to make the numbers stack up.
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